From the Chronicle of Philanthropy, here’s a list of America’s Top 50 donors in 2011, the amounts given and the lucky charities.

These 50 donors gave $10.4 billion … although #1, Margaret Cargill, an heir to the fortune of her grandfather’s Cargill Corporation (agriculture and food production), gave $6 billion of that in a bequest to her two foundations (which give to the American Red Cross, Nature Conservancy, YMCA and Public Broadcasting Service, among others).

Twenty-nine donors gave $50 million or more.

My favorite is Paul Allen, the Microsoft co-founder. Wonderfully eclectic giving — arts, social services, a rock music museum, Native Americans entrepreneurship, a science fiction museum, and neuroscience. He’s the guy on this list I’d most want to have dinner with.

Tom

The Agitator also reports on the GivingUSA and the Blackbaud Indexes, but unlike those, the Atlas does not rely on surveys or selective data as provided by a limited number of nonprofits. Rather it measures total giving by sector as it occurs monthly. And, unlike either Giving USA or Blackbaud, the Atlas provides an annual forecast of the year ahead that is then updated monthly.

For 2012 the Atlas forecasts continued growth in giving, but at a slower pace — 3.9% in 2012 compared with 7.5% in 2011.

You can learn more about their methodology, the 2011 results and 2012 forecast in a FREE webinar to be presented on February 1st at 3pm EST. Register at www.infiniteconferencing.com/join and type in the participant code 79508108.

Key Takeaways from 2011 Atlas Report

• Contributions totaled $346.17 billion – a 7.5% increase over 2010.

• Giving growth was particularly strong in four states: PA (+13.1%), IL (+ 12%), FL(+10.9%) and TX (+10.0%).

• Growth in giving to Education was particularly strong (+8.9%) while Human Needs/Disaster Giving lagged other sectors (+ just 5.8%).

• Both Individual Giving (+7.8%) and Bequests (+7.5%) grew. And notably, gifts to Donor Advised Funds reached record levels.

Key Takeaways from 2012 Atlas Forecast

• Giving will continue to grow in 2011. But unlike the 7.5% growth rate for 2011, Atlas is forecasting that giving will grow at a slower pace — 3.9%.
  

• The forecast is bright for charities with an environmental mission – projected to be up 8%.

• But the church/religious sector is forecast to grow at just 1.6%.

• Political fundraising will divert some dollars from charitable giving but the impact will not be significant. The Atlas forecasts it will be much less than 1% for overall charitable giving. Of course some sectors will be more affected than others.

How do your 2011 results compare? And what increase in giving have you projected for 2012? Would love to hear from you.

Roger

P.S. I’ve noted in previous posts that if you’re a consultant, an on-staff fundraiser or board member, The Atlas of Giving, with its forecasts by sector and its state-by-state analysis is a “must” for your library. There’s a Free Edition and a Professional Edition. Check ‘em out at www.atlasofgiving.com.

And don’t forget to register for the Atlas February 1st webinar at www.infiniteconferencing.com/join and type in the participant code 79508108.

Her points are well made on an important subject — should more energy and resources in the nonprofit/charity sector be devoted to fighting and fixing systemic failures in our political, economic, and social systems … as opposed to providing urgent needed relief at the ‘bottom of the cliff’?

It’s a discussion I think needs more air time … so I didn’t want Tina’s thoughts lost in the archives. Here are Tina’s comments in full.

“Clearly, I’m woefully behind in my reading but I’ve been banking all the Agitators post and am now finally catching up. I hope you’ll indulge another comment on this one…

The part of this discussion that I find most compelling is the call to ‘zero in on the systemic, structural failures that are creating many of our social problems in the first place.’

I couldn’t agree more. And many of the nonprofits I work with are trying to do just that — remedy systematic failures.

Here’s the rub…the focus on root causes is more complex, harder to “sell” and therefore harder to raise money for. And I’m not talking about the big players like Habitat for Humanity. The work they do is critical — absolutely critical. But I’m talking about real root cause work…the kind of transformative social change that starts locally.

True systematic failures are being tackled by local grassroots organizations working to change the status quo and build political power from the ground up. They are training new leaders and organizing communities who have been cut off from participating in the systems that control their lives. They are working to shift the whole power dynamic in which we live, work and play; in our neighborhoods, in our states, nationally, and globally.

