FEEDING AMERICA, NO. 3: A Feeding America mobile pantry makes one of its twice-monthly deliveries to needy residents in Jacamba Hot Springs, California, on the U.S.-Mexico border. The hunger-relief charity raised more than $2.1 billion from private sources last year.
American philanthropy has a new, rather unusual king of the hill: a nonprofit spun off from a privately held, multinational financial-services company.
In a sign of a fast-developing and controversial shift in charitable giving, Fidelity Charitable Gift Fund, an arm of asset-management giant Fidelity Investments, claims the No. 1 position in this year’s Philanthropy 400, The Chronicle’s annual ranking of nonprofits that raise the most from individuals, foundations, and corporations. United Way was pushed from the top rung for only the second time since the list’s 1991 debut.
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FEEDING AMERICA, NO. 3: A Feeding America mobile pantry makes one of its twice-monthly deliveries to needy residents in Jacamba Hot Springs, California, on the U.S.-Mexico border. The hunger-relief charity raised more than $2.1 billion from private sources last year.
American philanthropy has a new, rather unusual king of the hill: a nonprofit spun off from a privately held, multinational financial-services company.
In a sign of a fast-developing and controversial shift in charitable giving, Fidelity Charitable Gift Fund, an arm of asset-management giant Fidelity Investments, claims the No. 1 position in this year’s Philanthropy 400, The Chronicle’s annual ranking of nonprofits that raise the most from individuals, foundations, and corporations. United Way was pushed from the top rung for only the second time since the list’s 1991 debut.
The two organizations were nip and tuck in the rankings for years until Fidelity bolted far out front in 2015, collecting $4.6 billion, a 20 percent increase from 2014. United Way Worldwide, which saw a 4 percent drop, raised $3.7 billion, almost a billion dollars less than Fidelity.
Fidelity’s rapid ascension is remarkable. In the 25 years since its launch, it has nimbly vaulted over venerable fundraising giants like the Salvation Army (No. 6 on the Philanthropy 400), Harvard University (No. 14), and the American Red Cross (No. 31). United Way itself has been a mainstay of charity since its founding in 1887.
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With $15 billion in assets under management, Fidelity awarded more than $3 billion in grants to nonprofits last year — more than double the total from just four years ago. If this trajectory continues, it could soon eclipse the Gates Foundation as America’s biggest grant maker ($4.2 billion awarded in 2015).
Pamela Norley, president of Fidelity Charitable, says her organization has boomed in large part because its online platform has made charitable giving an easy digital-age transaction. “A lot of what [donor-advised funds] have brought to charities and our donors is really technology. It’s an intermediary between the donor and charity that allows the process of giving to be simpler and more transparent and easier for record-keeping.”
The Philanthropy 400 Top 10
Fidelity Charitable Gift Fund: $4.6 billion (+20%)
The charity champ also ranks second nationally in grant making, trailing only the Gates Foundation.
United Way Worldwide: $3.7 billion (–4%)
Inflation-adjusted contributions are less than two-thirds what they were 25 years ago.
Feeding America: $2.1 billion (+7%)
Donations have nearly doubled since 2011.
Schwab Charitable: $2.1 billion (+16%)
Created in 2003, Schwab is the youngest organization in the top 10.
Catholic Charities USA: $2 billion (–4%)
It has been in the top 10 each of the past seven years.
Salvation Army: $1.9 billion (–10%)
The 2006 Philanthropy 400 champion drops out of the top five for the first time.
Task Force for Global Health: $1.6 billion (–10%)
The bulk of its giving comes in the form of donated medicine.
Stanford University: $1.6 billion (+75%)
It tops higher education for the 10th time in 11 years. Last year it secured four gifts of at least $100 million.
National Christian Foundation: $1.4 billion (+27%)
This fast-growing sponsor of donor-advised funds has more account holders than any peer save Fidelity and Schwab.
