Posts tagged ‘The Chronicle of Philanthropy’

March 10, 2017

In the News…

Over the past few months, I’ve been able to share my views about philanthropy with media outlets beyond my own blog. This will continue in the coming months. To make sure you don’t miss anything, I thought I’d share some highlights with you.

MarketWatch:

As 2016 drew to a close, MarketWatch interviewed me. In the article, I addressed the issue of philanthropy in the Trump Era and shared my optimistic prediction for philanthropic growth in 2017. You can read my detailed thoughts on these subjects in my following posts:

The Non-Profit Fundraising Digest:

At the start of the year, I was honored to be included on the list of “The Best Fundraising Blogs of 2017” published by The Non-Profit Fundraising Digest. Here’s what the Digest has to say:

There are thousands of blogs and websites out there dealing with non-profit fundraising. Every week, I get e-mails about new fundraising sites run by consultants, non-profits, universities, companies and trade associations.  It can be hard for fundraisers to keep up, and difficult to know which sites are worth reading on a regular basis.

Our goal here at The Non-Profit Fundraising Digest is to make sure that you have all of the information you need to successfully raise funds for your non-profit. As part of that mission, we are proud to present our list of the best fundraising blogs of 2017.  Each of these blogs and websites were handpicked by our editors because they are sites we trust… run by people we trust… and each is chock full of fundraising strategy, tactics and tips that you can use at your organization.”

The front page of the Digest is updated daily to provide links to a variety of must-read articles. It’s a terrific resource to help nonprofit manager and fundraising professionals easily find information that is relevant and useful. You can find the front page by clicking here.

Bloomerang:

The Non-Profit Fundraising Digest was not the only site to take notice of my blog at the start of the year. The good folks at Bloomerang included my blog on its list of “100+ Fundraising Blogs You Should Be Reading in 2017.” Here’s what Bloomerang says:

Keeping up with every quality piece of content published by and for fundraisers on the web every day would be a full time job in and of itself. There’s absolutely no way you could read it all.

While there are many very well-known speakers and writers who boast tens of thousands of daily readers and followers, we wanted to highlight some lesser-known hidden gems – as well as some long-established publishers – that may change the way you think about and perform your job.”

Productive Fundraising with Chad Barger, CFRE:

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December 8, 2015

Special Report: You Read about It Here First

[Publisher’s Note: “Special Reports” are posted from time-to-time as a benefit for subscribers and frequent visitors to this blog. “Special Reports” are not widely promoted. To be notified of all new posts, including “Special Reports,” please take a moment to subscribe in the right-hand column. New subscribers will also receive a free e-book from researcher Dr. Russell James.]

 

At Michael Rosen Says…, I strive to introduce you to exceptional people with something valuable to offer fundraising professionals and nonprofit managers. I also endeavor to share useful tips and provocative opinions with you. From time-to-time, other media outlets take notice. Here are two recent examples:

Isabelle Clérié, Country Director, EGI in Haiti

I introduced you to Isabelle Clérié, a young fundraising professional. At the time, Isabelle was working in the U.S. She has since returned to her native Haiti where she is now Country Director for EGI, an NGO working to combat poverty by assisting and training emerging entrepreneurs.

Isabelle Clérié, Country Director, EGI in Haiti

Isabelle Clérié, Country Director, EGI in Haiti

Isabelle wrote a guest blog post which I published nearly four years ago: “Haiti: A Young Professional’s Compelling Lessons for All Nonprofits.”

The post focused on relief efforts following the 2010 earthquake in Haiti. In addition to providing some interesting insights into the relief efforts, Isabelle shares some valuable tips that can make any charity more effective.

Now, Forbes has discovered Isabelle and has highlighted her work in Haiti in a recent report: “Three Social Entrepreneurs Driving Growth And Change In Haiti.”

I congratulate Isabelle on the much-deserved public recognition she has received, and I applaud EGI for making a difference in Haiti.

I encourage you to read Isabelle’s post and the article in Forbes.

#GivingTuesday

My regular readers know that while I like the idea of #GivingTuesday, I have not been impressed with the results. In fact, I actually have some serious concerns about the occasion.

Recently, The Chronicle of Philanthropy interviewed me for the article “Giving Tuesday? More Like Gimmick Tuesday, Some Small Nonprofits Say.” This gave me the opportunity to once again share my thoughts on the subject. You can download the article and read what I had to say.