These organizations desperately need outside help to frame their complex and often intangible long-view work in a way that makes it compelling to potential supporters outside of the small core of insiders they know who think exactly like they do.

In my experience, the cases for support developed internally by these groups are train wrecks. Their appeal letters don’t inspire even me to make a gift. And don’t get me started on their websites.

These all-too-easily-forgotten groups, that we say we need more of, deserve more support. But they are caught in this catch-22 of not being able to afford the outside help that could get them and their development program to a higher level. They don’t have the expertise in-house to do it. And foundations, where they get the overwhelming majority of their income, don’t fund that type of expense.

I’m not implying that these organizations should all be given a free pass. Some of them do deserve to be put out of business. And there’s room for new groups to come in and do what these folks seem unable to do.

But rather than debating whether we need more nonprofits, I want a discussion about why we (myself included) haven’t even heard about some of the organizations that are incubating effective models for creating the change we want to see in the world, and what we can do to remedy that.”

Well said, Tina.

Meantime, Jeff Brooks at Future Fundraising Now just blogged this related — and dismal — observation: “…the offers that work best are super-simple, emotional, and often a bit short-sighted. Providing a meal for a hungry child will always beat creating systems that keep the child from going hungry. You can spend your whole fundraising career trying to change this fundamental quirk of the human mind — and you’ll have a miserably unsuccessful career.”

Experienced direct response fundraisers will always make comments like this. “Don’t try to educate donors, just grab their money!” And they have response data to back them up. So it makes sense from the hired gun’s perspective … he/she is rewarded for producing hard cash.

But that shouldn’t deter nonprofits from facing up to tackling the systemic failures. And there’s plenty of evidence that donors can be educated. For example, I’ll submit that the folks who sign up for monthly giving programs are not knee-jerk givers; they’re deeply committed and understand the long haul dynamics of the causes they care about.

In fact, I’d suggest that if you want to evaluate a potential hired gun (individual consultant or fundraising firm), find out what they’ve accomplished with monthly giving programs. Anybody can produce a portfolio of ‘instant winners’!

Tom

In the campaigns discussed, groups like the American Red Cross and Oxfam America are attempting to leverage the holiday impulse to ‘give’ (i.e., emotion at work) and channel it into donations.

Here’s a passage from the article:

“Scott Jackson, chief executive of Global Impact … says nonprofits ‘are trying to do a better job of telling their story, which is based on emotion, but it can’t just be a picture of a child or an animal. The message has to spell out the effectiveness.’

The emphasis on results means ‘the giver is guaranteed that the gift will do something really important and not end up in the bottom of the drawer,’ said Stephanie Kurzina, an Oxfam America spokeswoman.”

Sorry, I’d still argue that the campaigns featured in the article are all about emotion … the initial urge to give being augmented by the emotional need to signal one’s own personal social responsibility and indeed the desire to be recognized by the ‘gift’ recipient for having such sensibilities or values. And finally, for the recipient, there’s the warm glow generated in them as they feel that their gift-giver regards them as someone who shares those pro-social values.

Everybody feels great. Oh, and yes, the cause is served.

I realize I’ve probably made this all sound rather mechanical or crassly manipulative. But it’s not (in most cases). It just happens, dare I say, without much thought at all.

Tom

The overwhelming conclusion of psychological studies is that giving is motivated by a variety of non-rational needs and impulses and that, indeed, thinking or rationalizing gets in the way of giving.

Ironically, the same day, Beth’s Blog cited a study, Money for Good II, suggesting that sharing information about results and financial transparency would attract more donors.

Says Beth: “The study points out that nonprofits can increase their fundraising and improve operations through an intentional focus on measurement – that helps them determine impact, effectiveness, and efficiency.  After financial information, individual donors want information about how nonprofits are getting their results.”

Precisely the kind of information that yesterday’s researchers claim will diminish giving.

Now the Money for Good study was conducted by GuideStar, whose business is providing charity performance info. That’s OK. And donors will always say in a survey that of course they think deeply and carefully about their giving choices. No one admits to being victims of their emotions!

I do often argue that some donors — especially educated Boomers — will look more than others for more evidence that a charity is in fact effective at producing results.

