The Reality of Charitable Giving

“Charitable Giving In The U.S. Reached All-Time High In 2016: $390 Billion,” trumpets the headline in the Chronicle of Philanthropy.  But that just seems bogus.  A more important fact is that charitable giving was at 2.1% of GDP—again.  In fact, that percentage has stayed pretty steady (between 1.8-2.1) for the past 40 plus years.  No matter how Giving USA and the Chronicle try to paint it, the fact is we aren’t growing at all.

The Giving USA report goes on to say that individual giving is up with living individuals up 2.6% from 2015.  That, however, is mirrored by a 10% loss in giving via bequests.

But, what, actually, does that mean?

A few years ago, the same reports were boldly announcing a growth in planned giving as bequests had increased by some phenomenal number.  In one year and all due to a $1 Billion (that is with the B) bequest that—this being true for most planned gifts—will not be repeated and will not be increased.

Lately, I’ve begun to wonder why we even give any credence to these sorts of studies. First off, rather than looking longitudinally, they report year to year and proclaim trends that aren’t trends at all.  More to the point, they lump all nonprofits together—from the all volunteer organization limping along at a $100,000 or less operating budget to the 400 largest organizations.  And I’m sure this is no surprise to you, but all organizations are not created equal.

So we all talk about the charitable giving pie.  The one that shows that living individuals give around 75% of all charitable dollars, and bequests add another 8 or so %.  Corporations give between 3-6% and private foundations around 14%.  But for my clients—those organizations whose operating budgets are under $2M (often way, way under) those percentages are turned around.  For most of my clients—and most of the charities in the US—the bulk of charitable revenue comes from private foundations.

The other important information that is not given, is how the money is gotten.

Most of the revenue from foundations comes from grants that have been given as a result of a proposal and a very competitive process.

For individuals, most of the money is coming from a very small pool of people who are giving 7 and 8 figure gifts to an equally small pool of nonprofits.  The remaining 10-20% of the dollars come about mainly through events, mail appeals, peer to peer fundraising, most of which doesn’t make a fraction of what the famed ice bucket challenge brought in.  And a big chunk of this bottom 20% does come from large gifts ($5,000-$999,999) made by individuals.  And again, most of that goes to the larger nonprofits who have robust development staff.

What this all should mean to smaller nonprofits is that they really need to rethink the way they approach fundraising.  Major gifts cannot remain the property of the big guys.  Smaller nonprofits must focus much of their time building relationships and asking for larger gifts.

Until they do, charitable giving will remain at about 2% of GDP and the charitable pies of smaller nonprofits will continue to be dangerously skewed.

 

Janet Levine works with nonprofits, moving them from mired to inspired with increased fundraising capacity and more engaged boards.  Learn more at www.janetlevineconsulting.com  You can sign up for the monthly newsletter and schedule a free 30-minute consultation.

 

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Don’t Let Technology Be Your Fundraiser

Technology.  I love it.  I hate it.  It’s made keeping in touch so much easier.  It’s made being meaningful about those touches so much more difficult.  That’s a minor problem when you are talking about your personal network.  It’s a major one for most nonprofits.

More and more nonprofits are turning to technology for fundraising.  The good of that is costs are lowered and it is easier to reach out.  The bad is without carefully considering what you hope to accomplish you end up bombarding potential supporters until they check out, opt out, or simply click delete whenever your organization’s name pops up in their inbox or on social media.

The other bad is very bad indeed.  Too many organizations are relying on automatic thank you replies to those who donate online.  That’s not the bad.  The bad is two-fold:

1.  When that automatic thank you becomes the only correspondence between the organization and the donor

2.  When in that correspondence, the message is “thank you for your gift. Donate now.”

Maybe many of the organizations I donate to are particularly tone-deaf and don’t get that creating a relationship takes more than an automatic email and that a follow-on gift shouldn’t be asked for before you show the donor how his or her gift made an impact.  However, I do know that I am not alone in bemoaning these truly awful behaviors.

The other problem with technology as your fund development staff is that it means that all your fundraising is transactional.  Writing “Dear [insert a name]” does not make a letter or an email personal.  Relational fundraising comes from conversations in real time where you can keep asking the other person to “tell me more.”

Drilling down (in a nice way) is the only way to learn about a donor’s hopes and dreams, to understand values.  And only when you do understand these can you begin the conversation about a really large gift.

