Fundraising Update

Welcome to Fundraising Update. This week, we look at the blockbuster GivingTuesday, which raised $3.6 billion, up 16 percent from last year. Plus, we dip deep into a funding crisis that’s causing some nonprofits to downsize or shutter completely.

I’m Jie Jenny Zou, fundraising reporter at the Chronicle of Philanthropy. If you have ideas, comments, or questions about this newsletter, please write me.

Thanks to our sponsor Kellogg School Center for Nonprofit Management for supporting Fundraising Update.

Donors Show Up Big for GivingTuesday

In an election year when voters expressed concerns about the economy, some nonprofits worried that donations might be down. But donors gave $3.6 billion on GivingTuesday, a 16 percent increase over last year.

While the economy was on Americans’ minds in pre-GivingTuesday data, that didn’t seem to impact their giving. In a survey in September by Wells Fargo, 51 percent of respondents said “they don’t have enough money to give to charity at all.” Instead of tightening their purse strings, Americans opened them a little bit wider.

The economy isn’t the most important factor driving GivingTuesday results, GivingTuesday CEO Asha Curran told the Chronicle before the final numbers were in. Donors, she said, give when they’re connected to causes. “The main factor in a successful GivingTuesday, a successful end of the year, is on the side of nonprofits,” she said. “If nonprofits activate, we will see more donations on GivingTuesday and through the rest of December. And if they sit it out, then we won’t.”

And it’s clear from the numbers that nonprofits activated this year. “In a world that can feel increasingly divided, we’re seeing people unite through simple acts of kindness that have profound ripple effects,” Curran said in the news release that announced the final giving tallies for the day.

According to GivingTuesday, 36.1 million Americans participated in the day, a 7 percent increase from 2023.

Since its start in 2012, GivingTuesday has become a critical day for charities, often kicking off their year-end giving drives. This year nonprofits appealed to donors hoping to leave the election behind them, joined forces with other charities, and focused on activities that brought the community together.

American Red Cross

At the end of a contentious election year, many nonprofits focused their GivingTuesday pushes on bringing people back together.

“People are weary after the election,” Curran said, noting that several charities she talked to were trying to use GivingTuesday as “a moment for a fractured citizenry to feel like they are coming together around what unifies us rather than what divides us.”

The Center for Human Services in Modesto, Calif., is one of the charities that leaned into the idea of giving donors a chance to coalesce around something positive.

“My personal opinion is people feel inundated right now,” says Shanyn Avila, development manager at the group. “How can we offer a place of respite for people? I always feel better when I’m helping someone. So if we can offer such a way to do that, if we can support people in a gentle way, this is what we want to do.”

The group had a $5,000 goal and wanted to use the day to engage with their donors, sharing the good that the organization does, like the ability to adopt a family and support them during the holidays.

For more on GivingTuesday, read the entire story.

Need to Know

“We’re absolutely seeing more challenges for the nonprofit sector around financial distress, and the financial sustainability of organizations, along with a rising demand for services.”

— Nonoko Sato, executive director of the Minnesota Council of Nonprofits

With revenues down and costs rising, a growing number of nonprofits are cutting budgets, laying off staff, and even closing their doors, writes my colleague Jim Rendon.

In the case of Bread for the City, CEO George Jones knew that his organization was going to have a budget shortfall at the end of its fiscal year in June. But he was confident that it would be small and the group would be fine. Then it became clear that several big foundation grants the 50-year-old organization was expecting would not come through.

One grant maker who gave the group $1 million the previous year renewed its grant for only $200,000. Then city grants Jones counted on didn’t materialize. The organization, which provides food, medical and dental services, and other assistance to people in need in Washington, D.C., found itself $4 million short of its $23 million annual budget.

Jones knew the organization needed to take more drastic measures. It had enough reserves to cover the shortfall but not enough to cover it for multiple years. It spends about $2 million a month, but its revenue stream is inconsistent. Some months it might bring in a few hundred thousand dollars, and others several million. About 40 percent of the money comes in December.

This summer, the organization laid off 20 of its 140 employees.

