Posts tagged ‘civil society’

April 28, 2020

Warning Signs You Need to Know About

While the nonprofit sector continues to raise massive amounts of money, danger lies ahead for fundraising professionals as the coronavirus health crisis leads us further into an economic calamity.

As the COVID-19 pandemic gained traction, individuals, corporations, and foundations have responded with robust giving. For example, individual giving revenue through direct mail, processed by Merkle RMG, has increased 5.8 percent year-over-year even while the volume of donations dropped by 15.5 percent, according to Merkle RMG’s Impact Report, COVID-19: How the Coronavirus Pandemic is Impacting Direct Mail Fundraising (transactions through April 19, 2020).

The initial philanthropic response to the pandemic is not surprising for those who have experienced major challenges in the past. Giving lags changes in economic conditions. For instance, during the Great Recession (2007-09), we also saw a similar philanthropic pattern with revenue initially increasing while the number of donors declined. The following graph from Target Analytics, a Blackbaud company, illustrates the point:

Now, let me just mention that no one has a crystal ball or time machine. Therefore, no one, including me, can precisely predict what will happen and when it will happen. Nevertheless, we do know that during past crises, we saw that charitable giving fell after an initial surge.

The overall economy has a profound effect on philanthropic giving. We know that overall philanthropy correlates with Gross Domestic Product at the rate of about two percent. Furthermore, historical data shows that individual giving correlates with personal income at the rate of roughly two percent. In other words, when the economy is strong, giving will be strong; when the economy falters, giving will slow.

Because the coronavirus pandemic has caused a major global economic disruption, we can anticipate that this will eventually have a negative effect on philanthropic giving. Consider these warning signs:

As corporations see profits eroded, as foundations see investments decimated, as individuals see personal income slashed, charitable giving will likely decrease. However, there are some mitigating factors in play:

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April 21, 2020

Free Help to Protect Children During a Crisis

Almost every April, I devote one blog post to stopping child sexual abuse. It’s a significant departure from the nonprofit and fundraising topics I typically write about. So, let me tell you why I do it.

First, April is Child Abuse Prevention Month, and I want to support that initiative.

Second, many years ago, I served on a jury that heard a child sex abuse case involving a little boy and his step-grandfather. I’ll spare you the horrifying, nightmarish details. Suffice it to say, we found the step-grandfather guilty. When my jury service was completed, what I had heard continued to haunt me.

Before the trial, I assumed that child molesters and rapists were either priests or trench-coat wearing guys in vans. I also believed that incidents of such abuse were relatively rare. The news media coverage at the time would lead most people to a similar belief. However, during the trial, I learned differently:

  • 1 in 10 children will be sexually abused before turning 18;
  • 1 in 7 girls, and 1 in 25 boys are sexually abused before turning 18;
  • 20 percent of sexually abused children are under age 8;
  • 90 percent of children know their abuser (in other words, the abuser is not a stranger);
  • 50 percent of sexually abused children under the age of 6 were abused by a family member (the younger the child the more likely the abuser is a member of the family).

As I continued to process my jury experience, I researched the organizations that were addressing the issue. As a result, I became closely involved with the work of the Philadelphia Children’s Alliance, a regional child advocacy center. PCA does fantastic work bringing justice and healing to sexually abused children.

I also became acquainted with Darkness to Light®, which provides superb training programs and funds scholarly research related to the issue of child sexual abuse. Now, I want to make you aware of one particular FREE, 30-minute online training that D2L is offering: Protecting Children During a Crisis.

As the D2L website says:

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March 20, 2020

Free Webinar: Get Fundraising Tips in the Time of COVID-19

[GOOD NEWS UPDATE (March 21, 2020): If you attempted to register for my free webinar with the AFP Greater Philadelphia Chapter, you may not have been able to do so as the program was immediately over-subscribed. However, AFP-GPC has increased capacity to accommodate more participants. Please try to register now by clicking here. I apologize for the inconvenience, and thank you for your patience.]

[UPDATE (March 20, 2020): Based on how quickly my free webinar became over-subscribed, I realize that there is a massive need for information about how the coronavirus pandemic is affecting the nonprofit sector and what we can do about it. If your charity or professional association wants to deliver an online training program on this, or any other subject, please contact me. Together, we’ll get through this.]

