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"Employees are the most important thing to the success of our business so if allocating resources there is going to make a difference in achieving our mission and achieving our goals, we’re going to allocate resources there," Tara Fitzpatrick-Navarro, president and CEO of the United States Tennis Association Mid-Atlantic Section (USTA-MAS), said.
Last year, the USTA-MAS hired a concierge service for its employees. It’s not about scoring reservations at the trendy new restaurant or tickets to a sold-out show. It’s more about getting tedious or mundane tasks off the plate of employees so they can focus on their jobs.
It's the second consecutive year that the Herndon, Va.-based organization earned the No. 1 ranking in The NonProfit Times' 2022 Best Nonprofits To Work For. In this episode, Fitzpatrick-Navarro explains how the concierge service helps her organization. She also discusses other programs, benefits and initiatives, including employee involvement in selecting a new healthcare plan option and personalized, handwritten notes she sends to her nearly two dozen employees.
"It's just this additional step of trying to make everything in your life work through benefits that we provide you so that you can be your absolute best employee," Fitzpatrick-Navarro said of the new concierge service. "So you can be the most productive, both personally and professional. It's awesome." USTA Mid-Atlantic also made changes to its health care plans, including employee engagement in making that decision. Employees also were surprised with a pie -- delivered to their doors -- for Thanksgiving.
The Best Nonprofits To Work For is an annual survey by The NonProfit Times in partnership with Best Companies Group. Organizations register in the fall to participate and go through a battery of surveys. Those results are then scored across eight different categories and ultimately 50 nonprofits make the cut. You can find more details and the complete Best Nonprofits special report in the April print edition of The NonProfit Times.
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A woman builds a business empire and then goes on to give away millions of dollars to charity. It’s not an unusual story, at least not today -- but if the woman was an African-American during the Jim Crow era?
Madam C.J. Walker is considered America’s first self-made, female millionaire. We’ll learn more about her in today’s episode from Tyrone McKinley Freeman, the author of Madam C.J. Walker’s Gospel of Giving: Black Women’s Philanthropy during Jim Crow.
Freeman is an associate professor of philanthropic studies and director of undergraduate programs at the Lilly Family School of Philanthropy. He’s also among nine winners of the 2022 Dan David Prize, which recognizes “outstanding scholarship that illuminates the past and seeks to anchor public discourse in a deeper understanding of history.”
Established in 2001 by the late entrepreneur and philanthropist Dan David, the prize is endowed by the Dan David Foundation and headquartered at Tel Aviv University. Winners will be honored at a ceremony in May. Each winner will receive $300,000 to recognize their achievements to date and support future work.
In this episode, Freeman provides some history and perspective on African-American charitable giving and practices, how they shape today’s giving, and what fundraisers and charity executives can learn from that.
"I grew up in the Black church, which is a very strong and historically important philanthropic institution, it was all around me," Freeman said. "I grew up in it but that word philanthropy wasn’t used. It was just something that people were doing what they thought they should do, what they felt like they were called to do but they didn’t think of themselves as philanthropists but this was the community that taught me about giving and generosity," he said.
“When I became a professional fundraiser and I was trying to look at the field and see how it was engaging this community and other diverse communities, and really wasn’t finding much, or wasn’t finding much of an understanding or a connection to it, and yet it produced me so I knew it was real, I knew it existed,” Freeman said.
He also discusses MacKenzie Scott's giving and from a historical perspective when it comes to Historically Black Colleges and Universities.
Freeman shares the history of Madam C.J. Walker and where her cosmetics empire stands today. "Being Black billionaires is new but giving is not," he said. The book "presents the first comprehensive story of Walker’s philanthropic giving arguing that she was a significant philanthropist who challenged Jim Crow and serves as a foremother of African American philanthropy today."
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Endowments are a common form of giving to higher education, arts , and medical research organizations.
William Foster, managing partner, and Darren Isom, partner, of The Bridgespan Group, analyzed the investment income of 56 nonprofits dedicated to social change. Between 2000 and 2013, only 5% of philanthropic gifts of $10 million or more were deployed to endow social change organizations. On average, the endowments of organizations led by people of color were almost four times smaller than those of white-led organizations, and their average percentage of revenue was less than half.
