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From: Stacy Palmer
Subject: Danger of Losing Small Donors in Recession; Gates to Prioritize Math Education
This week we saw another ominous economic warning sign for nonprofits: A new report shows that charities are losing small-dollar donors at a fast clip. That matters because those are the very people who typically help nonprofits weather recessions,
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This week we saw another ominous economic warning sign for nonprofits: A new report shows that charities are losing small-dollar donors at a fast clip. That matters because those are the very people who typically help nonprofits weather recessions, experts told Drew Lindsay.
The number of people making contributions of $100 or less dropped more than 17 percent in the first half of the year, and 8 percent fewer donors made gifts of $101 to $500.
“That’s an indicator as a sector that we’re not ready for a recession,” says Woodrow Rosenbaum, chief data officer at GivingTuesday and one of the report’s researchers. Studies indicates wealthy donors curtail giving in response to bad economic times, so that’s why small donors become especially important, Rosenbaum says.
The report is the latest evidence that weakening support for charities — a trend for more than a decade — continues. Although 2020 saw a pandemic-sparked uptick in giving and new donors in 2020, the number of individuals giving to charity has now shrunk for five straight quarters, according to the report.
Researchers are particularly worried about donor-retention rates. The number of people who made a gift last year and again this year declined 4.2 percent — this after a 7.2 percent decline in 2021.
“The bottom is falling out, and we’re heading for a big problem if we don’t address that,” Rosenbaum said.
The extraordinary economic situation in the United States muted even good news from the report. Dollars donated to charity grew by 6.2 percent in the first half of the year, but that failed to keep pace with the country’s 8.5 percent inflation rate.
Still, Rosenbaum told Drew that organizations would be wise to use the last few months of the year to double down on engagement and broad stewardship of everyday donors. “There’s lots of room to move and lots of opportunity to turn things around.”
Rosenbaum’s organization, GivingTuesday, will get a special opportunity; On Tuesday the Bill & Melinda Gates Foundation said it was awarding the organization $10 million to strengthen its work.
Let us help you improve your fundraising: Join us on Thursday for a webinar that will walk you through the best ways to get everyone in your organization involved in attracting donations. Sign up now.
Here’s what else you need to know:
The $1.1 billion effort comes after the pandemic “wreaked havoc” on education and widened the gap between Black and white achievement, Gates’s Bob Hughes told Alex Daniels, especially in math.
Meanwhile, funding for reading, writing, and the arts and to advance social and emotional learning will stop once their current grants run out, but the hope is that others, such as the Charles and Lynn Schusterman Family Philanthropies, will pick up the slack.
The new effort follows Gates’s previous attempts to improve education — the “common core,” which set goals for students at each grade level but was said to be too rigid, and a more flexible attempt that created networks of schools with similar challenges to test teaching and coursework innovations.
Said Hughes: “Too many students don’t have access to math instruction in classrooms where they receive critical resources to help them see the joy in learning math and believe that they can become math people as they grow older.”
The grassroots efforts are seen as supplemental to law enforcement and recognize people’s innate goodness and the trauma they’ve experienced, reports Drew Lindsay. Nevertheless, they are dangerous and expensive, and successes have been slow and incremental.
Outreach workers — often former gang members and ex-offenders, such as Dantrell Jelks (above) — recruit people to the program and work to mediate disputes and negotiate gang truces in high-crime neighborhoods, trying to persuade people to change their lives through education, job training, and counseling. Therapists and mentors help them work through their trauma.
A group called Chicago CRED (Create Real Economic Destiny), started by former education secretary Arne Duncan and supported by the likes of Laurene Powell Jobs, has worked with 1,000 people since 2016, spending more than $30,000 a year per participant. Hundreds of them now have good jobs and are half as likely to be shot or rearrested than if they had not been in the program. But a couple dozen participants and alumni have been shot and killed, and burnout among workers is common because they refuse to take breaks.
Says Kelly Carroll, a former CRED clinician: “Everyone in this work is writing their own redemption narrative. Everyone feels like they’ve caused harm in some way, and they want to make up for that.”
Despite the Biden administration’s laudable efforts to improve nutrition among people most likely to have poor diets that result in diabetes, heart disease, and cancer, more needs to be done, and foundations can help.
“If the nation is serious about making public health a priority, then government, philanthropic, and business leaders need to commit more resources to growing, distributing, selling, and encouraging the consumption of a lot more vegetables, fruit, and beans — and discouraging the over-consumption of highly processed, sugary products,” writes Nancy Roman, CEO of the Partnership for a Healthier America.