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November 20, 2015

Stop Ignoring This Amazing Source of Contributions

There is a funding source that donated $12.5 billion to charities last year. Sadly, most nonprofit organizations ignore this massive opportunity for support with only 23 percent saying they are “very familiar” with how this funding source works, according to a report from Vanguard Charitable.

I’m speaking of Donor Advised Funds.

Pile of Cash by Pictures of Money via FlickrDonors create a DAF by opening an account with charitable organization equipped to manage it. Donors then make irrevocable donations of cash or appreciated assets to their DAF account to receive current year tax benefits and deductions. Donors can choose how their contributions are invested creating the potential for tax-free growth that can fund larger charitable grants. Donors “advise” when and how much to grant and to which organizations.

Unfortunately, many fundraising professionals overlook DAFs. They think DAF donations will either automatically come in or won’t. Some fundraising professionals simply complain about how much money is going into DAFs rather than to charities.

I think there are five myths about DAFs that we need to debunk before we review how you can secure DAF grants for your charity:

Myth 1: DAFs don’t generate enough total contributions to deserve attention.

In 2014, DAFs contributed $12.5 billion to charities, a 27 percent increase over 2013, according to a report issued by The National Philanthropic Trust. That’s 3.5 percent of all charitable giving in 2014!

Myth 2: DAFs might give a lot of money, but there are not that many of them.

The reality is that 238,293 DAF accounts existed in 2014. While some donors have created multiple accounts, the number of DAF donors is nevertheless large and growing. To put this into some perspective, there were just 107,000 Charitable Trusts created in 2014.

Myth 3: The average DAF does not contribute very much money.

The average size of each DAF account grew from $260,626 in 2013 to $296,701 in 2014. DAFs had a payout rate of 21.9 percent. This is much higher than the five percent payout rate required of private foundations.

Vanguard Charitable, one of the largest DAF managers, reports accounts valued at $100,000 or more granted an average of $13,841 while accounts valued at less than $100,000 granted an average of $3,422.

Fidelity Charitable, the country’s largest DAF manager, reports its average DAF account granted $4,138 and the average account made 8.3 grants in 2014.

Myth 4: DAF granters prefer to remain anonymous.

Vanguard Charitable reports that 95 percent of its grantmakers share their name with the charities they support. Schwab Charitable, another large DAF management organization, says that 97 percent of its grantmakers share their name. Fidelity Charitable reports that 92 percent of its grantmakers provide information for nonprofit acknowledgment. This means that charities are able to continue to cultivate and steward these donors.

Myth 5: DAFs can be ignored as a passing fad.

DAFs have been around for 84 years. Following the creation of the Fidelity Charitable Gift Fund in 1991, DAFs really began to gain popularity. In 2014, DAFs held $70.7 billion in assets, an increase of nearly 24 percent compared with the previous year. DAFs are not a fad; they are a growing form of philanthropy for those interested in endowed giving but who do not have the resources or interest in establishing a private foundation.

So, what can you do to dive into the DAF pool? Here are six tips:

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August 27, 2015

Is the Facebook “Donate Now” Button: Dumb or Helpful?

Facebook has unveiled a new option that could benefit the nonprofit sector:

We are excited to introduce a new ‘Donate Now’ call-to-action option on both link ads and Pages. Now, it’s easier than ever for nonprofits to connect with people who care about their causes and encourage them to contribute through the website of their choice.”

Many in the media were quick to applaud the move by Facebook:

“This is definitely a valuable tool for nonprofits…” — TechCrunch

“This new Facebook feature is hard not to like.” — Huffpost Impact

“…nonprofits won’t be complaining now that they have easier access to a billion and a half potential donors.” — Mashable

“Charities welcome Facebook decision to let them use ‘donate now’ buttons.” — Third Sector

However, not everyone greeted the announcement with great enthusiasm.

Steven Shattuck, Vice President of Marketing at Bloomerang, outlined his issues with this new feature in his post “The Facebook Page Donate Now Button Is Dumb and I Hate It”:

In my mind, this button is problematic for two reasons: 1) This is an obvious ploy by Facebook to get you to buy ads … 2) There is no organic path to the donate button that makes any logical sense or has any basis in reality…. I don’t buy it. It’s the equivalent of a coffee shop putting their tip jar outside and around the corner.”

Non-Profits on FacebookHere is how Facebook designed the “Donate Now” button to work. A nonprofit organization can put the button on its Facebook page and in its ads. People who click on the button will first see a Facebook disclaimer box and then be taken to the organization’s own donation page.