Join me for a free webinar hosted by the Association of Fundraising Professionals – Greater Philadelphia Chapter and sponsored by Merkle Response Management Group. During the program, I’ll outline 12 ways coronavirus (COVID-19) will affect your nonprofit organization. I’ll also share powerful, practical tips for coping with the current fundraising environment. In addition, you’ll get 10 useful survival tips to keep you, your colleagues, and your loved ones safe during this challenging time.

The webinar is free of charge and open to fundraising professionals and nonprofit managers and senior volunteer leadership everywhere. Here’s what you need to know:

Coronavirus (COVID-19): Ways It Will Affect You and Your Fundraising Efforts

Wednesday, March 25, 2020

1:00 PM – 2:00 PM (EDT)

You’ll Get:

      • Insights about key ways fundraising efforts will be affected by COVID-19.
      • Tips for keeping yourself, colleagues, and loved ones safe.
      • Bonus materials.

Click here to register now.

Each day, you and I are confronted by new information concerning the spread of the coronavirus and the related implications. It’s a lot to keep up with. Yet, we must for ourselves, our loved ones, and our organizations upon which so many depend. We try to stay on top of the story, but it’s an incredibly fluid situation. Then, there are the nagging questions we ask ourselves or the CEO asks or a board member asks, including:

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November 27, 2019

Thanksgiving is about Good Food and So Much More

As Thanksgiving approaches in the United States of America, I want to take a moment to express gratitude and to share with you some holiday insights.

Among the many things and people I am thankful for, I am grateful for you. I value the work you do to make the world a better place. I appreciate the time you invest to read and react to my posts. I thank you for the things you have taught me.

I hope that you and yours enjoy a meaningful Thanksgiving holiday. May you be happy. May you be healthy. May you be safe. May you live a life of ease.

Now, I want to take this opportunity to explode one of the most common myths involving Thanksgiving. Many people believe that the Pilgrims held the first Thanksgiving in 1621. Well, that’s not true. While the Pilgrims did hold a Thanksgiving in 1621, it was definitely not the first such celebration on what would eventually become US soil.

Berkeley Plantation on the James River in what is now Virginia claims to be the home of the first official Thanksgiving which was held in 1619. In 1963, President John F. Kennedy even recognized the Plantation’s claim.

However, there are several even older claims to the first Thanksgiving: In 1610, colonists in Jamestown, Virginia celebrated a Thanksgiving when a ship arrived full of food. In 1607, English colonists and Abnaki Indians observed a Thanksgiving at Maine’s Kennebec River. In 1598, San Elizario, a small community near present-day El Paso, Texas, held a Thanksgiving celebration. In 1565, the Spanish held a day of Thanksgiving in what is now Saint Augustine, Florida. In 1564, a Thanksgiving was held by French Huguenot colonists in present-day Jacksonville, Florida. In 1541, Francisco Vásquez de Coronado and his troops celebrated a Thanksgiving in what is now the Texas panhandle.

While various local communities have held different Thanksgiving celebrations at different times, the first national Thanksgiving in the US was celebrated on the last Thursday of November in 1789 as a result of a proclamation from the country’s first President, George Washington. Here is the text of Washington’s Thanksgiving Proclamation:

By the President of the United States of America, a Proclamation.

Whereas it is the duty of all Nations to acknowledge the providence of Almighty God, to obey his will, to be grateful for his benefits, and humbly to implore his protection and favor– and whereas both Houses of Congress have by their joint Committee requested me to recommend to the People of the United States a day of public thanksgiving and prayer to be observed by acknowledging with grateful hearts the many signal favors of Almighty God especially by affording them an opportunity peaceably to establish a form of government for their safety and happiness.

President George Washington on Mt. Rushmore

Now therefore I do recommend and assign Thursday the 26th day of November next to be devoted by the People of these States to the service of that great and glorious Being, who is the beneficent Author of all the good that was, that is, or that will be– That we may then all unite in rendering unto him our sincere and humble thanks–for his kind care and protection of the People of this Country previous to their becoming a Nation–for the signal and manifold mercies, and the favorable interpositions of his Providence which we experienced in the course and conclusion of the late war–for the great degree of tranquility, union, and plenty, which we have since enjoyed–for the peaceable and rational manner, in which we have been enabled to establish constitutions of government for our safety and happiness, and particularly the national One now lately instituted–for the civil and religious liberty with which we are blessed; and the means we have of acquiring and diffusing useful knowledge; and in general for all the great and various favors which he hath been pleased to confer upon us.

