|
847/375-4836
Katrina, Tsunami Lessons Can Drive Haiti Fundraising
Giving Institute, Giving USA offer Advice
Glenview, IL (Jan. 18, 2010) – How much will Americans end up donating to the Haitian earthquake relief efforts? If past disasters like Hurricane Katrina and the Asian tsunami provide guidance for today’s efforts, the result is likely to be in the billions.
In 2006, for example, Giving USA Foundation reported that American individuals, corporations and foundations donated $7.37 billion in 2005 for disaster relief in the aftermaths of the hurricanes that struck the Gulf Coast of the United States, the Asian tsunami and an earthquake in Pakistan. An additional $1.17 billion was raised for hurricane relief in 2006.
And just as of today, the Center on Philanthropy at Indiana University reported that $189.9 million has been donated to 43 organizations for relief efforts. This tracks with the five-day fundraising response to the Asian tsunami and the 2005 hurricanes.
Giving USA Foundation and Giving Institute: Leading Consultants to Non-Profits, urge citizens to give wisely yet cautiously. The two organizations, headquartered in Glenview, Ill., have been tracking charitable contributions since 1954, and also provide advice to non-profit organizations around the world. The emotionally draining images being broadcast are riveting and striking, and bolster the natural desire of Americans to respond to need; they donated an estimated $307.65 billion to charity in 2008.
Facts are hard to come by right now from the island nation of Haiti, and they keep changing hour-by-hour as the world tries to come to grips with the devastation suffered there in the aftermath of the 7.0 earthquake last Tuesday. Americans—generous by nature–are looking for the best ways to aid those who need it most.
Looking to lessons learned in the aftermath of recent disasters, Institute Chair Nancy L. Raybin, speaking on behalf of the Giving Institute member firms, and Foundation Chair Edith H. Falk, speaking for the board of the Foundation, offer advice to both nonprofits working in the trenches of relief efforts and to Americans who want to help.
First, for relief organizations, don’t overlook corporate partners. Corporations donated $1.38 billion in 2005 for disaster relief efforts. While, as always, the bulk of donations came from individuals ($5.83 billion in 2005), companies can have a role to play in this most-recent crisis.
If past is, indeed, prologue, then the bulk of the donations will go to human service organizations providing for basic needs, such as the Red Cross. For smaller organizations that do not have the same high profile as the Red Cross, getting your message out to donors will be difficult, but not impossible. With this crisis, electronic communications such as text messaging, Facebook, twitter and email seem to be driving the appeals process; use these tools to alert potential donors of the work you do, and provide back-up information on your Web site. Make it easy for potential donors to feel comfortable that their contribution is going to be used responsibly.
For individuals looking to do the most good with their dollars, the two groups provide the following advice:
- Check out the charity through groups such as Guidestar, www.guidestar.org, and the Better Business Bureau, www.bbb.org, to ensure they are legitimate
- Donate to reputable organizations that are known for their expertise in times of disaster and making sure that money gets to the right places
- Investigate how a charity intends to spend the dollars raised and who will cover the administrative costs. Don’t avoid giving to charities that will use some donations for administrative costs; it takes resources to manage and distribute contributions responsibly. But look for nonprofits that direct at least 75 percent of gifts to programs.
- Read the guidelines published by the White House at http://www.whitehouse.gov/HaitiEarthquake to find out the best ways to help victims and groups that are helping those affected by the earthquake
- Resist the urge to go to the damaged area to provide help; watch for news of requests for volunteers. At this time, volunteers are being actively discouraged from trying to travel to Haiti
- Those looking to donate time, supplies or funds should contact the Center for International Disaster Information (CIDI) at 703/276-1914, or visit them online at http://www.cidi.org/incident/haiti-10a/
“The news coming out daily just reinforces the need for America to help its island neighbor,” said Raybin. “We at the Institute stand ready to advise charities on their best plan of action now during this time of turmoil and tumult and over the next several months.”
Added Falk, “As the source for data on charitable giving, we will be watching closely to see how America responds to this tragedy in the coming weeks and months, and to what degree social media influences giving.
“Of course, just like with past disasters, once the earthquake news is replaced by other headlines, the need will continue to exist, so we encourage Americans to give thoughtfully and often.”
About Giving USA FoundationTM Originally formed by the American Association of Fundraising Counsel (now Giving Institute: Leading Consultants to Non-Profits) as the AAFRC Trust for Philanthropy in 1985, Giving USA Foundation has as its mission to provide education and knowledge about charitable giving in the United States. For more than 50 years, the Institute and/or Giving USA Foundation has published the annual report Giving USA, which provides data on who gives what to whom in America. For more information on the Foundation and its research, visit www.givingusa.org.