Rarely are endowments deployed for funding social change but they are common institutional nonprofits: 70% of organizations in higher education; 33% among hospitals, and 23% in the arts.
Based on their analysis, Foster and Isom authored a piece in Stanford Social Innovation Review (SSIR) titled "Endow Black-Led Nonprofits."
In this episode, Isom and Foster tackle what they say are the three objections that funders and donors often cite about endowing social change nonprofits:
Most nonprofits, especially those led by people of color, lack the capacity to absorb a large gift. Nonprofits should work themselves out of business. I can manage the money better than a nonprofit."It’s a stodgy tool for a radical purpose," Foster said of endowments. "It’s about giving money that you have to an organization that can deploy it in perpetuity. And it’s how all the greatest institutions that had a huge effect on our civil society was built," he said.
"An endowment is not just a gift of transfer of money, it's a transfer of power," Isom said. "That makes endowments the ultimate form of trust-based philanthropy. The question becomes how do you disrupt the narrative in which you share who you think should be given that power."
The pair put into context the disparity of endowment sizes of Historically Black Colleges and Universities (HBCU). The 10 most richly endowed universities have almost 95 times larger than the total wealth of all 107 HBCUs combined.
"As we think about the myth of absorptive capacity to some degree, I think there's something to be said, that for black-led organizations, particularly those with a proven record of progress, giving them too much isn't the problem, the real pitfall is when you give them too little," Isom said. "We engage in this world of philanthropic sharecropping where organizations are given just enough to make it into the year and ask for more the following year. There's something to be said about how you change the dynamic there."
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An increase from 3 to 4 stars on Charity Navigator can be associated with a 6% rise in contributions. For smaller charities, the impact can be as much as 11%. That’s not too surprising but what about when ratings drop? According to new research, there’s no impact on contributions.
“There seems to be this asymmetric effect,” said Jennifer Mayo, a Ph.D. student at the University of Michigan and author of Navigating the Notches: Charity Responses to Ratings. Some charities respond to incentives by changing behavior to try to get themselves above the star thresholds, which leads to “bunching.” Mayo explains more about that and what fields that’s more likely to occur during this episode of Fresh Research. “You always see this tradeoff between how much you want to incentive the organization or person to improve their score versus how many people are facing that incentive,” she said.
A notched rating system like Charity Navigator’s four stars, induces more behavioral change than a continuous measure, like its new Encompass Rating System, which affects a smaller number of charities. About 9,000 nonprofits are included in Charity Navigator’s four-star rating system. Last year, the organization began to roll out its new Encompass Rating System, based on four beacons. About 60% of that rating – which is on a 100 scale – is based on the impact and results beacon.
“It came through to us as a data point for helping us with the evaluation and unification of those rating systems,” said Kevin Scally, chief relationship officer. “The notched system does have benefits to nonprofits as well as users.
“Her analysis of the notched system, particularly the bunching, is really going to help us inform how we can incentive performance of the nonprofits,” Laura Andes, vice president of impact ratings for Charity Navigator, said.“She gave us clues on how we can more effectively do that as we move forward. Who is most incentivized, and it’s not everyone; some sectors more than others.”
Some 80% of donations through Charity Navigator's Giving Basket go to organizations with 3 and 4 stars, according to Scally.
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#GivingTuesday in 2020 raised an estimated $2.47 billion both online and offline, which was up 25% from $1.97 billion in 2019. Almost 35 million people participated in 2020. What's on tap for 2021?
That's up to nonprofits, according to Woodrow Rosenbaum, chief data officer at Giving Tuesday. “We’ve been handed an opportunity. It’s not often that you have an industry that’s had a multi-year trend that just suddenly turns positive, he said in this bonus episode of the Fresh Research podcast. "Whether that becomes a positive legacy of this crisis, depends on what we do now. How we engage them now, in this absolutely critical time, is going to be the difference between preserving this shift and going back to a declining donor base.
