Nonprofits Report Strong Fundraising Gains in 1st Half of 2015

Ryan Horn, GSC Phoenix Church Outreach

Charities nationwide are seeing strong fundraising growth so far in 2015 and reporting signs that the long-awaited transfer of wealth from the aging baby-boom generation is finally starting to occur.

As a result, many charities are stepping up efforts to seek bequests and other planned gifts, among other strategies to seize an opportune time to boost their finances.

“The transfer of wealth is real,” says Peter Wilch, the University of San Francisco’s vice president for development.

The university is seeing growth in gifts of real estate and other types of appreciated property. To take advantage of that trend, it has doubled its fundraising staff to 31 people.

“So many of our constituents have their wealth in real estate,” Mr. Wilch says. “Now we have the bandwidth to be more effective.”

For example, last year the university received two big property gifts, one a home sold to generate a gift of more than $2 million and the other a similar amount from a property used to create charitable trust that will benefit the university when the donors — a couple in their mid-70s and early 80s — pass away.

Steve Maislin, the chief executive of the Greater Houston Community Foundation also reported a big shift in the structure of his organization’s fundraising operations as a result of demographic trends.

“Most nonprofits are paying attention to the difference in giving among the generations,” he says.

The 20-year-old foundation has experienced rapid growth in contributions, about 30 percent annually for the past few years, and 2014 was a banner year with $181 million contributed.

In 2008, the foundation created a team geared largely toward working with donors on plans for the transfer of family wealth. Ten of the foundation’s 24 staff members now work on this team.

“We’re doing a lot of work with aging baby boomers who want to create succession plans,” says Mr. Maislin. “Because there’s been a lot of wealth created in that generation, you see a lot of people thinking, How much do I want to leave my family?” In many cases, he adds, donors want family members involved in distributing the wealth, but regardless, “the dollars are going into the philanthropic sector.”

The Indiana University Lilly Family School of Philanthropy will provide a fuller picture of fundraising trends nationwide on Tuesday with the release of its annual “Giving USA” estimates for charitable giving in 2014. Last year’s report estimated that giving by individuals, corporations and foundations totaled $335-billion in 2013, a 3-percent increase over 2012.

Demanding Donors

Some fundraisers say their shifting strategies are due in part to the fact that baby boomers are more demanding than earlier generations.

Food for the Hungry, a Christian group that works overseas, has responded by taking more of its most generous donors abroad to see their dollars at work.

“We’ve been more intentional about getting them into the field because we’ve seen its success,” says Mike Meyers, the charity’s chief fundraiser. “People get a lot more passionate and start giving more sacrificially or generously.”

Worries Persist

Despite the economy’s growth and strong recent fundraising returns for many organizations, some groups are worried about the potential for rising interest rates and a stock market that may be overdue for a correction. Either could cause giving to falter.

And for local United Ways that depend heavily on workplace giving drives, waves of retiring baby boomers present a big challenge as those charities struggle to engage younger workers.

“Last year was the first year that we did not raise more than the previous year in about 10 years,” says Patricia Berger, president of the United Way of Grand Forks, which supports charities in both North Dakota and Minnesota. “We saw more of our leadership donors retiring, and we’re going to see even more of that.”

In addition, the fundraising boom appears to be bypassing some regions of the country. And nonprofit leaders who work with the poor say that a strong economy can make life worse for those who remain unemployed or underemployed, no matter where they live.

One of the misconceptions about a strengthening economy is that everybody will benefit, says David Bobanick, executive director of Rotary First Harvest, a Seattle charity that helps food banks find produce. “People living in poverty are not able to pull themselves up, because they start running up against increased cost of living.”

Even as Rotary First plans for an increase in bequests and other planned gifts, he adds, “we are bracing for the number of seniors who need assistance.”

And some experts are concerned about studies showing that elite nonprofit institutions are capturing a disproportionate share of recent fundraising gains, contributing to a growing sense of inequality in the country. An annual study by the Council for Aid to Education, for example, found that just 20 out of more than 3,000 colleges captured nearly 30 percent of the donations in higher education last year.

Calculated Risk

Still, many groups are enjoying the good times for however long they may last. The Phoenix Rescue Mission is projecting a 14-percent gain in contributions when its fiscal year closes at the end of this month.

“Some of this growth is clearly attributable to an improving economic situation, especially for the 3 percent of our donor file that gives at the highest levels,” says Mark Publow, chief development officer. “Giving with regular donors is much more of a mixed bag.”

For the past three years, the charity has taken what Mr. Publow calls “a calculated risk” and stopped spending as much to seek repeat gifts from people who give $50 or less annually. As a result, it has fewer donors: 32,832 at the end of fiscal 2014, down from more than 40,000 two years before.

But the charity is raising more money now, and the average gift has increased by 32 percent since fiscal 2012, to $107, “This growth in average gift has offset the decline in the donor file,” Mr. Publow says.

Even better: The rescue mission has recruited about 1,200 new donors this year. “For the past 12 months, we have seen the active door file begin to grow again with significantly larger first-time average gifts and with significant improvement in second-gift conversions,” says Mr. Publow.

And not all the fundraising firepower is directed at baby boomers.

The San Francisco SPCA has had some success reaching out to donors in their 20s by running a series of campaigns on Imgur, a social-media site favored by young people. With online spots about individual animals the shelter has helped save, including the story of a kitten named Pickles, the group has raised about $20,000 in small gifts, says Donna Blakemore, vice president for development.

But such donors, Ms. Blakemore says, “are still experimenting and don’t stay loyal.”

Her organization’s real support, as is true of most charities nationwide, remains older, wealthier donors. At San Francisco SPCA, 70 percent of donors who give $1,000 or more make a repeat gift. The charity has seen a 20-percent surge in contributions of that size after creating programs such as Sido, aimed at older donors. Named after a dog slated to be put down when her owner died, Sido offers a way for pet owners to work with the SPCA on a plan to provide a new home for their animal when they die.

About 450 people who have agreed to give an annual gift of significance relative to their means have joined the Sido program. They are also asked to make the SPCA a beneficiary in their estate plans. In return, the donors work with SPCA officlals to create a detailed plan for how their pet will be transported to the shelter and cared for in the event of their death or a move to a nursing home.

The donors also provide instructions about the type of home they want for their pet and information on any special needs the animal has.

The program is just one example of a fundraising trend that has become much more pronounced among aging baby boomers who want to engage with a broader range of people than just fundraisers, says Joe Golding, chief executive of Advancement Resources, a fundraising training and consulting firm.

Fundraisers, Mr. Golding says, “have become choreographers, putting together a team of officials who interact with the donor.”