Silicon Valley Community Foundation: $1.2 billion (–38%)
Almost all its donations are made through donor- advised funds; stocks account for the bulk of gifts.
United Way’s drop in giving last year is the latest in a string of disappointments. When adjusted for inflation, contributions to the organization are less than two-thirds what they were in 1990.
Brian Gallagher, president of United Way Worldwide, says the decline reflects economic shifts — chiefly corporate consolidation and wage stagnation — that undercut its workplace-giving programs. “We are best described as the average donor’s charity,” Mr. Gallagher says, noting that its average contribution is about $365. “Middle-class Americans haven’t seen an increase in income in over 30 years, and that affects us directly.”
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Giving to Big Groups
As in recent years, giving to Philanthropy 400 organizations continued to outpace giving overall. Donations to the 376 charities for which two-year data was available grew by more than 7 percent from 2014 to 2015. Giving to all charities, meanwhile, was up only 4 percent, according to the most recent “Giving USA” report.
Only 119 groups reported a decline in giving in 2015. Altogether, giving to Philanthropy 400 organizations topped $104 billion, a new high.
This disparity in growth rates is not unexpected, says Una Osili, director of research at Indiana University’s Lilly Family School of Philanthropy, which does the research for “Giving USA.” Large organizations tend to have more capacity and bigger fundraising teams, she says. These groups also account for a lot of the dollars, collecting more than $1 for every $4 raised for charity in America.
Large organizations tend to attract the megagifts, which have been growing in size, Ms. Osili says, citing the recent $500 million pledge from Nike co-founder Phil Knight and his wife, Penny, to the University of Oregon (No. 189). “Those kinds of numbers would definitely lead to more rapid growth with the Philanthropy 400,” she says.
But it is the boom in giving to donor-advised funds like Fidelity that is most striking. These funds operate almost like a charitable savings account; donors get the same tax benefit they would receive with a gift to a food bank or homeless shelter, but the money can be held in the fund indefinitely and invested. Though the charitable organization managing the fund technically controls the money, donors recommend what nonprofits should get gifts and when — and those recommendations are routinely followed.
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A sleepy, seldom-used giving vehicle until Fidelity opened in 1991, the donor-advised fund has entered the 21st century with the potential to become as important to philanthropy as the private foundation.
Already, donor-advised funds account for a large chunk of the growth in total charitable giving. Contributions to funds at the largest sponsors grew 186 percent from 2008 to 2013, a new Chronicle analysis finds. Overall, charitable giving increased only 13 percent during that time, according to “Giving USA.”
Soon donor-advised funds could account for 10 percent of all individual giving, based on figures from “Giving USA” and the National Philanthropic Trust (No. 17).
Critics decry this trend, arguing that dollars in donor-advised funds sit for years, even decades, when they could be put to charitable use immediately. Fidelity’s success has spurred Bank of America, Vanguard, and other commercial entities to create their own charitable affiliates to hold donor-advised funds, raising questions as to whether these charities are simply profit centers. Each has accumulated billions in assets in just a few years, and each typically pays fees to its for-profit parent entity to manage the money.
“They’re not charities; they’re conduit organizations,” says Robert Sharpe, a veteran nonprofit consultant. “It’s money in holding tanks.”
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Yet traditional charities have begun to offer their own donor-advised funds, among them hospitals, universities, Rotary International chapters, small churches, and even United Way affiliates.
“Even though workplace giving is down, people want to be philanthropic,” says Sandi Connors, an executive at the United Way of Rhode Island, whose donor-advised funds in 2015 accounted for about a quarter of its $17 million in contributions. “They just need a vehicle. We have to look to the future and what we can be offering donors.”
Viva International
Other storylines emerging from this year’s Philanthropy 400 include an increase in giving to international groups.
Fifteen years ago, eight global relief and development organizations were sprinkled among the top 100 of the Philanthropy 400. Today, that number is 21.