But even so, I’m sticking with the psychologists. Emotion rules giving. Emotion brings donors to the point of giving. If any ‘analysis’ and ‘thinking’ occurs, it can break either way … it can get in the way, or it can help the donor make a ‘reasoned’ choice amongst alternatives.

So absolutely, talk about results. But I’d argue that the whole point of talking about results is still to elicit an emotional response … not trigger some sort of ROI analysis. Keep that in mind as you present your results. How, for example?

Don’t present a laundry list of 10 things you’ve accomplished this past year.

Do tell stories about the people your donor helped, the crisis she averted, the enjoyment he enabled.

Let’s hear more from you on this. In making your fundraising case, what’s the balance between heart and mind?

Tom

The bottomline won’t come as a surprise to experienced fundraisers. As the article summarizes:

“… giving is driven by emotional motives, rooted in deep impulses, cognitive biases, and even our own selfish needs. (Charity research isn’t necessarily flattering to donors.) And when we think too analytically about giving, we can deflate our initial generous instinct.”

To which I would add: So don’t make your prospective donor engage too rationally! Even offering too many giving choices can get in the way. And we all know how a too-complicated online giving process can yield mostly incompetions and ‘shopping cart’ abandonment.

Another observation regarding the ‘warm glow’ from giving:

“One dominant strain of thought among charity researchers is that our donations aren’t chiefly driven by concern for others, or a principled sense of altruism — that instead, it’s largely a way for us to indulge the desire to feel virtuous and happy about our role in the world.”

The article describes a number of research experiments where providing more information to people — from further facts about the problem being addressed to information about efficient management of overhead costs — actually diminished their giving.

What do you think? When donors start thinking, do they stop feeling … and giving?

I urge you to read the Globe article. Then, if you haven’t already done so, go back and read Roger’s post from last Monday. There he talks about a particular feeling you can cultivate amongst your donors to increase their giving.

Tom

P.S. Thanks to the Chronicle of Philanthropy for the heads-up.

Do they consider your nonprofit irrelevant or ineffectual? Or don’t they even notice you exist?

Assuming such prospects do knock at your door, how will your nonprofit respond? Suppose someone shows up with a really new and challenging proposition. Then what?

Seth Godin wrote a post the other day suggesting that your organizational culture would pre-determine the outcome.

He says: “If your organization is both pessimistic and operationally focused, then every new idea is a threat. It represents more work, something that could go wrong, a chance for disaster. People work to protect against the downside, to insulate against the market, to be sure that they won’t get blamed for anything that challenges the system.”

In contrast, there’s the organization characterized by “optimistic enthusiasm”.

Godin says: “an organization filled with people who are rewarded for shaking things up and generating game-changing products and services just might discover that outcomes they are dreaming of are in fact what happen. The enthusiasm that comes from believing that this one might just resonate with the market is precisely the ingredient that’s required to make something resonate.”

Regarding that Boomer — which reception will your organization give?

In your nonprofit, are new ideas threats or opportunities?

Tom

If you’re traveling over the Thanksgiving weekend, take it with you and ponder it.

Mark is responding to a study claiming that 12 million Boomers want to start their own nonprofit or socially oriented business over the next decade. Noting that over one million nonprofit groups already exist in the US, Mark commends the commitment and spirit of these Boomers, but argues:

“Such a multiplicity of organizations would move America further away from developing coherent analyses of public problems. And it would lead the country to define and treat social concerns as fragmented individual or local matters. That would make it profoundly more difficult to mount any significant effort to advance the broad-based change needed in our social, political, and economic institutions.”

Mark is actually making two points.

One is ‘enough already’! There are plenty of effective groups out there already … get behind them.

His second point, however, is to zero in on the systemic, structural failures that are creating many of our social problems in the first place. These failures must be attacked and corrected by policy advocacy and political action. Otherwise, we’re doomed to expend huge resources endlessly applying bandages while the injuries relentlessly compound … the ambulance at the bottom of the cliff syndrome.