Really large gifts are important for a lot of reasons.  Not the least of which is that fundraising is no different from any other endeavor.  That means that 80% of what you get comes from 20% of the givers.  So even if your largest ever gift is $500, do the math and you will most likely find that 80% of the gifts you receive come from 20% of your donors.  Go out and cultivate, then solicit donors who can give larger gifts.  The amount you raise will increase—and you will still find that 80% of what you get comes from 20% of the givers.  In most cases.

Technology can be a boon to small development offices, making transactional fundraising easier.  But to make fundraising better, these small offices must carve out time to reach out more personally to at least your likely larger donors (those who have been loyal; those two may have once given a larger gift; those whose wealth indicators are high) and move them from transactional to truly being invested in your organization.  Once they are, their investment in you will increase.

 

Janet Levine works with nonprofits, helping to increase their fundraising capacity and build stronger, more fundraising savvy boards.  Learn more at www.janetlevineconsulting.com.  While there, sign up for the newsletter, check out our new one-hour board trainings, and do schedule your free 30-minute consultation. 

 

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Getting Ready to Plan–Planning to Fundraise

I’m getting ready to leave for 2 weeks in Rome.  I know, it really is a tough life.  But I hate

Piazza Navona – Rome

to travel.  Not going to new places. That I rather enjoy.  Not seeing new things.  That is exhilarating and yes, fun.  But the planning, packing, getting there (and then doing it all in reverse) almost defeats me.   The getting ready sometimes is so daunting we never actually get off the dime.

For some, it’s never getting past the planning to plan whatever it is they need or want to do.  For others it’s just avoiding any planning at all.  And for some, it’s constantly getting sidetracked by all that could be done, perhaps should be done, might be done that they never focus enough to get any part of it done.

Does any of this sound like you or your organization?

If so, here’s what you are going to do:

  • Pick a destination.  Any destination.  This year we will improve our donor retention by 15%. That’s a pretty good destination.  Or We will build our donor pool by 100 more prospects. Yours might be broader, a bigger stretch, or just the opposite—smaller, closer to get to.  It doesn’t matter.  Just decide where you are going to go.
  • Consider your resources and decide how you are going to do that.  Each week, our Board members will write personal thank you notes to every single donor for every single gift, and in that note, we will tell the donor why his or her gift matters so very much. That’s doable. Every month we will add 10 new names to our pool. These will be new people we meet (and yes, “we” includes but is not exclusive to the board), have read about, used to have as a donor.  All that is pretty doable, also.   The next step is harder–ensuring it gets done.
  • Establish a way to measure your accomplishments.  We’ll address the envelopes, and ask the Board members to drop off the notes for us to mail. A little clunky, but hey…whatever will work.
  • Celebrate each success, no matter how small.  At each Board meeting, we will make a big deal out of every follow-on gift we get and every new name we add. That would serve two purposes—you’d be celebrating success and making Board members feel that their work had value (which, by the way, it does).

Once you get this under your belt, try a little side trip or another destination.  Pretty soon, you’ll have a plan.  And while it may not be Rome, it will be a very bene thing to do.

Janet Levine works with nonprofits, helping them go from mired to inspired.  Learn how Janet can help you increase your fundraising capacity and ignite your board at www.janetlevineconsulting.com. While there, sign up for the newsletter and contact Janet to schedule your free, 30 minute consultation

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Follow Through Counts

We had planned a car trip before we found out that my husband would be working inRome for 2 weeks at the end of June.  But it’s been so long since we’ve had a vacation that was not tethered by family or work, we decided to take the week we planned.  We PLANNED to drive up the coast, but rock and mudslides put paid to that idea.  So we drove up in the middle, fighting heat and boredom, until we headed west to the ocean.  Where it was still hot.  And in a moment of let’s do something different, we headed up to Lake Tahoe.

Thanks to Hotel Tonight, we were able to get a room in a very upscale hotel at a price that made us sure the website was just hype.  It wasn’t—and we spent 3 glorious nights pretending we were richer than we are.

Seriously, the place was luxe.  We had a view of the lake from our terrace; the room was large and the bed really comfortable.  The staff was friendly and thoughtful.  All in all, I might have given it a 5 out of 5.  Except—follow through on things was less than stellar.

