Fundraising Update

Welcome to Fundraising Update. This week, we look at the return of processing fees for donations made on Facebook and Instagram — and what they mean for nonprofits. Plus, a donor who leaves a bold legacy of “giving while living.”

I’m Nicole Wallace, features editor at the Chronicle of Philanthropy. I’m filling in for Rasheeda and Emily, who are hard at work talking to fundraisers across the country for a big project you’re going to love come November. If you have ideas, comments, or questions about this newsletter, please write me.

Thanks to sponsor DonorPerfect for supporting Fundraising Update.

Fees Return on Facebook

Being able to raise money on Facebook has been a godsend for Grace Attwa, chair of the board at Seeds for Hope, an all-volunteer nonprofit that supports youths and education in Kenya.

Attwa has raised some $50,000 through birthday fundraisers and GivingTuesday posts on the social-media site over the past seven years. Facebook covered all the processing fees on those donations. If it hadn’t, Seeds for Hope or its donors would have had to pay more than $1,000.

“That’s enough to pay the school fees of a Kenyan child for one year,” Attwa told Chronicle contributor Phoebe Farag Mikhail.

Big changes are coming to how Meta, Facebook and Instagram’s parent company, handles donations — and, possibly of greatest interest to nonprofits, the company will no longer pick up the tab for processing fees, Phoebe reports.

In late August, Meta sent an email to all nonprofits registered to accept donations on its platforms, ,announcing that as of October 31, it will no longer process charitable giving on Meta Payments.

Meta will stop covering donation transaction fees and will no longer support recurring contributions. All gifts made on Facebook and Instagram will be processed through the PayPal Giving Fund.

Nonprofits that want to continue using Meta’s fundraising tools must register with the PayPal Giving Fund, and online donors will have the option to increase their donations to cover processing fees, which will be 1.99 percent of the gift plus 49 cents. Otherwise, nonprofits will foot the bill.

Many nonprofits have taken advantage of Meta’s platform for peer-to-peer fundraising on Facebook and Instagram. Meta reports that users have raised $7 billion for charity since digital donations went live on Facebook in 2013.

The new fees will add up.

“For nonprofit organizations of all sizes, every 50 cents, every dollar, every two dollars, which is what we’re talking about with these fees, depending on the size of the contribution, makes a huge difference,” said Jennifer Rigg, executive director of the Global Campaign for Education-US, a nonprofit that promotes education as a human right.

While larger nonprofits with fundraising staffs may be able to weather a shift like this, smaller organizations run mostly by volunteers will struggle, Attwa said. “I wish that they had asked organizations what this means for them.”

To find out more about the changes, including Facebook’s decision to drop recurring gifts, read the full story.

Need to Know

— How much Charles Feeney gave during his lifetime

Philanthropist Charles Feeney made good on his promise to give away his fortune and became a champion of “giving while living.” In 1982, Feeney, an Irish-American businessman, secretly transferred the entirety of his ownership share in his company, other business holdings, and properties to his foundation, Atlantic Philanthropies, reported my colleague Maria Di Mento. When he died on Monday, at the age of 92, he was living in a rented apartment in San Francisco.

Feeney co-founded DFS, a chain of airport duty-free stores, in the 1960s, becoming a billionaire along the way. Modest by nature, Feeney gave quietly and went so far as to threaten to cut off support to charities if they revealed his name publicly. He grew to dislike the lifestyle of the ultra-wealthy and promised in 2002 to give his fortune to charity during his lifetime and said the foundation would cease grant making by 2016.

Feeney kept his promise. The foundation concluded its active grant making that year and closed its doors for good in 2020.

“I cannot think of a more personally rewarding and appropriate use of wealth than to give while one is living — to personally devote oneself to meaningful efforts to improve the human condition,” Feeney wrote in 2011 when he and his wife, Helga, signed the Giving Pledge.

To learn more about Feeney’s legacy, read Maria’s article.

Plus …

• Giving to women’s and girls’ groups is up — but still lags other causes. Women’s and girls’ charities received $8.8 billion in 2020, which was a 9.2 percent increase from 2019, according to a new study. But that $8.8 billion represents only 1.8 percent of total charitable giving to all other types of nonprofits in 2020, the findings show. All other causes saw an 11.3 percent increase in 2020.

  The Women & Girls Index study, produced by the Women’s Philanthropy Institute, is part of the Lilly Family School of Philanthropy’s Equitable Giving Lab, a program that is supported by Google.org and aims to create a better understanding of charitable giving to diverse communities and underserved groups of people. The study includes data from 51,756 nonprofits, 3.6 percent of total charitable organizations registered with the IRS.

Gift of the Week

Masago Shibuya Armstrong led a fascinating life. The daughter of Japanese immigrants, her parents started a flower farm, and over time, the family became one of the most prosperous flower growers in the area, known especially for their chrysanthemums.

Armstrong earned a master’s degree from Stanford University in 1941, but her and her family’s lives were turned upside down the following year. They were imprisoned in the internment camp for Japanese Americans at Heart Mountain in Wyoming. Armstrong’s mother died there, and her family was not released until April 1945.

Masago Shibuya Armstrong left $1 million to Pomona College to support the Towa Yamaguchi Shibuya Scholarship Fund, which Armstrong launched many years ago in honor of her mother. Armstrong served as the college’s registrar from 1955 until she retired in 1985, and she stayed closely involved with the college until she died last year at 102.

For other notable gifts this week, read my colleague Maria Di Mento’s Gifts Roundup column. To learn about other big donations, see our database of gifts of $1 million or more, which is updated regularly and has data going back to 2000.

Advice and Opinion

How Data Empowers Major-Gift Fundraisers. Experts explain why a data strategy is no longer optional and share real-world examples of how they use data to attract big gifts.

Ibram X. Kendi’s Antiracism Center Is Struggling. Donors Share Some of the Blame. If grant makers want to strengthen the racial-justice movement, they need to admit when things go wrong and ensure that better planning and accountability are in place the next time.

What We’re Reading

What moves young donors? After years of declining participation, this year’s graduating class at Harvard University won’t be asked to contribute to the Senior Gift fund. According to a document obtained by the Harvard Crimson, three days before commencement this May, only 167 seniors had contributed a senior gift — just 8.7 percent of the class of 2023. By contrast, the participation rate was as high as 79 percent in the 1980s.

Senior gift programs have often been touted as a way to build the habit of alumni giving to their alma maters. But a new survey found that young, affluent donors care more about supporting issues than particular organizations, Barron’s reports.

According to the Bank of America Study of Philanthropy, 44.6 percent of donors born in 1981 or later said their charitable giving in 2022 was driven by issues important to them, compared with only 36.1 percent of donors ages 43 and older.

“That’s a big shift over time,” says Una Osili, associate dean for research and international programs at the Lilly Family School. “In 2006, when you asked donors why do they give, it was this idea of supporting organizations that mattered to them — whether those were the universities and colleges they attended or the organizations in their communities.”

What is your organization doing to attract younger donors? Is it working? Email me about what you’re trying and what you’ve learned.