#GivingTuesday was the single biggest day for donor acquisition in 2020, with Dec. 1 showing the highest percentage of donors acquired across all cause areas, according to Rosenbaum. Donor acquisition was up, there were more donors in the system, and multi-year trends for contractions reversed.
“There’s a really pervasive scarcity mentality in the nonprofit sector and it’s really harmful and most of all because the data do not support it. The giving economy is lot more elastic than people realize. #GivingTuesday is one example of the potential to get more and not have it cannibalize other giving,” he said. “As soon as you release yourself from this fear of competition and this scarcity mentality, it opens up all kinds of opportunities to engage and to re-engage. Donors aren’t tired of giving but that doesn’t mean they’re tired of your message.”
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MacKenzie Scott's billions of dollars in mega gifts and American donors' response to the coronavirus pandemic (COVID-19) fueled the largest charities in the United States last year.
The 2021 NPT 100 ranks the largest nonprofits in the U.S. that derive at least 10% of total revenue from public support. Colleges and universities are not included in the study and neither are donor-advised funds (DAF).
Jacob Harold, executive vice president of Candid, joins the discussion in this episode to talk about the 2020 numbers and what it could mean for charities moving forward. Candid helps provide data for The NPT 100. Also playing a part in this year's report were Grant Thornton, which helps to compile and analyze the data, and Data Axle, which designed the charts that appear in the November print edition.
"How is it that during a crisis like this, the sector as a whole, or at least this group as a whole, was able to come away with not having to dip into reserves, ultimately, actually strengthening balance sheets," Harold said during the conversation. "I think that's a question that has a number of different dimensions to it that we should explore."
Total revenue was an estimated $79.88 billion, an increase of 3% from the previous year for these 100 organizations but public support was up more than 6% to $48.568 billion. Other revenues that increased were government, almost 15% to $10.919 billion, and investment income, 11.2% to $3.327 billion. Program service revenue took a 12% hit, down to $14.65 billion. Other revenue declined almost 9%, to $2.471 billion.
GiveDirectly (No. 70, $306.216 million) in New York City, the Atlanta-based CDC Foundation (No. 86, $255.483 million) and Second Harvest Heartland (No. 94, $236.949 million) in Brooklyn Park, Minn., were among the fastest-growing nonprofits from 2019 to 2020. All three organizations ranked in the NPT 100 for the first time. Other nonprofits that returned to the top 100 after an absence included New York-based organizations Sesame Workshop (No. 89, $246.073 million) and Robin Hood (No. 97, $220.093 million).
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Nonprofits have been pushing for a universal charitable deduction for years. The CARES Act created a temporary tax deduction for charitable gifts up to $300 for single or married filers in 2020. Congress extended that into 2021 and increased the deduction to $600 for married couples.
Two professors at the University of Virginia propose a tax subsidy to increase civic engagement in a time of income inequality and political polarization. In their paper, The Charitable Tax Deduction and Civic Engagement, Andrew Hayashi and Justin Hopkins propose that all taxpayers with adjusted gross income (AGI) less than the national median would get the Community Contribution Credit. Hayashi is a professor at the University of Virginia School of Law and Hopkins is a professor at the University of Virginia’s Darden School of Business.
The refundable tax credit would be equal to 90% of their contributions, capped at $500. It would apply for donations to 501(c)(3) nonprofits -- but also 501(c)(4) social welfare organizations, which currently are not eligible for deductible contributions. In 2018, the most recent year for which data are available, the national median AGI was $43,614. That year, 87.4% of taxpayers claimed the standard deduction while 11.4% of taxpayers claimed itemized deductions.
"We're trying to make the taxpayer incentivized to think about their local organizations that they either have used in the past or are familiar with because I think there's a good portion of people in our community who have never considered potentially donating to their local organizations because theres's a lack of resources, or money is tight," Hopkins said on this episode of the Fresh Research podcast. "But if you provide this incentive to everybody, then all of a sudden, you create sort of a whole new class of donor," he said. "Now all of a sudden , they have the the ability to make contribution to these organizations and maybe it's organizations that have helped them in the past. And so I think one of the beautiful aspects of this is, is the idea of transforming a recipient or a client of a local nonprofit into an actual donor of it. And the idea that they would get involved in the operations."