The food industry has very tight margins, and when funding for food programs dries up, there is little left to build on. But foundations can support market research to share with food retailers, forge partnerships among groups to change people’s eating habits, and pay for new approaches to reach consumers who can’t afford or can’t access fresh produce.
Writes Roman: “Rather than simply throwing food at the problem, grant makers need to focus more on testing new approaches, collecting data, learning about what works, and sharing the knowledge.”
In an essay for the Chronicle, Lisa Pilar Cowan writes about the quandary she faces when grantees gush with appreciation for a grant they received from her organization, the Robert Sterling Clark Foundation.
“When I make grants from the foundation, I am just doing my job,” she writes. “I don’t write thank-you notes to my bank teller or librarian — bank tellers are not giving me their own money and librarians are not lending me their own books — so I wonder if a foundation program officer should be treated any differently.
Farewell, and Thank You
We learned on Friday that the Chronicle’s longtime columnist Pablo Eisenberg died at age 90. Eisenberg was a much admired social-justice advocate, and his Chronicle articles included fierce critiques of foundations and nonprofits, a dose of investigative journalism, and insightful tributes to the men and women who shaped philanthropy in recent decades. Stacy worked closely with Eisenberg for many years and shares some highlights of his life and some of her favorite essays — many of which were written years ago but spotlight issues we’re all grappling with today. We miss his voice already.
More News, Advice, and Opinion
Big PhilanthropyThe group, which lost membership during Covid, plans to support volunteers and staff, make camp properties more resistant to climate change, improve science and technology education for youth members, and develop diversity and inclusion programming to make troops more accessible.
Women Donors Are Stepping Up — and Nonprofits Need to Tailor Their Approaches to Reach Them, Says Longtime LeaderThe CEO of the Women Donors Network says women want to give not just money but also time and expertise.
Foundation GivingCommunity foundations and other grant makers saw during Covid and the racial reckoning that Latinos were often failing to get a share of government or banking aid to build their businesses. Now they are trying to turn things around.
Grants RoundupAlso, the Bill & Melinda Gates Foundation donated $1.2 billion to end polio worldwide by 2026, and Bank of America gave $24 million for economic development in communities of color.
TransitionsAlso, the William R. Kenan Jr. Charitable Trust has chosen its next leader, and the Doris Duke Charitable Foundation tapped a new chief program officer.
PodcastThe author of “The Sum of Us: What Racism Costs Everyone and How We Can Prosper Together” discusses how racial inequality cuts across the issues that donors care about.
Inventor of the UV Coating on Sunglasses Gave $100 Million to U. of Florida Scripps Biomedical ResearchPlus, Jackie and Mike Bezos gave $710 million to Fred Hutch Cancer Center, and Massachusetts General Hospital got $50 million to expand sickle cell disease research and to support other programs.
FundraisingOnly about 20 percent of the words study participants used when asked about these requests to give were positive.
WHAT WE’RE READING ELSEWHERE
Hedge fund managers are using a maneuver that gets them a charitable tax deduction while keeping control of the money that tax law deems a contribution. (Bloomberg)
After cuts to budgets and staff during the pandemic, major museums across the United States are pushing forward with ambitious expansions. (New York Times)
Swiss billionaire Hansjörg Wyss is donating $350 million to the research institute at Harvard University that bears his name. (Boston Globe)
A former Black employee of Planned Parenthood is suing the organization, claiming racial discrimination. (New York Times)
The Bill & Melinda Gates Foundation will put another $1.2 billion into the global effort to wipe out polio. (Bloomberg)
A new nonprofit is helping small donors support the nascent field of carbon-dioxide removal, until now the domain primarily of Big Tech. (Protocol)
NEW GRANT OPPORTUNITIES
Your Chronicle subscription includes free access to GrantStation’s database of grant opportunities.
Democracy and environment. The Park Foundation supports nonprofits whose focus is democracy, civic participation, media, the environment, or animal welfare. Letters of inquiry are accepted any time and full proposals are reviewed quarterly. The upcoming deadline for full proposals is January 6.
Running. The Saucony Run for Good Foundation supports programs that help prevent and reduce childhood obesity. Grants of up to $10,000 are provided to groups that initiate and support running programs for kids 18 years of age and younger. Supported programs should serve youths not traditionally exposed to running programs. Grant requests are reviewed twice a year; the next deadline is December 15.