A weekly rundown of the latest fundraising news, ideas, and trends gathered by our fundraising editor Eden Stiffman and other Chronicle contributors. You’ll also find insights from your fundraising peers. Delivered every Wednesday.
From: Eden Stiffman
Subject: How Fundraising Is Faring at Big Charities
Hi, I’m Eden Stiffman, senior editor at the Chronicle of Philanthropy. Thanks to Nicole Wallace who filled in while I was working on the project I'm excited to share with you all today.
This week, we talk about how fundraising is going at big nonprofits — and fundraisers' outlook for 2021. Plus, how Biden's tax plan could affect charitable giving. Some experts are worried.
Thanks to sponsor DonorPerfect for supporting Fundraising Update.
Giving in Uncertain Times
My colleagues Emily Haynes and Michael Theis and I have spent recent months interviewing more than two dozen development leaders about their institutions' fundraising during the pandemic, economic downturn, and the social unrest rocking the country. You fundraisers have a lot on your minds.
We also combed through surveys from 116 of the largest organizations to take a temperature check of giving in these uncertain times.
It's a mixed bag, for sure. But overall giving to the nonprofits in our survey was nearly 21 percent higher during the first six months of the year than it was during the same period in 2019. In the second quarter, giving spiked almost 41 percent above the same time last year.
During the worst economic downturn since the Great Depression, it's no surprise that giving to food banks and other charities that serve people in need has skyrocketed.
As Jennifer Powell, chief development officer at the Central Pennsylvania Food Bank, told me, “We are continuing to receive donations at a higher level than any year in the past.” But that's coming in a moment when millions of people are out of work and struggling to pay for basic needs like food and housing.
The nonprofit hasn't stopped its frequent appeals to donors.
“We continued our path of asking — and asking for more,” Powell says. And that approach has been successful. “We did not get backlash, we did not see donor fatigue in those six months, and people gave, and they gave again, and they gave again.”
But fundraising has also shot up at many organizations that don't have a direct connection to the crises of the moment. Large environmental groups, for example, are doing quite well.
That growth, however, was not enjoyed by all. Thirty-one survey respondents saw giving decline in the first half of 2020 compared with last year. And some charities whose business models rely heavily on in-person events and ticket sales face a challenging future.
The Metropolitan Museum of Art reopened at a limited capacity after its longest closure in more than 100 years. Many donors have continued to support the museum, but Clyde Jones, senior vice president for institutional advancement, told me he's concerned about what will happen if Covid-19 cases surge again in New York City and the museum is forced to temporarily shut its doors once again.
“My concern is how long will people stay committed if they can't come. That's a huge, huge fear,” he says. “I don't know how many times we can go back to people and say, ‘It's an emergency again.’ You become a little like Chicken Little. How often can the sky fall?”
Here are some of the other themes that came out of our research and reporting:
- Individual giving had a strong showing over all, with major donors stepping up to the plate in an economy that continues to favor the wealthy. “The people who had good jobs, good incomes, had assets — they recovered just fine in most cases, but poorer people, lower-income people, people of color have gotten decimated,” says Brian Gallagher, chief executive of United Way Worldwide. “Anyone who's in a position to give is giving the same or more. But you've got tens of millions who aren't in a position.” Still, smaller donors have responded in a big way, with many nonprofits reporting surges in new supporters this year.
- The future of corporate giving is a concern for some charities. Over all, 44 of the 95 nonprofits that responded to a question about corporate giving trends said they saw more corporate gifts in the first half of 2020 than in the same period in 2019. Twenty-six nonprofits said the number of corporate donations had stayed steady compared with last year, and 25 said it had decreased.
- Foundation giving was a more steady source of support, with 61 of 105 charities reporting an increase in the number of grants during the first half of 2020 compared with the same period in 2019. What's more, many charities said their supporters had relaxed grant restrictions or gave more general operating this year to support activities including fundraising.
- Fundraising events remain a sore spot, even as some organizations find success with virtual gatherings. Of the 91 nonprofits that answered a question about fundraising events, 64 said the number of event donations their groups received declined in the first half of 2020 compared with the same period the previous year.
Across the board, organizations are tempering their expectations for the end of the year. Some fundraisers wonder anxiously whether people who felt compelled to address the crises of 2020 early in the year will continue to give as unprecedented needs spiral and donors remain concerned about their own jobs and finances. In addition, many fundraisers expect that donors will take a pause in their giving while they wait for the outcome of the presidential election in less than a week. We'll be tracking what happens. Watch this space.