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When the Nonprofit Revitalization Act passed in 2013, it was the first major overhaul of nonprofit regulations in New York State in 40 years. The legislation modernized rules around nonprofit boards and committees and, among other things, prohibited nonprofit officers from being present at meetings where their pay is discussed.
In the years since, a trio of researchers has examined the effect that one regulation had on executive compensation, becoming the basis for Regulating CEO Pay: Evidence from the Nonprofit Revitalization Act. The 67-page paper was written by Ilona Babenka, associate professor in the Department of Finance in the W.P. Carey School of Business at Arizona State University; Rik Sen, associate professor in the School of Banking and Finance at the University of New South Wales, and Benjamin Bennett of Tulane University’s A.B. Freeman School of Business.
They examined tax data for almost 1,700 nonprofits in New York State and found that from 2009 to 2017, average compensation for the chief executive officer (CEO) pay dropped by 2% to 3% after the act went into effect. Despite earning less than they might have expected, CEOs spent 2% more time working without additional turnover, according to the research.
At the same time, nonprofit performance improved in terms of larger contributions, more volunteers and bigger revenues. Nonprofits also were more likely to set up a compensation committee, perform independent compensation review, or adjust pay to be in line with peer organizations. The legislation, authors argue, reduced the fraction of "compromised boards" among New York's nonprofits. "Overall, our results suggest that regulation that targets the pay-setting process can be effective at improving organizational outcomes at nonprofits."
The average nonprofit in the research has seven executives, reports $265 million in total assets and $129 million in revenue and some 600 volunteers. Average CEO pay was an estimated $600,000 while median CEO compensation was $350,000.
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You finish up your shopping and the cashier asks, "Would you like to donate to a local charity?" Do you give? If you do, how much? Or maybe they ask you, would you like to round up your total to donate the difference? Those are some of the scenarios in a recent experiment.
Results of that experiment are found in Checking Out Charity: A Study of Point-Of-Sale Donation Campaigns, by Adrienne Sudbury and Christian Vossler. Sudbury is a professor at the College of Business and Economics at Longwood University in Farmville, Va. Vossler is an economics professor at the Haslam College of Business at the University of Tennessee in Knoxville.
Individuals were presented with three different ways to make a donation at checkout: a fixed amount, a rounding request, and an open-ended ask. “With open-ended, you definitely have much lower rates. What we theorize is there’s some sort of cognitive cost going on, where people have to decide actually how much to donate under that scenario,” Sudbury said on this episode of Fresh Research. “With the fixed request amount and giving people a binary choice, you limit the potential donation. There’s pros and cons because if you only ask someone for $1 but they were willing to donate $2, you’re missing out on some potential donation there,” she said.
The authors attribute some differences in donation rates to what they called “loose change effects” -- where people are more likely to donate if they end up with less change. “The majority of people chose to give themselves less change through their donation amount,” Sudbury said. “Some gave the same amount of change but absolutely no one gave themselves more change.” That change adds up: More than $605 million was raised through point-of-sale (POS) fundraising campaigns in 2020, according to America’s Charity Checkout Champions from Engage For Good.
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The American Cancer Society aims to raise $1 million exclusively through cryptocurrency. Its Cancer Crypto Fund will be renamed in honor of the first donor to contribute $250,000. Donations of at least $10,000 will appear on the Cancer Crypto Fund Wall of Honor. The Salvation Army launched a cryptocurrency option the week before Christmas and received 13 donations, including one donor who gave 2 Bitcoins.
Jason Shim and Anne Connelly join this episode to talk about their new book, "Bitcoin and the Future of Fundraising: A Beginner's Guide to Cryptocurrency Donations." They discuss how nonprofits can get started accepting cryptocurrencies, why they think charities should, and the future of cryptocurrency.
