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July 03, 2008
Is the Economy Affecting the Job Market for Fund Raisers?
Fund raising in a profession that is unusually resilient — even in a poor economy.
Some organizations step up hiring fund raisers in tough times to help keep contributions from falling. But some fund raisers say they are hearing about planned cutbacks, such as one caller who recently told us about a hospital that has suspended its plans to expand the fund-raising staff because of the economy.
What’s happening with the fund-raising job market in your part of the country? Do you see any evidence that nonprofit groups are shelving plans to expand the number of fund raisers they hire, or not filling jobs when fund raisers leave?
Tell us what your organization is doing — and what you think makes sense in this turbulent economy.
July 02, 2008
New York Imposes New Requirements on Gift Annuities
As the economy worsens, donors are increasingly interested in making their gifts through annuities, an approach that allows people to donate money or other assets to their favorite causes in exchange for a secure income stream. Now charities that offer gift annuities In New York face new requirements, under recently revised state law.
In essence, the new law requires charities to increase the amount of surplus funds they hold in reserve accounts linked to the annuities. The reserve funds ensure that charities are able to meet their financial obligations to donors.
Currently in New York, the minimum gift-annuity reserve fund is set at 110 percent of the actuarially determined reserves; those are based on the amount of the annuity, interest rates, mortality rates, and other factors. That percentage will now increase to 115 percent over three years, rising by 5 percent annually, beginning this year.
Charities will be affected by the New York law in varying ways, depending on how they currently handle gift annuities. Some will be unaffected, while others will have to make substantial changes. More information and details are available on the American Council of Gift Annuities’ Web site.
— Holly Hall
How to Plan a Green Fund-Raising Event
Charities are increasingly taking steps to make their operations more environmentally friendly.
And, increasingly, donors want to know that the charities they support are doing their part to protect the environment.
With that in mind, fund raisers should be thinking green when they plan events for donors, says Sarah S. Brophy, a consultant who helps promote environmentally friendly practices for cultural groups.
To do that, Ms. Brophy encourages groups that host fund-raising events to hire businesses that rely on reusable dinnerware, washable linens, and locally grown food and flowers. She also says groups should be deliberate in explaining their green efforts at their events (on high-content recycled paper, of course).
For more tips from Ms. Brophy and other experts on green philanthropy, check see the transcript of The Chronicle’s recent live discussion on the topic.
And if you’ve planned a green event for your donors, we’d love to hear your stories about how you did it. Please feel free to post a comment to share your experience.
July 01, 2008
Direct-Mail Returns Continue to Slide
Donations made in response to direct-mail appeals declined in the first three months of this year, continuing a downward trend that began in 2006 and has accelerated since then, according to an analysis released today.
The quarterly analysis, conducted by Target Analytics, a Boston research company, looked at gifts to 72 large charities, mostly made through direct mail. Those charities reported gifts exceeding $1.8-billion from more than 36 million donors over the preceding 12 months.
From January to March, the total number of donors fell by 4 percent, compared with the first quarter of last year, and the overall amount raised declined by 1.8 percent.
The decline in total contributions was even more evident when the analysts examined donations for the year-long period ending in March of this year, compared with the same period in 2006. “When adjusted for inflation, revenue has actually declined 3.6 per cent in real dollars,” they write.
For most organizations, the dwindling number of donors demonstrates the trouble charities have in attracting new contributors, although some organizations are also failing to attract money from people who gave in the past, the an The worsening economy is also partly to blame.
A full summary of the Index of National Fundraising Performance: 2008 First Calendar Quarter Results is available on Target’s Web site.
June 30, 2008
The Wrong Way to Find New Donors
To find new donors, many charities periodically ask board members to share their personal mailing lists or professional contacts. The organization then creates a solicitation letter, and each board member signs all copies sent to his or her contacts.
That’s a big mistake, says Simone Joyaux, a fund-raising consultant and a co-author of Keep Your Donors: The Guide to Better Communications and Stronger Relationships (John Wiley & Sons).
In fact, rounding up board members’ contacts for a mass solicitation amounts to “trespassing on personal and professional relationships” of those trustees, she writes in the book. “Promise that you won’t!”
“Have you ever asked your board members how they feel about asking their friends and colleagues to give money simply because they are friends and colleagues?” Ms. Joyaux continues. “I’ve asked thousands of board members: Mostly they feel uncomfortable.”
What’s more, Ms. Joyaux writes, such appeals generally bring in only a few token gifts that are not motivated by any real interest in the charity’s mission; instead, they are spurred by a desire to do a favor for a friend or colleague and are usually not repeated.
Far better, Ms. Joyaux argues, is asking board members to refer only those people who might have a genuine interest in the charity’s work. The organization, she writes, should then make an effort to learn more about those individuals’ interests and inform them about its work—all of which should be done before any solicitation is made.
June 27, 2008
Baby Boomers Blamed for Fund-Raising Drops
Why are many nonprofit organizations coping with a drop in the number of people who make gifts in response to direct mail and other appeals to recruit new donors?
Writing today in the The Agitator, the direct-marketing experts Roger Craver and Tom Belford say they have the answer: gloom and pessimism among baby boomers about their financial outlook.
At first, Mr. Craver and Mr. Belford were mystified when they learned in a forthcoming survey that boomers, aged 44 to 62, gave less ($1,081) in the past 12 months than both younger people ($1,205) and older donors ($1,542). The same survey three years ago found that boomers gave the most, leading the two men to conclude that baby boomers had finally replaced their parents’ generation and “climbed to the top of the donor heap.”
