Fundraising Update

Welcome to Fundraising Update. I know a lot of us are reflecting on the verdict in the George Floyd murder case in Minneapolis. We take a look at how the decision could mark a turning point in philanthropy.

Plus, a philanthropy historian discusses how the pandemic and racial-justice protests influenced cash giving, billionaires’ donations, crowdfunding, and more.

I’m Eden Stiffman, senior editor at the Chronicle of Philanthropy. If you have ideas, comments, or questions about this newsletter, please write me at eden.stiffman@philanthropy.com.

‘This Is a Moment We Won’t Get Again’

Many people in the nonprofit world said they were pleased by the conviction of Derek Chauvin, who was found guilty of killing George Floyd, but they stressed that the fight for racial justice is far from over.

Tonya Allen, president of the McKnight Foundation and chair of the Council on Foundations, said the current moment can and should be a catalyst for progress on so many other issues held back by racial injustice, including affordable housing, voting rights, and environmental justice.

“This is a moment we won’t get again to push for transformational changes in public policies and practices,” Allen said. “Before the world moves on, philanthropy can use its considerable influence and conviction to push private and public sector leaders to listen to what frontline racial-equity community leaders have long been advocating for, which are shared power, participation, and prosperity.”

My colleagues spoke with nonprofit, advocacy, and foundation leaders about how to harness the momentum of the guilty verdict to advance racial justice.

Chanda Smith Baker, chief impact officer and senior vice president of the Minneapolis Foundation, urged foundations to move beyond “the transactional grant exchange” to become leaders on the issues of equity and criminal-justice reform.

We’ll continue to report on how organizations that work to improve policing, advance changes in the criminal-justice system, and promote other issues like voting rights and environmental justice are faring in their fundraising going forward.

Need to Know

32%

— Year-over-year growth in online giving

Online giving soared last year, according to an annual survey by M+R, an online fundraising and marketing firm that works with nonprofits. My colleague Emily Haynes reported on the poll of 220 nonprofits in the United States and Britain. The year 2020 was a standout compared with 2019 — when online revenue increased just 10 percent for the 135 nonprofits surveyed — and 2018, when it grew only 1 percent for the 201 groups in the survey.

Groups focused on hunger and poverty received 173 percent more online revenue in 2020 than they did in 2019.

What’s more, charities that directly responded to the health crisis or advocated for relief saw giving grow at nearly twice the rate as others. The frontline organizations in the survey accounted for 41 percent of the overall jump in online giving thanks to a spike in one-time donors. By comparison, revenue from one-time gifts grew only 21 percent at charities that didn’t directly address Covid-19.

Many more donors, however, chose to give one-time gifts to frontline organizations instead of becoming monthly donors. Growth in revenue from monthly donors was the same for organizations both on and off the front lines, at 26 percent.

Plus:

• Philanthropy Together, a year-old nonprofit that supports, trains, and launches giving circles worldwide, rolled out a new global directory of giving circles last week. The directory is searchable by cause and location and housed on Grapevine, a digital hub for giving circles to make donations and find members, Emily reports. A similar database of the few hundred giving circles that donate through the platform already existed on Grapevine, but the partnership with Philanthropy Together expanded that number to more than 2,150. Philanthropy Together hopes the directory will better tally the number of these groups and formally measure the funds they’re raising. The database could also be a resource for professional fundraisers seeking to connect with new groups of donors.
• Zoom meetings and virtual fundraising events became ubiquitous in 2020, and a growing number of organizations accelerated the adoption of increasingly inexpensive artificial-intelligence tools that aim to improve the quantity and quality of giving. New research from nonprofit tech strategists Beth Kanter and Allison Fine indicates that A.I. is creating opportunities not only to increase the amount of money raised but also to significantly improve the relationship between donors and organizations. But most nonprofits have a long way to go to both adopt and effectively integrate A.I. into their fundraising practices, they write. Read their advice on how nonprofits should zero in on A.I.-powered tools.

How to Adapt to a Changed Giving Landscape

Over the past year, philanthropy historian Benjamin Soskis has tracked how the upheaval of the pandemic and the protests for racial justice have affected how and why people and institutions give. Soskis, a senior research associate at the Urban Institute’s Center for Nonprofits and Philanthropy and a frequent Chronicle contributor, takes stock of those changes in a new report, “Norms and Narratives That Shape U.S. Charitable and Philanthropic Giving.” He recently spoke with Emily about how fundraisers and philanthropy leaders can adapt to a changed giving landscape and prepare for an uncertain future.

She asked him whether he thinks the changes that we saw in philanthropy over the past year — like more timely gifts, no-strings-attached grant making, a greater willingness to give to crowdfunding campaigns — will stick around. How, given the uncertainty, should fundraisers and nonprofit leaders plan for the future?

“I wish I had a clear answer for that,” Soskis told her. “There’s one type of timeliness, which is just thinking about time as an important dimension of giving. Then there’s another, which is the importance of giving staked to your particular moment. During the crisis, people were talking more and more about time as a component, but also they were increasingly thinking about their responsibilities as givers to the moment — whether that means giving rapidly or it just means thinking about now versus later.”

He believes that first category will endure. “It is very likely that this crisis has made more and more people think about time as a central component of their giving strategy. It might make people think more about their responsibility to the future, in the same way that people think about their geographical responsibilities — their responsibility locally or nationally or internationally.”

Read the rest of their conversation. There’s a lot to chew on.

Tips & Tools

• A Donor’s Perspective on Fundraising, Donor Relations, and More: Isa Catto, executive director of the Catto Shaw Foundation, explores issues affecting nonprofits and the donors who support them in a series of columns for the Chronicle.
• How to Connect With Prospective Major-Gift Donors Now: Three veteran fundraisers offer advice about how to build relationships at a time when meeting face-to-face is still tricky.
• Understanding and Tapping Into Donor-Advised Funds: These philanthropic accounts have become the preferred giving vehicle for many donors. Use this collection of articles and other resources to learn how charities can connect with fund holders.

What We’re Reading

• “If you put your name on something, it is not charity, it’s philanthropy. You get something for it. If you want your name on it, it’s a business deal.” A look at Empire of Pain, Patrick Radden Keefe’s new history of the Sackler family and what it reveals about their giving demands. (New York)
• Jennifer Pritzker, the world’s only known transgender billionaire, threatened to pull her vast fortune from Tennessee if lawmakers pass transphobic legislation currently under consideration. The decorated military veteran and philanthropist, whose estimated worth hovers around $2 billion, told lawmakers they are creating a hostile environment for her family and their vast wealth with their actions. (Out)