About Giving Institute: Leading Consultants to Non-Profits Giving Institute: Leading Consultants to Non-Profits, an international association of leaders in the philanthropic consulting field, is headquartered in Glenview, Ill. Its 35 member firms have specialties in all areas of non-profit consulting, including fundraising, executive search, capital campaigns, feasibility studies and marketing communications. Its mission is to advance the practice of philanthropy through research, education and best practices. Formerly known as the American Association of Fundraising Counsel, it was founded in 1935 and is know for, among other things, composing the industry’s first code of ethics, a code still used today. For more information, visit www.givinginstitute.org.
About Smith Beers Yunker & Company A member firm of the Giving Institute and the Better Business Bureau, Smith Beers Yunker & Company, is a full-service management and fundraising consultancy with the mission of Helping Others Make A Difference®. Available services include leadership development, annual and capital fundraising planning and guidance, strategic planning, executive search and volunteer coaching. For more information, visit www.sbyco.com
What will the Obama budget do to charitable giving?
Giving Institute, Giving USA weigh in on proposal
Glenview, Ill. (February 26, 2009) -- President Barack Obama’s sweeping budget proposal hit the news today, with one key element centering on charitable deductions made by those households earning more than $250,000 per year.
The Giving Institute: Leading Consultants to Non-Profits, and its research arm, Giving USA FoundationTM, advise those working in the philanthropic field that Obama’s proposal to trim the deductibility of charitable donations from the current 35 percent to 28 percent over time is not necessarily going to change giving patterns of generous Americans.
Here are some facts to consider, according to research conducted on behalf of Giving USA:
- About 3 percent of tax returns in 2006 had of income $200,000 or higher. (This equates to approximately 3.4 million households. 2006 is the most recent publicly available data.)
- Tax returns with income of $200,000 or more claimed 42.5 percent of the total amount itemized in 2006.
Therefore, high-income earners are important donors, said Nancy Raybin, chair of Giving Institute; “however, we know from many research studies that have been conducted that not all they give is actually deducted.”
One study, by Paul Schervish at Boston College, said Giving USA Managing Editor Melissa S. Brown, showed that people don’t even track all of their donations because they hit income caps, or the Alternative Minimum Tax, or some other threshold that makes the actual value of the deduction for a charitable gift not worth the trouble of keeping the information.
“It’s interesting to note,” Brown said, “that a Bank of America study released in 2005 of high net-worth individuals said that 53 percent said they would not change their charitable giving, or would even increase it, if the deduction for charitable gifts went to zero.
“However, there is research that shows that people do change the amount that they claim in their giving when tax rates change. Higher tax rates mean more giving is itemized, everything else being equal,” she added.
“It is likely that when tax rates are high, at least some people will work harder to keep track of their giving and find it more worthwhile to submit the information to accountants so it shows up on returns,” said Del Martin, chair of Giving USA Foundation. “It is also possible that some people, when asked to give, do determine some kind of cost-benefit analysis and look at the potential tax savings.”
However, the experience of Giving Institute members, who serve more than 5,000 non-profit clients annually, has shown time and again that the most important factor in how much people give is how committed they are to the purpose of the request.
“The bottom line is that this is no time for panic in the non-profit world,” both Martin and Raybin said. “Time and time again, it has been shown that when wealth is created, giving increases. If the president’s plan generates more wealth for Americans, then giving will go up.”
About Giving Institute: Leading Consultants to Non-Profits
Giving Institute: Leading Consultants to Non-Profits, an international association of leaders in the philanthropic consulting field, is headquartered in Glenview, Ill. Its 35 member firms have specialties in all areas of philanthropic consulting, including fundraising, executive search, capital campaigns, feasibility studies and marketing communications. Its mission is to advance the practice of philanthropy through research, education and best practices. Formerly known as the American Association of Fundraising Counsel, it was founded in 1935 and is know for, among other things, composing the industry’s first code of ethics, a code still used today. For more information about the Institute, visit www.givinginstitute.org.
About Giving USA FoundationTM
Giving USA Foundation, headquartered in Glenview, Ill., has as its mission to advance philanthropy through education and research. It was formed in 1985 as the American Association of Fundraising Counsel Trust for Philanthropy by what is now known as the Giving Institute: Leading Consultants to Non-Profits. Its seminal publication, Giving USA, has been published continuously since 1956 and is considered the “bible” on who gives what to whom in America. For more information about the Foundation and its work, visit www.givingusa.org.
Nonprofits won't see grants cut
By Mark Curnutte
mcurnutte@enquirer.com
In the face of the recession and shrinking sources of funding, nonprofit organizations in Greater Cincinnati and Northern Kentucky received some good news: The Greater Cincinnati Foundation will keep its funding levels steady for the next three years.