For example, the person who brought us up to our room noted there was only one bathrobe in the bathroom.  “I’ll get another sent up pronto,” he said.  Three days later, there was still one robe.

Then my husband really wanted to be able to make tea in the room.  Three staff members said, absolutely—coming right up.  We finally found an unattended housekeeping cart that had the tea pods, and so we swiped a few.

And then, when we got home, we noticed that there was a breakfast charge on the bill that wasn’t ours.  I called—and the nice young woman at the desk said, “Let me check with my boss.  I’m sure I can just delete that, but I’ll get right back to you.”
That was 4 days ago.  I’ve called and emailed, but no one seems to have an answer.  And now I’m thinking 3, or maybe even 2.5 out of 5.

Follow through, doing what you say you are going to do, keeping your customers (and don’t think that donors aren’t customers) feeling that they matter and you care, is critical.  No matter how well you do everything else, dropping the ball when you say you will do something will sour everything.

We didn’t need the second bathrobe.  Heck, we didn’t even use the first.  But the fact that we were told it would be taken care of left us feeling as if we didn’t matter very much, or the staff member just didn’t care.  And if he doesn’t care, should we?
This is really important for nonprofits.  Fundraising suffers big time when balls are dropped.  Funders, especially, can get understandably testy if you don’t submit that report they requested (or the one YOU suggested!), and prospects will decide to give their money elsewhere if they are not well taken care of.

Taking pride in following through, Janet Levine works with nonprofits to move them from mired to inspired–raising more money and having more committed staff and boards.  Follow through by contacting Janet and arranging for your free, 30-minute consultation.  

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Stop Being a Sick Nonprofit

For the past several days, I’ve been sick with either a cold or allergies.  In any case, I

This has not been a good week. Coughing and sniffling and sneezing!

can do what I need to do, but doing new things defeats me.  And moving to a new spot?  That causes coughing which, after a few minutes, exhausts me.  It struck me last night, after I coughed for what felt like days and only wanted to curl into myself, that many nonprofits are exactly like sick people.

Like a lot of people when they are sick, they do what they need to do—and often they do that quite well.  I am often surprised at how amazing the programs of very small nonprofits are, or how robust, when the entire organization is hanging by a string.

But the other work—the work of fundraising and board management, is a little beyond their strength.  And so they do the minimum or less, keeping them weak and sick,

If articulating the problem brings you halfway to solving it, the road to health should be obvious.  But knowing that I need to stop coughing is no more helpful than telling a nonprofit it needs to fundraise and be more mindful about who gets on their board and how the members need to act.  Both are true, of course, but we must get beyond the what to the how.

The how is less easy to define.  It is different for most nonprofits.  I can say with absolute assurance, for example, that fundraising is about building relationships with individuals who care about your cause, have the ability to support you and are people who will respond to your initial approach, but an organization without a database and no fundraising staff, will find it difficult if not impossible to discover who those people might be.  Unless, of course, the board is willing to do its job—and alas, most boards are not.

This does not, however, mean you cannot build a comprehensive and robust fundraising program.  It does mean that you will not be able to go from zero to 60 in seconds.  This is a multi-year process.  But if you don’t start now, getting there will be that much further away.

Start small.  Pick one thing and do it.

But be wise about that one thing.  Big events cost time and money.  The return on investment is small.

Remembering that fundraising is about building relationships, consider how you can do that in a sensible way.  Personal outreach (letters, phone calls, an invitation to a small group gathering) to the ten people you know can bring in 8 gifts.  Size at this point doesn’t matter.  Anything is more than you have now, and you never know what lurks behind a small first gift.

Keep in touch with those you’ve asked—showing gratitude to those who gave and impact to all.  “Because of you…” and “Because of the support we’ve received” are two sides of the same coin and can sometimes turn nongivers into supporters.

Keep building on what you are doing and know that sometimes it will feel like a slog.  But add just a few names each month and pretty soon you’ve got hundreds, and hundreds will turn into thousands, and your fundraising program will be helping your organization to flourish and grow.

 

Janet Levine works with nonprofits, helping them to go from mired to inspired. She helps her clients create fundraising plans that fit their needs and resources and help them to grow.  Learn more at www.janetlevineconsulting.com.

 

 

 

 

 

 

 

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