A board member of NTEN, Shim is director of digital strategy and transformation at Pathways to Education Canada, an organization dedicated to helping youth in low-income communities to graduate from high school. In 2013, it was the first charity to issue tax receipts for Bitcoin donations.
Connelly is on the faculty at Singularity University, a company that offers executive educational programs, a business incubator and innovation consultancy service. She previously worked with Doctors Without Borders as a field worker in Central Africa and as a fundraiser in their offices in Canada and Ireland.
American Cancer Society so far has raised $400,000 in its Cancer Crypto Fund, including 10 donations of at least $10,000. But it’s not just big national charities getting involved with cryptocurrency. Miami Lighthouse for the Blind and Visually Impaired received a few thousand dollars, including a donation in Ethereum from the CEO of Coinbase, when it announced that it's now accepting cryptocurrency donations. The Brotherhood SisterSol in Harlem also recently announced they will accept cryptocurrency donations.
There are thousands of digital currencies but Bitcoin is probably the most popular and mainstream. It's also volatile. A year ago, 1 Bitcoin was valued at about $10,000, jumping to $20,000 by December, and $40,000 in January. By April, it was worth more than $60,000. As of July, however, 1 Bitcoin was worth about $33,000.
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Research shows that multi-channel donors can be worth more than donors who give only online or only offline. But do nonprofits treat multi-channel donors like they're worth two or three times more to their organization? A recent experiment looked at how nonprofits respond after a gift and the results could surprise you.
Gabe Cooper, CEO of Phoenix-based Virtuous Software joins the program to talk about the study they embarked on with NextAfter Institute, titled, The State of Multichannel Donor Communications: How 119 Organizations Are Using Online and Offline Channels to Engage New Donors.
The report examines how charities responded to donations that were made both online and offline. Donations of $20 were made to 119 organizations in the spring of 2020. Communications were then tracked across email, direct mail, telephone and text messaging for four months, culminating with the final 57-page report.
"We seem to know intuitively that communicating with people on multiple channels works," Cooper said. "The data over and over again in these studies suggests that communicating on multiple channels gets far higher engagement from donors and so the fact that we are not really mailing all our online donors or vice versa...that is a little bit shocking because it seems to be a pretty big disconnect from how we know donors behave," he said.
"Only 3% of the organizations we gave to were actually doing multi-channel well, meaning, somebody came in on one channel, and then they started engaging with them on both in a meaningful way or even more channels," Cooper said. "So, that was the big shocker for me was even though multichannel gives are worth 300% more LTV [lifetime value] than a typical single-channel donor, there's just very few nonprofits that are doing this after a first gift."
There were some other surprising findings -- both good and bad -- and several organizations were cited for being stellar with their communications, with Cooper in particular noting Buckner International and Doctors Without Borders.
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Donor-advised funds (DAF) have dominated philanthropy in any number of ways over the past decade, whether it's increasing charitable contributions, boosting assets, or simply garnering attention within the public square.
That could be why it takes a super sized episode of Fresh Research tackle the topic. This episode diverges from the usual format; instead of one interview there are two interviews, each taking a side on the subject of DAFs and proposed reforms around charitable giving.
The first segment will feature Ray Madoff, co-founder and director of the Boston College Law School Forum on Philanthropy and the Public Good. She's part of the Initiative to Accelerate Charitable Giving, a coalition of philanthropists, nonprofits and foundations pushing charitable reforms, including new rules around donor-advised funds. Since this episode was recorded, Madoff released a new paper with UC-San Diego Professor James Andreoni titled, Impact of the Rise of Commercial Donor-Advised Funds on the Charitable Landscape, 1991-2019. Among the findings was that even though “more funds are flowing into, and growing in, private foundations and DAFs, there’s no evidence that charities have benefited from this trend.”
In the second segment, Howard Husock, senior executive fellow at The Philanthropy Roundtable and adjunct fellow at American Enterprise Institute (AEI), talks about some of the shortcomings of the reforms proposed by IACG around DAFs and foundations. AEI hosted a similar discussion between Madoff and Husock during a recent virtual panel. You can find the link to the YouTube video here.