Foundation president Kathy Merchant made the commitment at a Ohio grant-makers forum last week to continue to provide nonprofit organizations with more than $40 million a year, The Enquirer learned Thursday.
The Greater Cincinnati Foundation, a community foundation, manages the charitable activities of hundreds of individuals and dozens of companies throughout the region and distributes grants to nonprofit education, social service, arts, faith-based and other groups.
The 2008 giving year was the largest in foundation history, Merchant said, even though the foundation's asset base - like those of many companies, nonprofits and individuals - has lost ground because of the stock market decline.
The foundation's endowment shrunk from $500 million at the end of 2007 to roughly $320 million. But its percentage of grant-giving is based on a five-year average, not a one-year result of the stock market. So its giving stayed flatter during the boom times, allowing it to keep money for leaner times.
Foundation officials say they hear from nonprofits that demand is up 30 percent to 40 percent because of layoffs and lost insurance benefits.
The foundation's commitment came as good news Thursday to nonprofit recipients, large and small.
"It means they've done a great job managing the community's assets," FreestoreFoodbank president and CEO John Young said.
"We're going to need all the help we can get because of the diminished opportunity for state and local government funding, coupled with the increased need of people affected by the economic downturn."
At the Center for Respite Care in Avondale, a 14-bed recovery center for homeless people who have had major medical procedures, "I've been encouraged by the wonderful, creative ways people have found to continue helping their neighbors during these tough times," said executive director Mary Beth Meyer.
The Greater Cincinnati Foundation ranks among the 30 largest such public foundations nationwide in terms of donations, assets and grants provided.
"We'll have a flat budget, if nothing else," said Ellen Gilligan, Greater Cincinnati Foundation's vice president for community investment.
Most of the charitable money given in 2007 - more than $36 million - by the foundation was targeted by individual, family and corporate donors. Another $4 million-plus was made in foundation grants without restrictions.
The largest percentage of money goes to nonprofit education groups. Human services, downtown Cincinnati, city neighborhoods and arts organizations also are major beneficiaries of philanthropic money managed by the foundation.
In the wake of tougher economic times, the foundation has enlisted a broader base of volunteers to help it analyze grant requests and attempt to maximize the impact of programs.
The smallest grants, $1,000, go to neighborhood groups for summer programs for children and to teachers to enrich their classrooms. The largest grants go for work-force development, long-term commitments to public education and police-community relations around issues of racial equity.
In the middle are grants of $5,000 to $100,000 that go to targeted areas such as arts and culture, community development and health and human services.
The Greater Cincinnati Foundation also stepped out of its normal practices in 2008 and allotted $236,000 to create the Heat or Eat program. It provides emergency food, heat, rent and utility assistance.
Grants were made to food pantries and other nonprofits in the foundation's eight-county service area. An additional $20,000 was committed to the Northern Kentucky Emergency Cold Shelter, the only one of its kind in Boone, Kenton and Campbell counties.
The foundation received an additional $300,000 in support for the program from outside sources since Thanksgiving.
"We didn't wait to read in the headlines that things were getting worse," Gilligan said.
Additional Facts
About the foundation
In 2007, the Greater Cincinnati Foundation, its donors and private foundation clients invested $41.5 million in nonprofit agencies in Hamilton, Clermont, Butler and Warren counties in Ohio; Kenton, Campbell and Boone counties in Kentucky; and Dearborn County in Indiana.
The breakdown:
$14.5 million in education; public and private, preschool through post-secondary.
$6.6 million in human services.
$5.8 million to improve physical and economic conditions in downtown Cincinnati and other city neighborhoods; including efforts to improve race relations.
$5 million to arts and heritage organizations.
$3.9 million in donor-advised grants (donors target the money) to religious institutions.
$3.9 million to health-care providers.
$1.8 million to improve the environment.
Source: Greater Cincinnati Foundation
Bank of America Announces Initial Findings of 2008 Study of High Net-Worth Philanthropy
Wealthy Donors Cite Loss of Emotional Connection as Leading Reason for Discontinuation of Giving to a Charitable Organization
BOSTON – Nearly 60% of wealthy households who stopped giving to a charitable organization attributed their change in philanthropic behavior to “no longer feeling connected to the organization,” according to initial findings released today from a new survey initiated by Bank of America.
The 2008 Bank of America Study of High Net-Worth Philanthropy reflects the opinions of nearly 700 respondents throughout the United States with household income greater than $200,000 and/or net-worth of at least $1,000,000. Conducted by The Center on Philanthropy at Indiana University for Bank of America, the 2008 research follows an initial landmark study published through this partnership in 2006.