That growth has been spurred in part by a series of major humanitarian disasters, including the 2010 Haiti earthquake, the 2011 Asian tsunami, and the Syrian refugee crisis. Also, the internet and social media have made the world feel smaller, nonprofit leaders say, with disasters brought close to home by images like last year’s photograph of the body of a 3-year-old Syrian boy who drowned crossing the Mediterranean.
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The International Rescue Committee (No. 111) has used social media to present portraits of refugees that fight “the caricature of them as Africans carrying their belongings in a bundle,” says Amanda Seller, senior vice president for revenue. “Refugees come from all economic backgrounds, all ethnic groups. They’re just like you and me.”
David Miliband, a former British foreign secretary who became head of the charity in 2013, has focused on testing program effectiveness and measuring impact, with good effect in fundraising, Ms. Seller says. “We’re having really interesting conversations with leadership donors about analytics, and therefore the need for information technology. And they say, ‘Yeah, I get that.’ " Contributions from high-net-worth donors have more than doubled over the past four years.
The three top international groups on the Philanthropy 400 receive at least half of their contributions in the form of medicines and other in-kind gifts.
Controversy occasionally accompanies these contributions: Doctors Without Borders (No. 73) recently turned down $1 million worth of pneumonia medicine offered by pharmaceutical giant Pfizer, arguing that such donations often come with too many strings attached and discourage competition that would force drug companies to lower prices on desperately needed drugs.
Still, donated drugs are a staple for many aid groups. Gifts of medicine accounted for all but $30 million of the $889 million in private donations to Direct Relief (No. 19) last year. At the Carter Center (No. 71), contributions from pharmaceutical companies made up three-quarters of 2015’s $210 million increase in giving, according to Phil Wise, the group’s vice president for development.
Alex Wong, Getty Images
UNCF, NO. 126: Big gifts will help pay for scholarships for African-American STEM students.
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The amount of medicine donated varies year to year, Mr. Wise says, but it’s steadily increased since the mid-1980s, when the center began tackling curable but neglected tropical diseases such as Guinea worm. “You’ve seen a real growth and acknowledgment that there are a lot of diseases now that can be conquered,” he says.
Social Service Flattens
Social-service organizations still capture more donor dollars than any other cause. However, a 15-year analysis of the largest social-service charities shows several perennial giants declining or flattening while smaller organizations, often bolstered by in-kind donations, are faring better.
While United Way’s drop was most jarring, Goodwill Industries (No. 18) and the Red Cross also faltered. Only four of the top 10 social-service groups increased giving in 2015: Feeding America (No. 3), the Y (No. 12), Habitat for Humanity International (No. 20), and the Wounded Warrior Project (No. 56).
Overall, the social-service organizations on this year’s list chalked up just a 2 percent increase in contributions since last year’s report.
Donations to Volunteers of America (No. 217) dropped nearly 16 percent last year, driven by a decline in in-kind support. Looking ahead, the charity plans to put more energy into reaching out to specific types of donors, especially millennials and women, says Jatrice Martel Gaiter, executive vice president of external affairs.
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“Across the board, human-service providers are being more aggressive in the relationship building with donors, and that’s paying off,” says Ms. Gaiter, who is also board chair of the National Human Services Assembly, a coalition of charities.
United Way, meanwhile, is developing new fundraising approaches, adding digital platforms as well as efforts to attract high-net-worth donors. Its affinity programs for women, African-Americans, young leaders, and others are seeing increasing contributions, says Mr. Gallagher. “I’d be disappointed if we didn’t see growth in revenues over the next couple years,” he adds.
Big Debuts in Education
Of the 14 groups making their debut on the Philanthropy 400, four are focused on education: the Challenger School Foundation (No. 204), which supports a private-school chain; DonorsChoose.org (No. 352), a crowdfunding site for classroom projects; the Wikimedia Foundation (No. 363), which backs projects that offer free information online; and Year Up (No. 392), an antipoverty group that provides career training and support to young adults.