Husock also touches on his recent paper for AEI, Appreciation in donor-advised funds: An analysis of major sponsors {48:55}. The report uses data from the Internal Revenue Service (IRS) for the four largest commercial sponsors managing DAFs to get a sense of the magnitude of their asset appreciation over the past decade. During the discussion, Husock also notes a paper {51:56} by Dan Heist (“Understanding Donor-Advised Funds: How Grants Flow During Recessions,” with Danielle Vance-McMullen), which was the subject of a previous Fresh Research episode in 2019.
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Even for the Best Nonprofits To Work For, 2020 was a difficult year. The United States Tennis Association Mid-Atlantic Section (USTA MAS) rarely has any voluntary turnover among its 21 employees. But like at many nonprofits, the pandemic forced difficult decisions. The organization laid off about one-third of its staff in July. It was among 10 of the 2021 Best Nonprofits To Work For that reported laying off or furloughing staff last year.
Chief Operating Officer Beth Twomey joins this episode of the Fresh Research podcast, to talk about how the organization kept employees engaged and some of the challenges and successes of thep ast year. The Herndon, Va.-based USTA MAS ranked No. 1 among small nonprofits and No. 1 overall in the 2021 edition of the Best Nonprofits To Work For.
After months of working through the pandemic, employees received a care package in October from CEO Tara Fitzpatrick-Navarro. It included a personal thank you note as well as a branded mask, Yeti coffee mug, a hooded sweatshirt, T-shirt and tennis ball chocolates. “I can’t tell you what a giggle it brought to everybody,” Twomey said. “It’s a way for staff to know that she’s thinking of them, and that her door is open, and she’s available, and she’s here to make their life a little bit sweeter."
As part of the Best Nonprofits To Work For process, The NonProfit Times works with Harrisburg, Pa.-based Best Companies Group (BCG). Participating nonprofits go through a battery of surveys, including employees, managers and outside vendors. There are 78 questions within eight categories that make up the Employee Benchmark Report (EBR), which compiles the percentage of responses that were “agree somewhat” and agree strongly.” On average, the 50 Best Nonprofits often score higher among those categories than organizations that don’t make the list.
The top 50 organizations are broken down by size. Medium organizations, those with 50 to 249 employees, accounted for almost half of the 50 Best Nonprofits, with 24 honorees. Small organizations, considered those with 15 to 49 employees, nabbed 20 of the 50 spots, including No. 1 and No. 2. There were six large organizations, those with 250 or more employees, that made the final cut.
Overall, Best Nonprofits scored highest relative to their counterparts that didn’t make the list in the categories of Leadership and Planning (+11%), Pay and Benefits (+11%), and Culture and Communications (+10%). Best Nonprofits scored highest in the areas of Work Environment and Overall Engagement, both 95%.
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A new report examines how crowdfunding fits into the larger philanthropic landscape and perceptions of crowdfunding by both crowdfunding donors and non-crowdfunding donors while also looking at charitable behavior during the COVID-19 pandemic.
The study, Charitable Crowdfunding: Who Gives, to What, and Why?, by Indiana University Lilly Family School of Philanthropy at IUPUI, uses data from a survey of 1,535 U.S. adults in September 2020. The sample was weighted to ensure results were representative of the general population.
Una Osili, Ph.D., is associate dean for research and international programs and Efroymson Chair in Philanthropy at the Lilly Family School of Philanthropy. “One of our big questions around 2020 is that in addition to studying how donors were giving, we were also looking at how philanthropy was changing during the pandemic,” she said. “What is very clear is that crowdfunding now is an important part of the philanthropy landscape and that is likely to continue going forward."
In recent years, some disaster giving was starting to be powered through crowdfunding, with donors connecting with individuals affected by hurricanes in Texas and Puerto Rico, according to Osili. "With COVID, we're starting to see some of that take place, where individuals are supporting campaigns that are designed to help other individuals. Some of them artists in the community or small businesses. So the notion of generosity expanding means that we're also seeing new types of causes emerge or cause areas," she said, such as funds directed to help essential workers.