Shattuck writes, “So should you set up the button? Probably. There’s really no downside per se and the whole process takes less than a minute.”

While there might not be a downside to the “Donate Now” button on Facebook, is there an upside as some have suggested or is Shattuck right to think the button is “dumb”?

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May 25, 2015

Discover 5 of the Latest Trends Affecting Your Fundraising

Leading up to the 2015 Association of Fundraising Professionals International Fundraising Conference, a number of my readers contacted me to request that I gather information about emerging fundraising trends. (Yes, I take requests, so feel free to make one.)

It’s not surprising that development professionals understand the need to stay on top of the evolution that takes place in the world of philanthropy. After all, as Benjamin Disraeli has said:

Change is inevitable. Change is constant.”

Recognizing that ongoing change is part of our life is one thing. Understanding what that change means and how to capitalize on it can help even good fundraisers become stars. As John F. Kennedy has stated:

Change is the law of life. And those who look only to the past or present are certain to miss the future.”

None of us wants to miss the future.

So, with that thought in mind, I attended the session “Latest Trends in Giving and What They Mean for Your Organization” with presenters Stacy Palmer, Editor of The Chronicle of Philanthropy, and Jeff Wilklow, Vice President of Campbell & Company. Here are five of the key trends they cited:

Mega-Donors:

Among very wealthy, very generous philanthropists, much of their giving does not go directly to existing charitable organizations. While their philanthropy will eventually find its way to charitable purposes, it will first be funneled through special funds or foundations that the mega-donors create or contribute to.

Money by 401(K) 2012 via FlickrMany of those who earned their fortunes through entrepreneurialism will gravitate toward entrepreneurial philanthropy. This is particularly true with younger technology entrepreneurs. With a do-it-yourself attitude, these individuals may choose to create a charity or socially-responsible business rather than donate to an existing, mainstream nonprofit organization.

In any case, big donors are interested in funding big ideas. They’re interested in big solutions to big problems. To attract the support of mega-donors, your charity will need to focus on creative solutions for large challenges.

Legacy Donors:

Many charitable organizations embrace the idea that planned giving equals endowment building. For example, many charities have adopted policies that direct bequest revenue into the organization’s endowment fund unless otherwise designated by donors.

While your organization might have a bias in favor of building endowment revenue, donors have a keen interest in their own legacy. Donors want to make a lasting difference. So, they will likely be more interested in funding your programs and initiatives that help establish their legacy than they will in simply having their money deposited into your organization’s investment pool.

Just as we see that current donors have a growing interest in gift designations rather than unrestricted giving, we see a similar interest among planned giving donors who want to ensure their legacies. Some donors want to be assured of having a long-term, definable impact while other might be content with having their name, or the name of a loved one, on an endowment fund. The key is to understand what motivates the individual.

Social Donors:

Donors communicate with your organization in a variety of ways thanks to new technologies. They also communicate with each other like never before.

Donors are online. And it’s not just young donors. They view your website, they engage in crowd funding, they give online, they take surveys, etc. Here are a few simple things you need to do to make sure those experiences inspire support:

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February 10, 2014

Special Report: Mark Zuckerberg & Wife Lead List of Top Philanthropists

[Publisher’s Note: “Special Reports” are posted from time-to-time as a benefit for subscribers and frequent visitors to this blog. “Special Reports” are not widely promoted. To be notified of all new posts, including “Special Reports,” please take a moment to subscribe in the right-hand column.]

 

With a gift of $992.2 million of Facebook stock to the Silicon Valley Community Foundation, Mark Zuckerberg and his wife, Dr. Priscilla Chan, find themselves at the top of The Chronicle of Philanthropy’s list of largest philanthropists in 2013.

Mark Zuckerberg by Andrew Feinberg via FlickrZuckerberg, at age 29, is the youngest philanthropist ever to top The Chronicle’s annual list of largest donors.

George Mitchell, with a bequest gift of approximately $750 million to the Cynthia and George Mitchell Foundation, ranked second on the 2013 list.

In total, the top donors of 2013 contributed $7.7 billion plus $2.9 billion in pledges. The numbers and ranking are based on publicly available information.

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August 9, 2013

Philanthropy at Gunpoint?

In a recent op-ed piece in The Chronicle of Philanthropy, Mark Rosenman writes, “… few people in the nonprofit world seem aware of a new legislative proposal that could add $35-billion a year or more to [charity] programs perhaps including their own organizations.”