Bread for the City isn’t alone. Organizations across the country are facing dire financial straits that have led to hiring freezes, program cuts, layoffs, and in some cases, closures. The examples cut across geography and cause area. Two other nonprofits that provide food to low-income Washington, D.C., residents laid off staff this year. The voting-rights group Fair Fight laid off 75 percent of its staff in January. Museums in cities across the country have laid off employees. Big Brothers Big Sisters of the Mid-South in Memphis closed last year. Centro Latino, a 20-year-old Iowa group that aided immigrants, closed in October.

The financial picture can shift quickly with little warning, leaving nonprofits too little time to raise the funds they need. In a survey in Minnesota, 79 percent of nonprofits said they expected to experience financial distress in the next 12 months, up from 47 percent in 2022. In a survey of New York nonprofits, 62 percent of organizations said they’re concerned about funding basic operations, up from 50 percent in 2023. For a quarter of groups, finances are so bad they are considering reducing services. With the Trump administration set to take office in January, nonprofits face additional uncertainty in the volume of urgent needs they may have to meet, possible changes to laws and regulations, and the potential loss of government funding for important services.

For more, read the full story here.

Plus …

Buffett Continues Thanksgiving Tradition With $1.2 Billion to His Kids’ Foundations. By pouring huge sums into his family’s foundations, Warren Buffett shows trust in his three children to give away his $151 billion fortune, writes my colleague Maria Di Mento.

Warren Buffett is giving huge gifts to his family foundation and the foundations of his three children, something the famous financier has done every Thanksgiving for the past three years. On Monday, Buffett announced he is donating stock valued at nearly $1.2 billion to the grant makers.

The billionaire investor said in a news release that he gave 1.5 million shares of Berkshire Hathaway Class B stock to the Susan Thompson Buffett Foundation, named for his first wife, and 300,000 shares apiece to the Sherwood Foundation, the Howard G. Buffett Foundation, and NoVo Foundation, his children’s grant makers. Those transfers of stock mean the Susan Thompson Buffett Foundation received nearly $716.2 million, while his children’s foundations got $143.2 million each.

For more on the Buffett family, read the entire story.

Gift of the Week

Financier Michele Kang has pledged $30 million for women’s and girls’ programming to U.S. Soccer, doubling the nonprofit’s number of national team camps. The donation will also allow the organization to expand its recruiting efforts and fund professional development programs for women players, coaches, and referees.

Kang is the founder of Cognosante, a medical-technology company, and owner of three professional women’s soccer teams: the Washington Spirit, Olympique Lyonnais Féminin, and London City Lionesses. She is also a part owner of the Baltimore Orioles baseball team.

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

Should Nonprofits Cite the Election in Year-End Appeals? Experts Say: It Depends. Nonprofits may want to mention the election if it affects their work, but fundraising consultants say it doesn’t make sense for other groups to change year-end messaging.

For Philanthropy, This Actually Isn’t 2016 All Over Again (Opinion). Funders may be more prepared to figure out their post-election game plan than they realize.

What We’re Reading

A Thanksgiving Football Game Brought in a Record $650,000 for Charities.

A beloved holiday tradition in Hinckley, Ohio, has raised a record $650,000 for charities this year. It shows the power of having active, committed volunteers fundraising for nonprofits. Preparation for the Meadows Turkey Bowl — a Thanksgiving football game — has become a year-round affair, with local companies and participants soliciting individual and corporate gifts.

Mike Meadows, a family member who supports the event and runs a business called 1st Day School Supplies, says he got everyone involved to support the event. “On Fridays, we stopped what we did as a company and we personally raised money from family and friends, vendors, customers, and then we were ambassadors to donors from the past,” Meadows said.

Over the year, volunteers made 7,000 calls to raise money. This year’s efforts will help fund a $300,000 partnership between the University of California-San Francisco and the Cleveland Clinic. Since 2020, the family behind the fundraiser has committed a share of the gifts for medical research after a family member was diagnosed with Oligodendroglioma, a rare form of brain cancer. (Cleveland.com).