Crowdfunding donors tend to be more diverse, younger, less religious and more likely to be single, compared to traditional charitable giving donors. Nearly 20% of donors typically give to social justice causes. A higher percentage of those who give through crowdfunding (27.7%) or social media (28.6%) support social justice causes, compared to traditional charitable donors.
The complete 24-page report can be accessed here.
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Before the coronavirus pandemic, Pam Keough would have described herself as one of those bosses who believes everyone needs to be in the office. Now, it's not so black and white.
For a lot of nonprofits, it's been a year of working remotely, replacing in-person events with virtual events and trying to make it through the next quarter.
Keough is president and CEO of Make-A-Wish Foundation Connecticut. in Trumbull, Conn., about 70 miles outside New York City. A year ago, she spoke with The NonProfit Times about how the organization was dealing with the early stages of the pandemic. We visited with her again in fall, about six months into the pandemic, and again in March, just before the anniversary of the pandemic, to see how things have gone.
"In general, I see the light at the end of the tunnel," Keough said during an interview in March. "It's gotten to a point -- and I'm talking to a lot of the CEOs -- their staff has just kind of had it. Everyone's just ready to get back to where we were over a year ago," she said.
In September, some staff returned to the office voluntarily, going in teams and implementing safety measures like directional arrows on the floor and deep cleaning protocols. But when COVID cases rose amid another wave in December, people got nervous, Keough said. "I think people have gone the other way, they don't want to wear their sweatpants anymore, they don't want their dog barking in the background. I think people have just had enough," she said.
Keough has tried hard to be sensitive to employee concerns, whether coming into the office or working remotely. Ahead of the Presidents' Day holiday, she surprised staff with an extra day off on Friday to make it a four-day weekend. "People aren't taking PTO although we're encouraging them," she said. "You get back what you give so when you give a day off, they come back recharged and work even harder."
At the start of the pandemic in spring 2020, digital fundraising declined but traditional mail took off as people were home and actually reading their mail. That phenomenon has since flipped, with digital fundraising back up and direct mail fundraising back to normal. Still, Keough expects the pipeline of wishes probably won't get back to normal until 2024. MAW Connecticut laid off three of 18 staff members in August but plans to hire one back on the program side.
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Early indicators show that charitable giving was up in 2020 in response to the coronavirus pandemic. Projections for giving in 2021 and 2022 are even rosier.
Charitable giving is expected to increase 4.1% this year, buoyed by individual giving (+6%), and another 5.7% in 2022 on the strength of increased giving via foundations (+8.8%) and estates (+11.9%).
On this episode of the Fresh Research podcast, Una Osili, Ph.D., joins us to break down the projections from the Lilly Family School of Philanthropy at IUPUI in Indianapolis, Ind. She is associate dean for research and international programs and a professor of economics and philanthropic studies at the Lilly Family School of Philanthropy. She's also a dean's fellow at the Mays Family Institute on Diverse Philanthropy.
The Lilly School partners with the University of Pennsylvania Wharton School of Business, which provides data using the Penn Wharton Budget Model for select economic variables used in producing the estimates.
Growth rates are based on predictions for giving in inflation-adjusted 2019 dollars using 2020 as the base year. Projections are a “best-case scenario,” if Gross Domestic Product (GDP) recovers in 2021 as is expected by the Congressional Budget office (CBO) and others.
“In terms of overall growth in philanthropy, we do have to be concerned that underlying models show recovery but that recovery certainly is not expected to be broad based,” Osili said. “Some sectors of the economy are recovering faster than others, and some households have been more affected by the pandemic, not just their health conditions but also their incomes, their wealth, their ability to access employment,” she said.
“This is the extension of the K-shaped recovery we heard a lot about in 2020 where some American workers are able to work from home, work remotely, and their incomes, their wealth, if not grown, have at least stayed relatively stable through 2020-2021,” Osili said.
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Overall giving rose 2% in 2020 compared to 2019 while online donations grew 21%, according to the Blackbaud Institute Charitable Giving Report.