And also, that we may then unite in most humbly offering our prayers and supplications to the great Lord and Ruler of Nations and beseech him to pardon our national and other transgressions– to enable us all, whether in public or private stations, to perform our several and relative duties properly and punctually–to render our national government a blessing to all the people, by constantly being a Government of wise, just, and constitutional laws, discreetly and faithfully executed and obeyed–to protect and guide all Sovereigns and Nations (especially such as have shewn kindness unto us) and to bless them with good government, peace, and concord–To promote the knowledge and practice of true religion and virtue, and the encrease of science among them and us–and generally to grant unto all Mankind such a degree of temporal prosperity as he alone knows to be best.

Given under my hand at the City of New York the third day of October in the year of our Lord 1789.

— Go: Washington”

At the present time, we are experiencing great divisiveness in our society. This Thanksgiving, let’s take a moment to remember Washington’s words and the fact that we are all part of one great nation.

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October 29, 2019

Raise More Money When You Avoid the 7 Deadly Sins of Fundraising

Fundraising success depends on having a good cause. It also requires that fundraisers do things the right way. But, none of that is enough. To successfully raise money, fundraisers must also avoid making costly mistakes, either unknowingly or (and you would never do this, right?) knowingly.

Making mistakes can cause your organization to lose donors and have a difficult time finding new ones. In some cases, one charity’s mistakes can harm the reputation of the entire nonprofit sector causing even innocent organizations to lose support.

Philanthropy researchers have shown us that the more someone trusts a nonprofit organization, the more likely they are to give. Furthermore, the more they trust a charity, the more money they are likely to donate. A report issued by Independent Sector stated:

The public is demanding a greater demonstration of ethical behavior by all of our institutions and leaders ….To the extent the public has doubts about us, we shall be less able to fulfill our public service.”

In short, trust affects both propensity for giving and the amount given. Those who have a high confidence in charities as well as believe in their honesty and ethics give an average annual contribution of about 50 percent more than the amount given by those sharing neither opinion.

You can read more about the research into trust and philanthropy in an article I wrote a number of years ago for the International Journal of Nonprofit and Voluntary Sector Marketing.

For the Association of Fundraising Professionals Ethics Awareness Month,  I wrote a feature article for the October issue of Advancing Philanthropy magazine: “Ethics, Fundraising, and Leadership: Avoid the Seven Deadly Sins of Fundraising.” As I pointed out:

You’re a good person. At the very least, you try to be a good person.

However, that’s not good enough. Effective fundraising demands more of us. Every action we take, no matter how small or large, has the potential to build or erode public trust, which could have a corresponding impact on philanthropic support.

Among other things, being a fundraising professional means you must always strive for excellence while avoiding missteps that could have costly consequences for you and/or your organization. Fortunately, you do not have to endure risky mistakes to learn from them. Instead, thanks to media headlines, you can learn from the mistakes of others.”

In the AFP article, I discuss seven missteps made by real charities. While there are certainly more than seven deadly fundraising sins, my article highlights common issues of concern. For example, conflicts of interest was rated among the top ethical concerns of fundraisers, according to a recent AFP survey. In my article, I explore this issue citing a real-world example:

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September 13, 2019

An 11-Year-Old Boy Responds to Gun Violence

While the most recent data show that the number of gun-related murders remains well below the 1993 peak, gun violence continues to be a serious problem in the USA, a Pew Research Center report reveals. Over the past several years, as the number of murders has been trending back upward, so have the number of mass shootings.

Ruben Martinez

One such recent mass attack happened in El Paso, Texas where 22 people were killed and dozens wounded. A grand jury formally indicted the suspect on September 12. However, well before the indictments were handed down, just one day after the massacre, Ruben Martinez went into action. With a philanthropic heart, the 11-year-old created and launched the “#ElPasoChallenge.”

Martinez is asking people to commit 22 good deeds, one for each of the deceased victims. He says that acts of kindness can include things such as “mowing someone’s lawn, visiting a nursing home, donating for families in need, taking flowers to the hospital, or writing a letter to someone telling them how great they are.”

Rose Gandarilla tweeted about her son’s #ElPasoChallenge:

https://platform.twitter.com/widgets.js

Gandarilla told CNN why her son developed the #ElPasoChallenge:

He was having some trouble dealing with what happened. I explained to him that we could not live in fear and that people in our community are caring and loving. I told him to try and think of something he could do to make El Paso a little better.”