Rosenman is referring to a new tax proposal by Sen. Tom Harkin (D-IA) and Rep. Peter DeFazio (D-OR) that would impose a financial-transaction tax modeled on one adopted by the European Parliament and soon to be implemented by 11 of its member nations in order to slow flash-trading.

The Harkin-DeFazio plan, called the “Wall Street Speculators Sales Tax,” “has drawn the support of over 40 national nonprofit organizations and labor unions but has not caught the imagination of local and regional charities or the major coalitions that represent nonprofit groups,” according to Rosenman.

While I encourage you to read Rosenman’s op-ed article as well as the comments, many made by me in a tense exchange with Rosenman, I’ll share with you here what’s wrong with Rosenman’s support of the new tax plan:

1. The Wall Street Speculators Sales Tax will NOT benefit the nonprofit sector as it currently stands. Harkin and DeFazio introduced the tax plan to generate revenue to reduce the deficit. Right now, there is no reason to believe that even one cent would flow through to the community benefit sector. Rosenman initially misleads his readers on this critical point and does not provide clarification until the comment section.

2. Even if Congress could be persuaded to give the new revenue to the nonprofit sector, it raises a number of questions. Who would decide which charities should receive the money? On what basis should those decisions be made? Given that so many large charities employ lobbyists, would the new government spending go to those with political influence or those with vital programs that produce desired outcomes?

3. More government funding is not necessarily a solution to our problems. The federal government is already spending an enormous amount on the nonprofit sector. Government spending on nonprofits has grown from $100 billion a year in 1962 to an astounding $3.6 trillion in 2012, according to a report in The Wall Street Journal by James Piereson, a Senior Fellow at the Manhattan Institute and President of the William E. Simon Foundation.

If a 36-fold increase in government spending on the charity sector since 1962 has not produced the desired result, will an additional $35 billion do the trick? At what point will government be spending enough on the charity sector?

The charity sector’s enormous appetite for government money (really taxpayer money) has created an interesting dynamic. Piereson points out that many of the charities that receive the most government funding turn around and lobby the government for even more money and for higher taxes! This kind of dynamic is created when nonprofit organizations start being funded like and acting like government agencies rather than charities.

The nonprofit sector’s reliance on government funding is dangerous. It encourages institutional laziness, a loss of independence, a lack of public responsiveness and, perhaps, aligning mission with government objectives rather than constituent needs.

Marvin Olasky observed in his book The Tragedy of American Compassion, greater government involvement in and funding of the social services sector historically has led to a pullback of private support for such organizations.

I’ve served on the boards of social service agencies, most recently for an organization helping children.

Piggy Bank by Images_of_Money via FlickrThe social service agency received virtually all of its funding from the government in the form of grants and contracts. At that time, the agency was meeting just a quarter to a third of the need in the community. But, to its credit, the agency eventually set the goal of meeting the needs of 100 percent of the community. The organization recognized that it would never be able to achieve this goal if it continued to be so dependent on government funding. Therefore, the agency launched a major, sustainable push for private funding.

An interesting thing happened. As private funding grew, the organization’s service capacity also grew. With a strong, compelling case for support, the agency has now raised the necessary resources to meet the needs of everyone in its community! While government funding is still important, the organization has achieved a healthier more sustainable funding balance that allows it to serve far more people and serve them better.

Richard Freedlund, on the greatergoodfundraising blog, states, “The problem is, if your budget is so dependent on government funding and not donors, you really do not fit the definition of a charity.”

4. The proposed tax would affect more than the wealthy. Rosenman stated that the new tax would primarily impact wealthy and institutional investors. However, that’s like a tuna fisherman saying his nets primarily catch tuna, and we should not worry about the dolphins also caught in the nets. The fact is institutional investors represent mom and pop investors and pension funds for working Americans. The majority of people in the US own securities.

Rosenman says the tax really won’t add up to much money for these small investors, so I shouldn’t worry about them. But, I had another idea. I asked my 86-year-old mother what she thought about the new tax idea.

Before I tell you what my mom said, let me just mention that for a huge chunk of her life, she was poor. I’m talking coal-stove heat, no bathroom plumbing poor. Together, she and my dad worked hard to put food on the table and a roof over our heads. As a result of a strong work ethic and a commitment to saving, she now has a modest nest egg, some of which she invests in mutual funds.