Steve MacLaughlin, vice president, production management, at Blackbaud, visits this episode of the Fresh Research podcast to break down the data and what you need to know about 2020 giving. The report is based on $40.7 billion in giving to 8,833 nonprofits during 2020, including online giving of $3.2 billion to 4,964 nonprofits, via the Charleston, S.C.-based firm.
"There was a definite roller coaster ride in the data that we observed over time," MacLaughlin said. "But then we started to see a recovery in the third quarter of 2020, and then certainly the fourth quarter. The last sort of three months of the year were really positive," he said.
Fundraising at the largest organizations -- those that raise more than $10 million annually -- jumped 5.3%. Medium nonprofits, which have annual fundraising revenue between $1 million and $10 million, experienced a 1.2% increase in donations. The smallest nonprofits, annual fundraising of less than $1 million, were the only category to experience a drop from 2019 to 2020 -- down 7.2%.
For MacLaughlin, 2020 was all about online fundraising, which reached 13% of total giving and mobile devices accounted for 28% of the total. The average gift amount during 2020 was $737, up from $617 in 2019. Online average donations, which are more likely to reflect individuals than institutions, jumped to $177 from $148 in 2019.
"Certainly in 2020 was where we saw, you know, a significant shift -- I think really a pivotal moment -- for online giving," eclipsing 10% of overall giving. "As overall giving struggled, especially the middle part of 2020, online giving was really holding up the dam, if you will," he said, pointing out that as overall giving was down 8% in the second quarter, online giving was up 36%.
"For me, what happened in 2020 was digital adaptation. You didn't really have a choice. You didn't have a choice about your preference for Zoom or Webex or Teams or Slack or whatever you use for virtual meetings -- you just had to do it. So we saw this big shift. Certainly the shift also was consumer driven because in so many ways consumer behavior mirrors donor behavior because the common denominator is humans. And so as they shifted in the past to a lot more online experiences, you saw that shift as well with online giving."
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Fresh Research is a podcast from The NonProfit Times, the leading business publication for nonprofit management. In each episode, we talk to authors and researchers about a study or report related to nonprofits and what it means for the charity world. We look for practical information to help fundraisers, financial managers and executives do their job better.
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Donor-advised funds (DAF) in 2019 continued their meteoric growth over the past decade and in the first half of 2020 -- amidst the coronavirus pandemic -- grantmaking by DAFs increased by almost 30 percent.
The 2020 Donor-Advised Fund Report is the most comprehensive data on donor-advised funds (DAFs) in the United States. The latest report, covering the 2019 fiscal year, showed a continued decade of growth across the board, exceeding $25 billion in grants for the first time.
Eileen Heisman, president and CEO of the National Philanthropic Trust in Jenkintown, Pa., joins this episode to discuss the 2020 Donor-Advised Fund Report and the Donor-Advised Fund COVID Grantmaking Survey.
Published each year since 2006, the latest DAF report showed:
Contributions up 7.5 percent to almost $39 billion; Value of grants up 15.4 percent to $27.37 billion; Assets up 16.2 percent to almost $142 billion; and, Number of accounts up 19.4 percent to 873,228.In the past 10 years, the number of DAF accounts grew almost 300 percent while the value of DAF accounts averaged $162,556, a decrease of 2.7%.
The Donor-Advised Fund Report does not cover 2020. For that, we discuss NP Trust’s Donor-Advised Fund COVID Grantmaking Survey. It is the first sector-wide review of grantmaking from DAFs to charities in response to COVID-19, using self-reported data by 13 DAF sponsors at the end of 2020. Collectively, this group represents almost 50 percent of total DAF charitable grant dollars annually and includes national charities and community foundation DAF sponsors.
The survey shows that grantmaking to qualified charities increased by almost 30 percent during the first six months of 2020, to more than $8.3 billion. Every subsector but arts and culture -- down 9 percent -- saw a substantial increase in the value of DAF grants during the first six months of 2020.
During a discussion about DAF payout rates [20:12], Heisman refers to a paper by Dan Heist and Danielle Vance-McMullen that was featured on a previous episode of Fresh Research.
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