New Orleans Cooks Up a Special Sauce to Boost Middle-Class Giving

Gigsy

When levees broke in the wake of Hurricane Katrina, two floods inundated New Orleans. The deluge of water devastated the city, killing more than 1,000 people and destroying neighborhoods. A tidal wave of donations and government and foundation grants, meanwhile, kept nonprofits afloat as they worked to help communities recover.

Both floods eventually receded. Left high and dry when the cash ebbed, charities had to develop other sources of revenue. To help, the Greater New Orleans Foundation hosted fundraising training for groups courting individual donors for the first time or expanding their efforts.

In sessions, foundation officials stressed the importance of the small donor. “We believe everybody can be a philanthropist,” says Joann Ricci, the community foundation’s vice president for organizational effectiveness. “Whether you are a millionaire or you have an hourly job, your responsibility is to give to the best of your ability.”

That’s the egalitarian message of the foundation’s annual giving day. In May, the event raised nearly $4.9 million from nearly 40,000 contributions. Remarkably, about a third of donations were from gifts of $10.

Middle-Class Clout

The Big Easy is clearly a place where the middle class is more than pulling its weight. New Orleans taxpayers who earned less than $100,000 and took a charitable deduction give considerably more on average than their counterparts in other large metro areas, according to a Chronicle analysis of Internal Revenue Service data from 2015. Those who earned $50,000 to $75,000 in 2015, for example, gave away 4.6 percent of their income — well above the 3.8 percent national average for large cities and better than almost two-thirds of its peers.

Such giving is noteworthy given that the middle class — once an anchor of workplace-giving programs and year-end gifts — is shrinking nationwide. The proportion of people who reside in middle-income households fell in 203 out of 229 U.S. metro areas from 2000 to 2014, reports Pew Research Center.

That demographic shift looks different in every city. Some places are getting richer, like in Midland, Tex., where money has poured into town as a result of fracking, which is freeing oil reserves. But other parts of the country are getting poorer. Blame stagnant wages, an increased cost of living, the loss of manufacturing jobs, or the rise of digital commerce. No matter the cause, some charities believe middle-class woes are hurting giving.

“We’re for sure seeing fewer middle-class Americans with the ability to give,” says Brian Gallagher, chief executive officer of United Way Worldwide. “They have way less discretionary income, and charitable giving is the most elastic gift anyone will make; it’s completely driven by discretionary income.”

In McAllen, Tex., poverty is high and wages are low. Reliant on annual workplace gifts of $100 to $1,000, the McAllen-based United Way of South Texas has struggled to raise money, especially since 2013, when big employers started leaving the region.

Over the same period, demand for social services has increased, says President Thelma Garza: “Sometimes it feels like we’re just barely touching the tip of the iceberg.”

Still, the middle class is a mainstay of giving in some cities. Places like Grand Rapids, Mich., Tulsa, Okla., and Jackson, Miss., are seeing low- and middle-income earners give at rates well above national averages, according to the Chronicle analysis. Even those making $50,000 to $75,000 in hard-hit Detroit give away 3.9 percent of their income.

Building on Small Donors

In New Orleans, many charities are building out giving programs anchored by small donors. Nearly half of nonprofits surveyed by the Greater New Orleans Foundation in 2015 reported they created a new fundraising plan and increased their individual donor contributions over the past five years.

The foundation’s giving day is a valuable springboard for young, expanding giving programs; its rewards are cash but also names and contact information for potential new donors. So, too, are the social events that local organizations host, often built around the New Orleans staples of good food and good music.

There are more modern strategies at work, too. Launched two years ago, the New Orleans nonprofit Electric Girls, which ran a crowdfunding campaign that raised more than $10,000, relies on technology to connect with donors. That seems fitting, since its afterschool programs and summer camps teach girls how to tinker with circuits and experiment with computer coding.

One way the founder, Flor Serna, keeps small donors engaged: detailing exactly how their gifts — no matter how modest — help the girls learn. A $6 donation buys a pack of LED lights good for a semester at an after-school program. A $20 donation pays for a pair of wire strippers.

“Everything we do is tangible,” Ms. Serna says. “We tie low price points to direct impact.”

The nonprofit’s revenue has grown tremendously in its short existence: Donations increased from about $126 to more than $14,000 from 2016 to 2017. Its median gift size is $25.

Electric Girls also thanks donors in a highly personalized fashion. It maintains an Amazon wish list of curriculum needs — almost a gift registry for donors. When a supporter buys a pair of safety glasses, for example, the organization sends a thank-you note with a photo of a girl wearing a pair.

Such “mass customization,” courtesy of technology, is exactly what can help charities that rely on middle-class donors, Mr. Gallagher says. Many United Ways are experimenting with how to personalize each donor’s experience.

Last year, 22 local United Ways in North America ran a campaign called Make Your Moments, which surveyed donors about their priorities, then provided related information and connections to others who shared their ideas. The annual workplace campaigns in participating markets raised 30 percent more than they had the previous year.

Raven Stout

Charitable economic-development projects may also hold appeal for middle-class donors. In New Orleans, the nonprofit UnCommon Construction trains — and pays — high-school apprentices to oversee adult volunteers who build houses to be sold upon completion. Proceeds are funneled into scholarships for the students.

The group’s median donation is $50. Aaron Frumin, the founder and executive director, says supporters respond to the concept of empowering young people and pointing them toward careers. “It tells a compelling story,” he says. “It’s not a volunteer or community-service opportunity for a kid; it’s work-force development.”

The volunteer opportunity also inspires people, Mr. Frumin says, along with the fact that 100 percent of program graduates have maintained employment.

Donors also like that the organization relies on earned income and potentially earns back 70 cents for every dollar donated. A large graphic of the business model — highlighting how donors, volunteers, sponsors, and home buyers keep the organization running — is featured at each new home site.

“The earned-revenue model is exciting for those people in the middle,” Mr. Frumin says. “It’s kind of intuitive. People get it.”

Ultimately, a strong sense of place may be key to inspiring the middle class to give locally. New Orleans benefits from what Ms. Ricci describes as a culture of giving molded by deep religious faith (which leads to tithing) and the city’s history of hardships, including Katrina.

“We’ve always had to help each other,” she says

During this year’s giving day, even a homeless man was moved by the spirited display of local philanthropy, Ms. Ricci reports. He contributed $8, saying, “Look, I don’t have much, but there are people worse off than me and I want to give and I want to be a part of this.”

Tyler Davis contributed to this article.

Correction: A previous version of this article said that about a third of the $4.9 million raised in the city’s May giving day came from gifts of $10. It should have said that a third of donations were gifts of $10.