Giving to the nation’s biggest and most-popular charities grew by more than 10 percent last year, fueled largely by affluent donors who are reordering the top ranks of America’s nonprofits.
Four of the 10 charities that appear at the top of The Chronicle’s Philanthropy 400 are organizations that raise money mostly from the wealthy by offering donor-advised funds, including Fidelity Charitable (No. 2), which is less than $200-million shy of ousting United Way Worldwide from the top of the list. That’s an unusual accomplishment for a nonprofit only 23 years old.
At No. 8 is the Silicon Valley Community Foundation, which has raised $1.5-billion from Mark Zuckerberg and his wife, Priscilla Chan, in the past two years.
Those groups are displacing nonprofits that were once mainstays at the top of the list, like the American Cancer Society, which was No. 7 in 2010 and is now No. 16. Also losing ground are organizations that focus primarily on serving the needy abroad, like the AmeriCares Foundation, which was No. 3 in 2010 and now is No. 25, and World Vision, which was No. 8 five years ago and is now No. 26.
Stock-Market Influence
The 30-percent gain in the stock market was a key reason donors gave so generously last year, and came on top of a 4-percent increase in giving in 2012.
The increase in giving among the more than 330 charities that reported contributions in both 2012 and 2013 was 9.3 percent when adjusted for inflation.
The results were far stronger than those of smaller groups. The total gain in giving to all causes last year was 3 percent, according to “Giving USA.”
And looking ahead to the crucial year-end giving season, confidence in the fundraising climate appears to be rising: Thirty-five organizations in the survey that provided or estimated fundraising returns through the end of 2014 expect giving to rise 6.9 percent.
An unusual circumstance catapulted one group that is not normally in the top fundraising ranks high on the 400.
The National Academy of Sciences received $500-million as part of a settlement over the BP oil spill and placed No. 27, with a nearly 1,000-percent increase in gifts.
The National Fish and Wildlife Foundation, which is getting $2.5-billion over five years, is likely to make similar leap in coming years. It now ranks No. 248.
But the most stunning changes were those achieved by the groups that offer donor-advised funds, which outstripped the percentage gains of nonprofits like United Way and the Salvation Army that depend largely on middle-class donors.
Schwab Charitable Fund (No. 4) increased donations by 165 percent, to nearly $1.9-billion. It, too, is a new organization, created in 1999. And Vanguard Charitable Endowment Program (No. 10) grew by nearly 19 percent. It was founded in 1997.
More Competition
It’s not just the donor-advised funds that are going after the wealthy with new vigor: Colleges, hospitals, environmental groups, and others are all spending more time and money to court affluent donors.
Many charities are adding staff members and pouring other resources into maintaining relationships with supporters, who are making tougher demands in exchange for big contributions.
Not only do donors expect to be regularly informed; more and more of them also want a say in the organization’s work, sometimes as a board member or in another decision-making role.
With rich donors driving philanthropy, “more resources are needed for donor cultivation and stewardship, since there is so much more competition for the charitable dollar,” says Sue Paresky, senior vice president at the Dana-Farber Cancer Institute (No. 78).
From 2009 to 2013, Ms. Paresky says, Dana-Farber hired 37 new staff members, increasing its development staff by more than 20 percent, including people who plan events for donors, write reports, and carry out other duties to keep supporters informed and involved.
The money spent on staff members has paid off: Donations grew in those five years to $260.5-million in 2013, a 30-percent increase.
Fundraising “has totally changed since the recession.” Ms. Paresky says. “It’s harder to raise money, and you need more touch points to make a gift happen. Donors want to give to organizations that do the best work and pay attention to them.”
At the same time, she adds, “there’s much more at stake. There’s much more reliance on fundraising dollars than ever before.”
Going After the Rich
Even social-service charities that have traditionally relied on mass solicitations and modest contributions are trying to recruit wealthier supporters.
Last year, Easter Seals (No. 107) increased donations nearly 7 percent, largely by working to develop ties to companies and to individuals who can give $50,000 or more.
Donors have responded generously to new projects Easter Seals has started, including a program that helps families screen children for developmental delays and its new Easter Seals Dixon Center, where the charity helps veterans returning from overseas deployments get health care and other services.
Maureen Haller, Easter Seals’ vice president for development, says donors are especially eager to make repeat gifts when they find out their donations inspired other people or organizations to give.
She invited a potential donor to have lunch with a supporter who had made substantial donations and won a new big gift to support the group’s work with veterans.
“A powerful thing for donors is showing how we have leveraged their gift to get support from others,” Ms. Haller says. “They like that.”
Christian Appalachian Project (No. 204), which lost many donors who gave in response to direct mail or email during the recession, has been trying to replace the modest donations with support from donors who give $5,000 or more.