Need to Know
— Upper limit on the value of a charitable deduction for people making $400,000 or more under a Biden tax proposal
If Joe Biden wins the presidential election, nonprofits and foundations will largely rally around his proposals to help low-income Americans, including expanding the earned-income tax credit and the child and dependent care tax credit. However, charities are increasingly relying on the wealthiest Americans for philanthropic support — and Biden’s plan includes at least a few proposals that could curtail giving by wealthy Americans.
One would reduce the tax write-off for wealthy Americans from 37 percent of a gift's value to 28 percent. That means that donors would be able to write off $28,000 of a $100,000 gift instead of $37,000, as is the case today. Arthur Brooks, a professor at Harvard University and former president of the American Enterprise Institute, says that limiting the deduction would be a disaster for universities, arts institutions, and other charities that rely heavily on big gifts from the wealthiest Americans.
But other economists suggest that Biden's proposals on capital gains would likely encourage very wealthy Americans to give more. Contributor Ben Gose examines these and other proposals and their potential impact on giving.
- A quarter of alumni say they supported their alma mater this year, according to a new national survey of more than 17,360 graduates of four-year colleges. Among respondents who had given to their alma mater in the last five years, 17 percent said their drive to donate was down this year, Emily reports. Ten percent of respondents who had donated to their college in the last five years said they were more likely to give again this year. Those motivated donors said they were most drawn to support emergency relief funds for students and the annual fund. But interest in virtual events is picking up, underscoring a trend some college fundraisers have noticed since the spring. Forty-one percent of college graduates say they may join a virtual event at their alma mater this fall. Among respondents who were considering attending a virtual event in the coming months, 65 percent said their interest in online programming has increased since before the pandemic.
- Some millennial and Generation X philanthropists think it's high time that donors take a less arrogant approach to their giving and spend more time listening to charities that work to help those struggling the most right now and the people they serve. That's what my colleague Maria Di Mento heard in a recent online conversation during which three young philanthropists talked about how the pandemic, recession, and today’s racial-justice movements are affecting their giving approach. These donors said the next generation of philanthropists should prioritize what the people most affected by today’s crises say they need and that wealthy donors should take a step back and refrain from imposing their assumptions about what works best on struggling communities. “This moment represents an opportunity to disrupt the top-down donor dynamic,” said Andrew Dayton, a Rockefeller heir who leads the Constellation Fund, which works to raise the living standards of people who live below the poverty line. “Instead of listening to me, a rich, white male, listen to the communities that experience poverty instead.”
Tips & Tools
- How to Make the Most of GivingTuesday or Any Giving Day: Tools, articles, and other resources to help you prepare for #GivingTuesday.
- How to Advance Pay Equity at Your Nonprofit: Experts share simple steps managers can take to ensure fair compensation for women, people of color, and other groups that are often underpaid.
- Expert Tips on Major-Gift Fundraising During a Crisis: Tactics and advice from veteran fundraisers to help you stay in touch with big donors, bring them closer to your cause, and boost results over the long term.
What We're Reading
- The Susan G. Komen Foundation will close all 64 of its local chapters across the country by the end of the year. Perhaps one of the best-known supporters of breast-cancer research, the nearly 40-year-old organization has been announcing closures and consolidations on a rolling basis since at least January, as revenue from its marquee Race for the Cure event had been dwindling. The pandemic then pushed it over the edge. Komen will operate only from its Dallas headquarters, doing “direct patient advocacy and research.” Komen reported a deficit of nearly $2 million and net assets of almost $117 million in 2018. (Pittsburgh Post-Gazette)
- Two former trustees of the Baltimore Museum of Art have canceled plans to give it $50 million to protest the museum's plan to sell works by Andy Warhol and two other artists. The chairwoman of the board said there is no record of the donors' pledges, but one of the former trustees — who also stepped down in protest — said they were made verbally. The museum says it is financially sound, but it wants to use the proceeds of the sale, which include Warhol's "Last Supper," to create an endowment, fund efforts to diversify its staff and collection, and raise salaries. One hundred and fifty of the museum's supporters have asked state officials to intervene to halt the sale. Artists Amy Sherald and Adam Pendleton have also resigned from the board of trustees as a result of the controversy. (Washington Post)
- A wealthy California couple is suing Fidelity Charitable over a large stock donation to a donor-advised fund that went bad. Former hedge-fund manager Malcolm Fairbairn and his wife, Emily, gave 1.9 million shares of an energy stock to Fidelity at the end of 2017, seeking a tax break that could also support some favorite causes. Fidelity Charitable sells stock gifts, but the Fairbairns said they were promised a "gentle" sale that would not flood the market and drive down the price of the shares. Instead, Fidelity sold the stock within 154 minutes, and the share price plunged. Fidelity says it made no such promise and that the sale did not cause the stock, which has since sunk even lower, to tank. The trial began last week in federal court in Northern California. (Wall Street Journal — subscription)
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