All four of the organizations have been founded since 2000.
Sixteen-year-old Year Up more than doubled its giving in 2015 to $67 million. The gain included gifts from several donors who made seven-figure pledges and two who made the first eight-figure commitments in the group’s history. The organization opened its third campaign last year with a goal of $200 million, almost four times what it raised in a campaign that closed in 2013.
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Year Up is making gains with wealthy donors because it views them as investors, says Susan Murray, national director of development. Like business investors, Year Up supporters get a quarterly report. “We tell them the good things, the bad things, and what we’ve learned along the way,” she says.
The centerpiece of the organization’s campaign is a prospectus outlining its plans for growth and impact for the next five years. “We found it was a clear way to show why you would bet big on a nonprofit of Year Up’s size,” Ms. Murray says. “We’re not that old, and we’re not a household name.”
Comeback Legacy Groups
Some of America’s most recognizable charity brands have been faltering, but it is clear that some groups have staying power — 162 charities have remained on the list since 1991. This year, the Salvation Army was down nearly 10 percent, and the Red Cross was down more than 16 percent. But legacy organizations that serve children and youths are doing particularly well.
The Boys & Girls Clubs of America (No. 16) increased donations 12 percent, driven largely by a rise in gifts from individuals, both wealthy and average donors, as well as a growth in corporate partnerships.
Shriners Hospitals for Children
SHRINERS HOSPITALS FOR CHILDREN, NO. 91: Planned gifts made up nearly 60 percent of its $278 million in fundraising revenue.
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The national organization’s Great Futures campaign, launched midway through 2012, exceeded its $450 million goal two years early and has now raised $500 million. Many of the 1,140 local Boys & Girls Club organizations have also run successful campaigns.
The charity is now working to build a new data-collection and evaluation system to better track the performance of local clubs and how well kids do after participating in programs.
“A big part of why we’ve been successful is because of the way we’re really able to show donors and supporters where there’s need and how their support can help change outcomes for our kids and teens,” says Julie Teer, chief development officer.
In the spring, the organization launched a new effort to remain connected with its 16 million living alumni as they graduate from their programs and move onto college, the military, or the work force.
The Y, which has been working to rebrand itself as a social movement instead of simply a gym and swim club, increased giving nearly 29 percent.
United Way is pushed from the top rung of The Chronicle’s annual ranking of U.S. charities as a young upstart surges into the lead — signaling big changes for philanthropy. Plus: What drove big gains at some of the year’s notable organizations.
And the Girl Scouts of the USA (No. 227) increased contributions nearly 22 percent in 2015. Elena Pak, the organization’s chief development officer, says the most significant reason for the jump is a $1 billion capital campaign called ToGetHerThere. The historic drive, which concludes in 2020, is the first to seek $1 billion to benefit girls. In September, it reached 60 percent of its goal. Throughout the charity’s system, says Ms. Pak, “the number and the size of donations are increasing every year,” and the outlook is good for that continuing.
“We’re also seeing a nice trend in individual giving and corporate support,” she says. Many local councils have also run smaller capital campaigns and have added fundraising staff. And a push to secure bequests and other planned-gift commitments has seen those types of pledges double over the past five years, she says.
The gains have come despite organizational upheaval in recent years. Under the tenure of Anna Maria Chávez, the national Girl Scouts headquarters cut 25 percent of its staff. The group has battled a steady drop in membership, which is down roughly 30 percent from a peak of 3.8 million in 2003 to 2.7 million today. Ms. Chávez, who faced criticism over her management style, stepped down in June; the organization, now run by an interim leader, board member Sylvia Acevedo, is seeking a permanent CEO.
“We have really been thinking about our brand, about how we become more relevant to the girls. And that really resonates with the parents and the donors,” says Ms. Pak. “It’s a long-term effort, but we do see that all the work that was done paying off.”
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Heather Joslyn and Timothy Sandoval contributed to this article.