But then Mr. Craver and Mr. Belford got hold of a new study released this week by the Pew Research Center.
Among more than 2,400 adults surveyed early this year as the economy began to sour, the Pew study found that boomers have the least optimistic outlook of any generation about their current and future financial prospects, and they are the most worried that they will have to cut household spending in coming months because money is tight.
“That adds up to a pretty gloomy head trip!” Mr. Craver and Mr. Belford write. “Might it cause a more conservative approach to donating—even a retrenchment? In our opinion…absolutely.”
—Holly Hall
June 26, 2008
Too Many Fund Raisers Rush Big Gifts
Many nonprofit leaders rush to obtain big gifts too quickly, says one veteran fund raiser.
That is because they are concentrating on the institution’s needs rather than individual donors’ comfort level in making larger gifts than they ever have before, says Kent E. Dove, senior vice president of Indiana University, in Bloomington.
For example, Mr. Dove says, university fund raisers in an ambitious capital campaign might learn through meticulous research that a donor whose largest previous gift was $25,000 is capable of giving $5-million or more.
But unless the donors shows he or she is interested in giving that kind of sum, Mr. Dove says that he has learned from decades of experience never to ask a $25,000 donor for a contribution that large. At least not initially.
Instead, with the $25,000 donor, he says that he would plan a solicitation to ask for a campaign contribution that’s four to seven times larger than that person’s previous largest contribution. “
A lot of nonprofits make the mistake of asking that donor for $1-million when they should be thinking of a $100,000 gift,” he says.
Mr. Dove says the most generous donors, even if they are extremely wealthy, often worry about their assets lasting and need to prove to themselves they can afford to make very large gifts. When the $25,000 donor sees that giving $100,000 doesn’t have an adverse effect, he or she might make a bigger gift, he says.
“When we go back and review 20- to 30-year giving histories,” he says, “this is the type of growth pattern we see with our most generous donors who up their giving one step at a time.”
June 25, 2008
Donations of Stock and Other Non-Cash Gifts Rise Are Rising Fast
Americans are giving away tens of billions of dollars worth of stock, art, real-estate, and other noncash gifts every year, according to the IRS.
In a new report—the second of its kind—the IRS found that taxpayers reported at least $41.1-billion worth of non-cash gifts in 2005, the latest year for which data is available. The number of Americans who wrote off such gifts was about the same as in 2004, but the amount of those contributions increased by 10 per cent.
Contributions included stocks and other investments, real estate, art and collectibles, food, clothing, electronics, household items, cars and other vehicles, and other items such as airline tickets. Stock gifts accounted for the largest share of non-cash contributions, totaling $19.8-billion at their fair market value. Real-estate gifts, valued at $12.7-billion, made up the next largest share.
Some types of charities are getting more valuable non-cash gifts than others. For example, the IRS found that environmental and animal-welfare groups received an 89-percent increase in non-cash gifts in 2005, to $3.3-billion even though the number of people who reported giving to those organizations declined by 10 percent.
June 24, 2008
How to Win Money from Older Americans: Ask for Stock Gifts
Donors age 65 and older are making far more outright gifts of appreciated stock, mutual funds, and other investments than previously thought, according to an analysis of IRS data released last month by the Sharpe Group, a Memphis planned-giving consulting firm.
Such donors gave $10.1-billion in stocks and other related gifts in 2005, the most recent year for which data are available from the IRS. That’s 51 percent of the total, a larger share than for any other age group. It is more than double the next largest share, 21 percent given by donors aged 55 to 64, the analysis found.
“If you had asked me to guess where most of these gifts were coming from, I would have said the 45- to 65-year old corporate executives and others with large investment holdings,” says Robert F. Sharpe, the consulting firm’s president. “I was wrong.”
Most charities haven’t concentrated on seeking big gifts of stock and other investments from donors older than 65; instead, they ask for bequests and other planned gifts like gift annuities that provide donors with regular payments, Mr. Sharpe notes. But the data prove that many donors can afford to make big outright gifts with investments past the age of 65.
What’s more, those donors have been in the market long enough to have realized returns that far exceed the recent downturn in the economy, Mr. Sharpe says.
“Planned-giving people are having tea and cookies with Grandma in hopes of getting into the will,” he says. “They might want to ask if she has any stock.”
—Holly Hall
Should You Scrap Your Fund-Raising Event?
Some charities have taken the extreme step of canceling their annual fund-raising galas in light of the economic downturn.
But Robert Evans, a fund-raising expert, advises against making a last-minute decision to cancel a special event.
“I have indeed heard that some agencies are becoming ‘chicken’ and are not continuing a tradition of special events that has been ongoing,” Mr. Evans said in a live discussion today with Chronicle readers. “Our advice: Do not cancel events but rather consider ways to make the event(s) more appealing for attendees.”
Mr. Evans, managing director of the EHL Consulting Group, a fund-raising consulting firm in Willow Grove, Pa., said one charity his company advises recently had a record-setting annual dinner by landing a matching grant from a major donor before the event.
For more on how to raise money during the difficult economy, read the full transcript of today’s live discussion.
Tell us how you are handling special events — and whether they are producing the returns they did in the past.
Copyright © 2008 The Chronicle of Philanthropy