Last year the charity, which provides home repairs, food, and other services to the poor, made 500 visits to donors and potential supporters who could give that much, up from 150 five years ago. A few years ago, officials mined donor records, and after noticing that more than 11,000 donors lived in Los Angeles County, fundraisers started to travel to Southern California three times a year rather than just once.
Those kinds of efforts are helping make up for the $1-million lost each year from mass appeals ever since the recession began. For the fiscal year that ended in August, income from donations of $5,000 or more grew by about 20 percent, which, coupled with the increase in bequests, boosted the sum raised from big gifts by $1.5-million over 2013.
Simple Language
The Nature Conservancy (No. 33) has also redoubled efforts to secure donations of $5-million or more from individuals and families.
Despite a decline in contributions of nearly 7 percent last year, the organization went on to raise a record $552-million, an increase of more than 10 percent, in its 2014 fiscal year, which ended in June. That year, the total raised from gifts of at least $5-million nearly doubled, says Tom Neises, chief development officer. “We are seeing real sustained growth in this area,” Mr. Neises says. “It is not just a one-year blip.”
To make its work more clear and attractive to wealthy donors, the Nature Conservancy has spent the better part of three years constructing new approaches to simplify the message on why its work matters, so donors can more easily see how each of the charity’s programs contributes to a grand conservation plan.
“We have worked hard to make it clearer to donors what we are trying to accomplish to achieve our conservation goals,” Mr. Neises says. “We are a big, complicated organization, so being able to articulate clearly what we do is powerful.”
Growing Confidence
Affluent donors at Georgetown University (No. 167), which last year reached the $1-billion mark in a $1.5-billion campaign, are helping the institution smash previous records. The 1,000 largest gifts in the campaign were worth a total of $880-million.
Among those donations: $100-million from Frank McCourt, a 1975 alumnus, real-estate investor, and former owner of the Los Angeles Dodgers. His gift will push Georgetown’s fundraising returns to more than $200-million this year, says Bartley Moore, Georgetown’s vice president for advancement.
Donors like Mr. McCourt “are increasingly confident that the turmoil of the recession has ended,” he says. “The future will be influenced by the fact that there is extraordinary wealth in the hands of a small percentage of the super affluent. It is not about increasing the number of donors anymore, it is about raising principal gifts of $10-million.”
Indiana University at Bloomington, part of the Indiana University system (No. 62), saw contributions grow by $4.6-million, to more than $158-million in its 2014 fiscal year, which ended June 30.
As its gets ready to take advantage of the improved economy and start a capital campaign, the university has hired 10 new regional fundraisers who are now meeting with alumni and others nationwide whom the university has not sought out before.
“We continue to emphasize the fundamentals of building solid relationships,” says Jeff Lindauer, vice president for advancement services.
“That may not sound as exciting as a new viral social-media campaign, but we know that the most important conversations are very personalized and take place over the course of years, not days. The gifts that transform our institution come from donors who have maintained significant ties and longstanding relationships with Indiana University.”
Household Names
The Salvation Army (No. 3) achieved increases last year, despite challenges that included a $10-million shortfall for the group’s year-end Red Kettle drive.
“We had five fewer days due to the way the calendar fell,” says Lt. Colonel Ron Busroe, the group’s secretary of development. “The other thing we have looked at is the fact that we are becoming a cashless society, which hurts kettles.”
But online gifts helped the Salvation Army make up for those losses. Such donations grew to $38-million last year, an increase of 24 percent.
However, not every charity is benefiting from an upswing in giving.
Among those struggling is the American Cancer Society (No. 16), which raised $885-million last year, about the same as in 2012.
Contributions to the health organization have dropped steadily since 2008, when it raised more than $1-billion. And the number of people who take part in the organization’s signature event, Relay for Life, is down, along with donations to its direct-mail fundraising appeals.
Lin MacMaster, the society’s chief revenue and marketing officer, abruptly left in August after 13 months on the job, which some observers speculated was the result of a projected $40-million drop in proceeds from Relay for Life. According to the charity’s website, the event, which is held in 20 countries, annually raises more than $400-million.
To improve contributions, the group said in a written statement, it has spent the past two years reorganizing from 12 regional divisions to one central organization.
“In the past year,” the statement said, “we have spent time rolling out new positions across the structure, creating streamlined and standardized processes and developing a strong foundation for growing revenue in the future.”
Other organizations with household names are also battling hard to avoid losing ground to competitors.
Among them is United Way Worldwide. Its contributions last year fell by 1.4 percent, to $3.87-billion, down from $3.92-billion in 2012.
Despite years of working to increase gifts of $10,000 or more, United Ways still rely heavily on appeals at companies and other workplaces, where employees typically contribute an average of $300 annually. Those gifts make up three-quarters of all donations to the charity.
“We are a reflection of middle-income giving,” says Brian Gallagher, president of United Way Worldwide. “And middle-income America is still struggling past the recession.”
Debra E. Blum and Lance Lambert contributed to this article.