Here’s what my mom said about the new investor-tax proposal with Rosenman’s suggested modification for charities:

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June 19, 2013

What You Really Need to Know about Giving USA 2013

Philanthropic giving in the USA increased for the third straight year in 2012, but only modestly.

Overall giving in 2012 totaled $316.23 billion, an increase in current dollars of 3.5 percent over 2011. Adjusted for inflation, the increase is just 1.5 percent. That’s the finding presented in Giving USA 2013, the report researched and written by the Indiana University Lilly Family School of Philanthropy and just released by the Giving USA Foundation™.

Click the photo to get a free copy of Giving USA Highlights.

Click the photo to get a free copy of Giving USA Highlights.

I had a chance to sit down and talk with Dr. Patrick M. Rooney, Associate Dean for Academic Affairs and Research at the Lilly Family School of Philanthropy. He asserts that, at current growth rates, it would take at least six years for a return to pre-recession giving when adjusted for inflation. He anticipates growth will indeed continue to be slow since the overall economic recovery is slow.

For more than half-a-century, giving has hovered at two percent of Gross Domestic Product. When GDP grows strongly, giving is robust. When GDP growth is sluggish, so is philanthropy. With many economists predicting 2013 GDP growth of just 1.9 percent, Rooney’s prediction seems entirely reasonable.

Here are some highlights from the report:

–2012 saw marked year-over-year growth in corporate giving (12.2 percent in current dollars), which is strongly linked to companies’ profits. For 2012, corporate pre-tax profits surged upward 16.6 percent, according to the Bureau of Economic Analysis.

–Uncertainty fueled by mixed economic indicators may have moderated giving by individuals, who historically account for the largest percentage of total giving. Positive trends, such as the 13.4 percent increase in the Standard and Poor’s 500 Index between 2011 and 2012, the slight rise in home values, and overall lower unemployment rates and fuel costs, were combined with budget concerns and tax reform discussions. In addition, personal disposable income rose 3.3 percent and personal consumption expenditures rose 3.6 percent last year, virtually mirroring the growth in individual giving (3.9 percent in current dollars).

–Giving by individuals rose to $228.93 billion in 2012, an estimated 3.9 percent increase (1.9 percent adjusted for inflation). Income and wealth are key drivers of household giving, as is a sense of financial security. Giving by taxpayers who itemize their gifts represented 81 percent of the total donated by individuals in 2012.

–Giving by bequest decreased an estimated 7.0 percent in 2012 (8.9 percent adjusted for inflation) to $23.41 billion. Itemizing estates contributed 78 percent of the total, or $18.31 billion. Bequest giving tends to be volatile from year to year, as it is highly influenced by very large gifts from estates that closed during that year. For example, Rooney explains that if we remove one exceptionally large bequest from the 2011 numbers, we find that bequest giving was close to the same in 2012 and 2011 when adjusted for inflation. So, the big dip in 2012 should not set off alarm bells. With real estate values and stock portfolios rebounding, the future for bequest giving is encouraging.

–Giving by corporations rose 12.2 percent in 2012 (9.9 percent adjusted for inflation), to an estimated $18.15 billion, including gifts from both corporations and their foundations. The two entities provide cash, in-kind donations and grants. Increasing the 2012 total was the estimated $131 million corporations gave to nonprofits working on relief efforts in the aftermath of Hurricane Sandy.

–Giving by foundations increased 4.4 percent (2.3 percent adjusted for inflation) to an estimated $45.74 billion in 2012, according to figures provided by the Foundation Center. Giving by community foundations grew 9.1 percent last year, which helped to bolster the total. Operating and independent foundations increased grant making by 3.5 percent and 3.9 percent, respectively. While stock values increased in 2012, foundations often use a multi-year rolling average when valuing their portfolios. Therefore, as stock values continue to climb, we should see stronger future growth in foundation giving.

–Looking at foundation giving, 45 percent comes from family foundations where a member of the family continues to be actively involved in running the foundation. In a sense, these organizations blur the line between foundation and individual giving. Giving by family foundations can often be very relationship driven as with individual giving.

While the data provides a number of interesting insights about the charitable behavior of Americans, it also hints at serious warnings, according to a panel of experts that gathered in Philadelphia to present the Giving USA findings. The panelists included Jon Biedermann, Vice President of DonorPerfect; Robert Evans, Founder and Managing Director of The EHL Consulting Group; Eileen R. Heisman, ACFRE, President and CEO of the National Philanthropic Trust; and Rooney. Here are their warnings:

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