Citing Wall Street and other financial abuses, Mark argues:

“…instead of simply trying to relieve the suffering of the ever-growing number of Americans hurt by the failures of our economic, social, and political systems, we need to deal with the continuing causes of our problems—those systems themselves and the people who inappropriately profit from their undemocratic malfunctioning …

It is these dynamics that must be changed if the decline of the middle class and the growth of poverty are to be reversed. And multiples of new nonprofits or socially oriented businesses would not begin to challenge that reality or stave off growing human need.”

Amen!

However, while I agree heartily with both of Mark’s points, it does not follow that existing nonprofits — whether advocacy groups or charities — deserve an automatic ‘free pass’ when confronted by new, ‘upstart’ organizations that aim to tackle the same problems.

One would think that today’s Boomer, with limitless information at hand, might readily find an existing nonprofit that was super-effective at its mission and deserving of support.

If he or she cannot, and instead launches something new, whose fault is that? Maybe the Boomer was superficial in researching or has a super ego. But maybe he/she looked carefully and concluded that existing groups just weren’t cutting the mustard … after decades of effort. Or maybe groups that are effective aren’t doing such a hot job of communicating their progress and accomplishments. If the tree falls and no one hears, was there a sound?

So while you’re tucking it in over the holidays, give some thought to how you’ll respond to the Boomer who knocks on your door, but suspects you’re outmoded, ineffectual, past your ‘use by’ date. Or worse, to the Boomer who hasn’t even heard of you.

Tom

P.S. Mark … great piece. You deserve a raise!

Frankly, I’m exhausted from preparing this, but I really hope you’ll invest the  time to read the whole post. Believe me, it’s worth it if you care about the future of your organization.

Here’s why.

Blackbaud has just delivered a “must read” report on Growing Philanthropy in the U.S. Read and heed.

The report, a view of the future we all face, is a distillation of a ‘brainiacs’ session hosted by Blackbaud and moderated and summarized by Adrian Sargeant. They’ve addressed the fact that giving is flat and what to do about it.

You really have to read the whole thing, written by Adrian, a bright light in our universe. But, for the slothful who won’t take the time to read it all, here are the key takeaways:

• Redefine Relationships. Stop being selfish. Focus on giving for giving’s sake.

• Re-orient toward longer term measures of fundraising performance. Immediate measure of ‘success’ (response rates, immediate ROI, giving totals for the year) doom us. Look at long-term values.
  

• Enhance focus on retention and building supporter loyalty.  Listen up! With retention rates in the dumper too few nonprofits really understand that a 10% improvement in retention results in a 200% improvement in lifetime value.  Time to get real.

• Develop a more integrated approach to fundraising. It’s not the method, Stupid, it’s  the message. And the message must focus on the donor’s concerns, not yours.

• Break down organizational silos and encourage greater collaboration between teams. The authors are too kind to say it, but you should be ashamed of your territoriality.

• Give supporters greater control over the relationship. Ken Burnett, The Agitator, DonorVoice and scores more have been preaching this for years. This is the arena where you can quickly add the most value.

• Promote the development of shared back office facilities. Small organizations need to stop whining and get together and share in the development of good stuff in the back room.

• Tackle high turnover rates in the fundraising profession. Face it. It’s not the pay it’s the lack of respect from CEOs and board members that drives folks out of this trade. We have an identity crisis and have to deal with it.

• Educate all stakeholders about the necessity of a longer term and integrated approach. I know, I know, it’s like playing Mozart to a cow, but we have to do it. It’s a real challenge, but we must not allow Boards to be stupid about fundraising, stewardship and philanthropy.

• Empower the regulators to enforce 100 percent filing of Forms 990 to increase their utility. Hey, I know this seems picky, but the fact is that some organizations don’t file, some lie, some don’t.  Transparency is key to the future of philanthropy. Get with it.

• Blow the whistle on organizations claiming to have zero costs of fundraising. As long as watchdog organizations reward ‘zero’ costs, organizations will lie. It’s time to call out the phonies in the watchdog groups and blast the nonprofits that play this game. There simply ain’t no thing as ‘zero’ fundraising costs.

• Fund the development of a website in the U.S. to educate the public, boards, and other stakeholders. Philanthropy is a big business, a significant part of our GNP. Let’s make it as transparent as possible.

• Encourage nonprofits to develop complaints schemes. Anyone who knows anything about donor retention and commitment is familiar with the importance of feedback. (See http://thedonorvoice.com)  This report reminds us of the absolute necessity to provide multiple methods for donor feedback.

