Fundraising Update

Welcome to Fundraising Update. This week, we’re looking at what recent survey data tells us about year-end giving. Plus, experts weigh in on the prospects for a new plan to boost payout from donor-advised funds and foundations.

I’m Eden Stiffman, senior editor at the Chronicle of Philanthropy.

Thanks to sponsor iDonate for supporting Fundraising Update.

By the Numbers

A tumultuous year will end with what promises to be one of the most challenging December fundraising seasons in recent memory.

With the pandemic still disrupting our daily lives, high rates of joblessness, the echoes of a divisive election still reverberating, and newfound urgency driving the national discourse on racial and social justice, fundraisers will have a lot to compete against for the attention of American donors.

While the jury is still out on how 2020 giving will wind up, we’ve compiled a list of articles to give you insight into how donors are thinking about their giving going forward, based on data-driven insights from researchers studying philanthropy and nonprofits. Here are a few of the highlights:

36%

— Share of donors who say they will give more generously this month than they did last December

An August survey of more than 1,000 people who contributed at least $100 in 2019 found many still plan to ramp up their giving toward the end of the year. Sixty-one percent of donors who plan to give more in December have already given more in 2020 than in all of 2019, according to the poll, conducted by market research firm McQueen Mackin & Associates. What’s more, nearly 80 percent said in July they had already matched or exceeded the amount of money they had donated to charity in 2019.

Forty-four percent of donors plan to give the same amount, and 20 percent plan to reduce their giving.

7.5%

— Year-over-year increase in giving in the first half of 2020

In March, as much of the economy slowed down because of the pandemic, no one knew exactly how donors would respond to the disruptions. But this analysis from the Fundraising Effectiveness Project is one of a growing number to suggest how generously donors responded during the first half of the year.

The increase over those first six months marked a big shift from the first quarter, when the same data showed giving down 6 percent compared with the first quarter of 2019.

More donors at all levels have given during the pandemic, but small donors have been a major driver of growth. The number of donors who gave less than $250 increased 19 percent year-over-year in the first half of 2020. Likewise, the number of midlevel donors — those who gave $250 to $999 — increased 8 percent.

433 %

— The response rate of new food-bank donors over existing donors

Many food banks have had a surge in new donors in 2020 as the need for food assistance skyrocketed during the pandemic. Some fundraisers at these charities worry whether the new donors will continue to support their cause. GivingTuesday offered a first glimpse at whether nonprofits would be able to retain new 2020 supporters.

RKD Group analyzed fundraising results for 20 food banks that participated in the giving day both this year and in 2019. Over all, they raised $6.05 million on GivingTuesday, up from $1.28 million in 2019. The food banks identified different behaviors from donors who made their first gifts since the pandemic began compared with existing donors.

It’s a limited sample, to be sure, but it points to the potential of these new supporters.

Read more data-driven reports and analysis about giving and fundraising.

Checking In

The year end is always a high-stakes time for nonprofits, but 2020 has brought a whole new set of stressors. How are you and your fundraising colleagues holding up right now? Are you concerned about burnout? How are you keeping morale up on your team? Drop me a line and let me know how it’s going.

Need to Know

“Whenever you have this much money in the system, you’re going to have some kind of regulation or oversight at some point.”

Last week I mentioned the Initiative to Accelerate Charitable Giving, a push to urge Congress to adopt a set of tax proposals intended to increase distributions from foundations and donor-advised funds. Alex Daniels is back with a follow-up story on the prospects of this new effort, which is backed by a coalition of wealthy individual donors, some of the nation’s largest private foundations, and prominent scholars on charitable giving.

The plan, which has yet to result in a bill before Congress, faces long odds in a government consumed with post-Trump shifts in foreign policy, climate change, health care, and other priorities, Alex writes. On top of those challenges, many lawmakers lack a deep understanding of nonprofit tax law. Still, some experts say the plan’s diverse and prominent set of proponents could pave the way for major changes in the regulation and oversight of philanthropic institutions in the future.

Plus:

• Contributor Ben Gose looks at what’s on charity advocates’ wish lists in the Biden-Harris administration. On the tax front, the top priority for many is expanding charitable deductions for people who don’t itemize on their tax returns. The 2017 Tax Cuts and Jobs Act doubled the standard deduction, which sharply cut the number of people who itemize and receive a financial benefit from their charitable gifts. The Cares Act took a small step toward restoring giving incentives, allowing individuals who don’t itemize to deduct $300 in charitable gifts on their 2020 taxes.

  In June, a bipartisan group of senators introduced legislation that would expand the charitable deduction for people who don’t itemize to a third of the standard deduction — $4,000 for individuals and $8,000 for couples. But tax experts say a major expansion is unlikely to make it into law until Congress gets a chance to examine the impact of this year’s $300 deduction. Mark Mazur, an economist and director of the Urban-Brookings Tax Policy Center, says the bigger deduction might be considered in 2022 or 2023 — but only if this year’s more modest change is found to have stimulated new giving.
  

• Most foundations say they are paying more attention to issues of racial justice and social equity now than before the Covid-19 pandemic, although not all groups of people benefit equally, according to a new survey from the Center for Effective Philanthropy. My colleague Michael Theis digs into the report based on responses collected in August from 236 foundations. Seventy-five percent of foundations reported new efforts aimed at Black communities, and 63 percent were extending new support to Hispanic communities. However, only 47 percent reported making new efforts to support charities that serve undocumented immigrants, and 25 percent reported new efforts to support charities that serve Native American communities.

Tips & Tools

• How to Inspire Major Donors to Give at the End of a Very Tough Year: A five-step recipe for big-gift fundraising success in challenging times.
• How to Thank Donors During a Crisis: Fundraising experts share nine ways to show appreciation, stay in touch, and even inspire greater giving from supporters amid the pandemic.
• Study Shows How Nonprofits Should Improve Online Gatherings: Many meetings have little structure, and participants don’t always know if they need to turn on web cameras or whether it’s OK to leave them off.
• How to Win DAF Gifts: We’ve mined our archive for recent articles, webinars, and advice to help you develop strategies to connect with people who give using a donor-advised fund.

What We’re Reading

• Ill will over the renaming of a public hospital in San Francisco for Facebook CEO Mark Zuckerberg and his wife, Priscilla Chan, led a small group of city officials to condemn the name in a vote this week. Three members of the city’s Board of Supervisors voted to recommend that the full board condemn the name. One of the supervisors argued that the name is especially inappropriate now, given that misinformation on Facebook is worsening the public-health crisis. Local critics have been complaining at least since the summer about the renaming, which came after Zuckerberg and Chan donated $75 million five years ago, but the resolution suggests condemnation instead of revocation because the donation agreement requires the hospital to keep the name for at least 50 years. (Vox)
• A French philanthropist has left a bequest to some unusual beneficiaries in his will — around 50 cats living in the State Hermitage Museum in St. Petersburg, Russia. The site has been home to cats since the time of Empress Elizabeth, who reigned from 1741 to 1761. Now they are taken care of by volunteers and museum staff and supported by donations. The funds will likely be used to repair the museum’s basement, where the cats live. (CNN)
• Arts funding was in crisis well before 2020, but the events of this year have proven that cultural groups can’t wait any longer to reimagine models for a more sustainable future, writes the director of the Arts Funders Forum. To survive, arts organizations must change how they frame themselves to the public. That includes better linking the arts to solving global challenges and explaining “how artist entrepreneurs have always helped drive societies forward.” (artnet News)