To consider his mom’s suggestion, Martinez went to his room, brainstormed some ideas, and settled on the #ElPasoChallenge. He also came up with an idea for his first act of kindness. He told his mom that he wanted to pick up and deliver dinner to the first responders who were still at the crime scene. That’s exactly what they did.

Martinez’s mom said, “He seems to be doing better and says that hopefully, the world will be a better place with all these random acts of kindness.”

The word “philanthropy” means love of humankind. Ruben Martinez is a true philanthropist.

Philanthropy is a learned behavior. Thanks to good parenting, Martinez learned some valuable lessons:

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July 12, 2019

Do Not Fall for Newsweek’s Fake News!

You might have seen it recently. Sophie Penney, PhD, President of i5 Fundraising, saw it and then asked me what I thought. So, thank you for the question, Sophie; here goes…

Newsweek posted an article with this headline: “Trump Tax Plan Leads to $54 Billion Decline in Charitable Giving.”

There’s only one problem: IT IS NOT TRUE!

Shockingly, not even the body of the article supports the headline. Instead, the writer talks briefly about a $54 billion drop in itemized donations NOT a $54 billion drop in giving. This does NOT mean there was a $54 billion drop in actual giving. With fewer people itemizing their taxes, of course there would be fewer itemized donations. However, that does not mean fewer donations. Many donors will continue to give and continue to give generously despite not being able to itemize. By the way, the writer provided no source for the $54 billion figure.

The article furthers its doom-and-gloom theme by asserting that there was a 1.7 percent decline in overall charitable giving. However, the writer did not mention that that figure was for inflation-adjusted dollars. In real dollars, giving actually went up $2.97 billion (0.7 percent) between 2017 and 2018, and now stands at $427.71 billion, the highest level of all time, according to Giving USA 2019. Even if we look at inflation-adjusted dollars, giving in 2018 was the second highest in recorded history. Not bad.

If we want to understand the current philanthropy environment, we need to have an honest conversation using real information. In a previous post, I identified several factors affecting charitable giving:

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June 20, 2019

I Told You So: Charitable Giving is Up!

Most charity pundits, mainstream media, and press serving the nonprofit sector got it wrong. Sadly, none of them is admitting their mistake, and many are continuing to advance a false narrative. However, I always told you the truth, and I’ll continue to do so.

I’ve often encouraged you not to overuse statistics in your appeals. But, we can all certainly benefit from reading lots of illuminating statistics.

In 2017 and 2018, most pundits and the media were convinced that the Tax Cut and Jobs Act would result in up to a $21 billion decrease in philanthropic giving. In January 2018, I joined a tiny group of professionals who predicted the decrease in giving would be far less than that and giving might actually increase. This was not a guess on our part, but a well-educated expectation based on research, experience, and observation.

Now, with the release of Giving USA 2019, we know who was correct.

Overall, philanthropic giving in constant dollars INCREASED by $2.97 billion (0.7 percent) between 2017 and 2018, and now stands at $427.71 billion, the highest level of all time. Relative to Gross Domestic Product, giving remained at 2.1 percent, which is greater than the 40-year average of 2.0 percent.

Despite the generally good news, the philanthropy scene is not entirely positive. When adjusting for inflation, giving in 2018 did decline by 1.7 percent, though that was much less than the doom and gloom estimates. Furthermore, giving by individuals as a share of overall philanthropy accounted for 68 percent; this is the first time since at least 1954 that it has fallen below 70 percent. In 2018, individual giving fell by 1.1 percent in constant dollars.

While the new tax code likely had an effect on charitable giving, we need to be careful not to overstate its impact. A number of factors have influenced giving:

New Tax Code. All or part of the decline in individual giving in 2018 could be due to donors taking action in advance of the tax law change. We saw this in 1986 when there was a spike in charitable giving in advance of the Reagan tax cuts in 1987.

In 2017, many donors likely front-loaded their philanthropic giving since they would no longer be able to deduct gifts beginning in 2018. In addition, many donors chose to bundle their philanthropy by contributing to Donor-Advised Funds at record levels in 2017. Together, these two factors might explain the 1.1 percent decrease in individual giving in 2018 compared to a 5.7 percent increase in 2017. If not for the new tax rules going into effect in 2018, some of those 2017 donations might have been made in 2018 instead.