• Develop new and more appropriate measures of performance.  Efficiency and cost of fundraising sucks as a measurement of anything.  There are far more appropriate measures.

• Develop the self-regulation of fundraising. Ethics be damned.  There’s a whole host of scum bags out there. But, we can do something about them.

• Encourage the adoption of monthly giving. No shit! Serious Monthly Giving or Sustainer programs produce 600% – 800% more revenue. Get to it. Now!

• Improve the sector’s engagement with young people. This is a loser, from a fundraiser’s perspective. But the report does have some good suggestions. Check ‘em out.

• Encourage and promote best practices in social media.  Importance of social media isn’t $, it goes to building loyalty and commitment.

• Encourage asset-based giving. The Report claims that 93% of a person’s giving potential is realized with a bequest or other planned gift.  Get  at it!

• Develop expertise in broadening participation in giving. Pretty weak tea. Don’t spend much time on this unless you need a kumbaya moment.

• Improve the quality of bequest fundraising practice. Death is our friend. But, with at least 8% of our donors willing to make a bequest, this just has to be taken out of the incompetent (marketing-wise) hands of planned giving officers and placed in the hands of those capable of selling.

• Challenge the wealthy to plan their own philanthropy. Stop bitching. The rich are rich and they’re gonna do pretty much what they want. This section of the report seems to think that enlightened advisors to the rich will help. Not!

• Create a nonprofit mutual fund. Nothing new here given the prevalence of donor advised funds at virtually every fund manager like Fidelity or Vanguard. Not sure what new is recommended. Fuzzy at best.

• Leveraging companies to promote philanthropy. Not sure that this adds much to the body of knowledge re employer matching, cause related marketing, etc, but well to keep in mind for that afternoon you have nothing better to think about.

• Invest in fundraising research institute. Seems  a bit self-serving to me, but because we’re also in the donor research biz. I guess it can’t hurt.

• Redesign the system of professional development and certification for fundraisers. Important stuff here. Knowledge and understanding of donor behavior is key for the future, not the number of AFP merit badges.

• Encourage the development of academic qualifications in fundraising. Jesus! They want to put in a curriculum for fundraising. I couldn’t disagree more, but you may have other ideas. I would simply settle for the fact that more than 50% of all fundraisers understood math or even simple arithmetic..

• Appoint a “sales force’ for the fundraising body of knowledge.  Ignorance is bliss (as is the case for too many CEOs and fundraisers), but this recommendation to gather best practices and the knowledge within the trade is spot on.

• Call out institutions offering certificates purporting to be qualifications. “Hey Mom, I’m  now a certified fundraiser.” An interesting discussion on stopping faux degree or course offerings by some colleges and universities.

• Educate board members about the intricacies of fundraising.  Among all the barriers to successful fundraising and philanthropy, the ‘board’ is the mightiest barrier and pain in the ass. This report rightly targets the boards for education and improvement.

Thanks for reading all this.  And it’s just the summary. Do yourself, you CEO and Board, a big favor and download (and read) the full report.

Roger

P.S. By the way, Adrian Sargeant and Blackbaud, you both deserve a raise.

The headline flagged that the Met had raised $182 million in donations. This amount was fully 50% more than it had raised just the year before.

Now there’s a success story for you!

Unfortunately the article delivered no specifics into how the Met pulled this off. The only additional details were that about half the amount was in pledges, and that the contributions came from 49,100 donors.

Obviously the Met has one hell of a high-dollar fundraising program, benefiting from a proximate audience overflowing with wealth even in weak economic times.

By the way, the math works out to an average gift of $3,707. Eat your heart out! That means a heap of six and seven figure gifts.

The article did however convey some key background points.

First, the Met director, Peter Gelb, had embarked on a strategy based on spending money to make money. A risky call in view of the Met’s overall fiscal condition.

Second, that money went into improving the product and expanding its reach (via High Def theater distribution), implementing an ambitious vision.

Perhaps three fundraising insights here.

1. To grow revenue you do need to invest more … sometimes risky, but no way around that law of nature.

2. The quality of the product matters.

3. Vision matters … and big visions (credibly grounded) score the most points.

Tom