The tax code might also affect giving in other ways that we just don’t see clearly at this point. Just as we had to wait until 1988 to see giving normalize following the Reagan tax cuts, we may need to wait another year or two to understand the full effect of the current tax code.

Decline in the Number of Donors. Since 2001, the percentage of US households contributing to charity has fallen steadily from a high of 67.63 percent to 55.51 percent in 2014, according to data from the Indiana University Lilly Family School of Philanthropy’s Philanthropy Panel Study. In other words, the new tax code is not responsible for a sudden decline in the number of donors. This trend has been going on for years.

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April 17, 2019

How Generous is the Charitable Giving of Presidential Candidates?

While I applaud anyone who donates money and/or time to charities, some deserve more applause than others do. Since the presidential campaign season has begun, and with federal tax returns due earlier this week, The Washington Post has reviewed the charitable giving of the 2020 presidential candidates who have released their federal tax returns so far.

Here is what we know from the most recently released tax returns (with candidates and their spouses ranked from least to most generous as a percentage of Adjusted Gross Income):

Beto O’Rourke donated $1,166, 0.3 percent of AGI.

Kamala Harris donated $27,259, 1.4 percent of AGI.

Kirsten Gillibrand donated $3,750, 1.75 percent of AGI.

Amy Klobuchar donated $6,602, 1.85 percent of AGI.

Bernie Sanders donated $18,950, 3.4 percent of AGI.

Jay Inslee donated $8,295, 4.0 percent of AGI.

Elizabeth Warren donated $50,128, 5.5 percent of AGI.

For perspective, here is some information about past presidential candidates:

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January 11, 2019

Was the Trump Foundation the Only Funder on Santa’s Naughty List?

As you struggled to raise more money at the close of 2018 while carving out holiday time with loved ones, you might have missed an important news story.

On Dec. 18, news reports announced that the New York Attorney General’s Office and the Trump Foundation had reached an agreement to dissolve the Foundation. Under the terms of the deal, the NY Attorney General will distribute the Foundation’s remaining assets to charities.

Donald Trump

However, the closing of the Trump Foundation does not end the matter. Barbara Underwood, the NY Attorney General, says the state still seeks $2.8 million in restitution, plus additional penalties.

Furthermore, the Attorney General is asking the court to bar Donald Trump from serving with nonprofit organizations in New York for 10 years. The state’s lawsuit also calls for a one-year ban for three of Trump’s children — Don Jr., Ivanka, and Eric — all of whom were Trump Foundation board members.

The State of New York “lawsuit says that Trump’s charitable organization, which he founded in 1987, engaged in ‘persistently illegal conduct’ and that Trump basically used the Foundation as a slush fund to promote his business and political campaign,” according to a report in Vox.

This news item is inherently important. It involves a charitable foundation with significant assets that appears to have acted far less than charitably. It also involves the President of the United States. However, the significance of this story does not end there.

If the NY Attorney General is correct about the alleged misdeeds of the Trump Foundation, dissolution of the Foundation and a temporary prohibition of Trump family members from serving with NY charities for a limited time seem like an insignificant punishment. Unless serious penalties are levied against Donald Trump and his family members who were involved, the Trumps alleged criminal behavior will go unpunished. Furthermore, they will remain free to create and/or serve with nonprofit organizations outside of the State of New York. Other than a bit of bad press, the Trumps will pay little for their behavior.

The problem does not end there. Failure to hold the Trumps personally liable not only fails to punish the Trump family, it sends a signal to anyone interested in using a charitable foundation for personal benefit. That signal is that there is little downside for misbehavior. In other words, there will be little to no deterrent effect unless severe penalties are imposed by the court, assuming the allegations are proven true.

The other thing we need to understand about the Trump Foundation story is that it is not an isolated situation. A decade into my fundraising career, the nonprofit sector was rocked by the scandal surrounding the Foundation for New Era Philanthropy. Operating from 1989 to 1995, the Foundation raised over $500 million in an elaborate Ponzi Scheme that defrauded well known charities and experienced philanthropists out of millions.

That wasn’t the first funder scandal, and it certainly wasn’t the last. Let’s face it. The Trump Foundation is not the only funder on Santa’s naughty list.

As another report in Vox observed, “There are some 86,000 foundations in the United States, with total assets of around $890 billion. And the vast majority of them never face this kind of scrutiny.”

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