Key insights gleaned from the new study – the full version of which will be released in the first quarter of 2009 – indicate that wealthy donors are giving more strategically and are increasingly turning to legal and financial professionals as primary sources for advice about charitable giving decisions. Additional noteworthy themes to emerge include:
- Desire to “give back to the community” the leading motivation for giving, while “public recognition” essentially a non-factor
- Donors believe charitable contributions have a greater impact on their personal fulfillment than on the organizations they support
- Families use involvement to pass philanthropic values on to the next generation, who in turn give through their own private foundations or donor-advised funds as adults
- Religious organizations second only to parents as a leading source of philanthropy education
- Transparency, accountability and protection of privacy among donors’ primary expectations of the non-profit organizations they support
“Our wealthy clients are taking a more proactive approach to integrating philanthropy into their wealth management strategies,” said Cary Grace, Bank of America National Institutional Advisory Solutions Executive. “We are noticing that the turbulent economic environment has, not surprisingly, also motivated these individuals to play a more active role in charitable decisions in terms of what they give, to whom and when. Our 2008 research breaks new ground and uniquely positions our philanthropic management experts across the country to help facilitate greater understanding and communication between these important donors and the non-profit institutions they support.”
The original 2006 study – which has become a leading resource for the philanthropy industry for understanding the philanthropic behaviors of wealthy donors – was the first proportionally random study of high net-worth charitable giving and the largest survey of wealthy Americans ever conducted on this topic. The new 2008 study is the result of randomly surveying over 20,000 households in high net-worth neighborhoods across the country. The new research was conducted in the same manner as the initial study in order to identify key trends and to provide even deeper insights into the motivations and attitudes of America’s wealthiest donors.
HIGHLIGHTS OF INITIAL FINDINGS:
The 2008 Bank of America Study of High Net-Worth Philanthropy will track significant shifts as well as certain consistencies among the giving behaviors of the wealthiest donors, and is expected to offer valuable insight to non-profit organizations hoping to attract, sustain and deepen relationships with these donors. Among the initial findings released today:
- Locally and personally motivated, with little need for public recognition. Wealthy philanthropists’ motivations for giving demonstrate a strong desire to “give back to the community” (81.2%) and to make an immediate difference (66.9%) in the world around them, according to the survey. Other leading motivations include these individuals’ social (70.4%) and political (58.5%) beliefs, as well as their loyalty to certain causes and organizations (70.7%) – many of whose missions seek to remedy an issue that may have affected the donor personally or someone close to them (57.5%). In a continuing trend from the 2006 study, only 5% of wealthy donors said they are motivated to give based on public recognition; in fact, public recognition of a gift ranked among the least important factors when donors consider which charitable organizations to support, with just 10.2% of donors citing this as important.
- Trying to make an impact. Wealthy donors believe that their charitable contributions have a greater impact on their own personal fulfillment (46.0%) than on those who receive their gifts. Just less than 20% of donors believe that their donations make a major impact on the organizations they support, and only 6.1% believe they’re making significant contributions to the improvement of society in general. However, wealthy individuals said the leading objective for their largest gifts to charitable organizations last year was “general operating support” (56.7%). Start-up funding (10.1%) and venture philanthropy funding (2.5%) were among the least common recipients of the largest donations last year.
- Raising philanthropic children. According to the survey, “setting an example for children or other young people” is also an important motivator for donors (45.6%), with more and more parents actually involving their young and adult-age children in decisions about grant-making (40.8%) and the charitable organizations they choose to support (53.2%). In fact, the vast majority (95.9%) of the next generation of philanthropists learn about philanthropy and the value of giving from their parents, with more than 60% of wealthy donors actively educating their children about philanthropy. Taking these matters into their own hands, adult-age children of nearly 40% of wealthy families surveyed now give through their own private foundation or donor-advised fund.
- Religion’s role in philanthropy. Approximately half (51.0%) of those surveyed cited “religious beliefs” among their top motivations for giving. Nearly 70% of wealthy households receive information about charitable organizations from religious institutions, and approximately 80% indicated that their children learned about giving in part through programs offered by these institutions.
- Great expectations. In a continuing trend from the 2006 study, the 2008 research finds that wealthy donors have high expectations of charitable organizations, ranking the following factors among those most important when determining which to support:
- Sound business practices (93.0%)
- Spend appropriate amount on overhead (88.3%)
- Acknowledgement of contributions (including receipts) (83.7%)
- Protection of personal information (82.7%)
- Full financial disclosure (77.7%)
- Why did my wealthy donors go away? In 2007, 38.0% of donors stopped supporting a charitable organization, with more than one-quarter of those surveyed (26%) discontinuing support for at least two organizations. The top three reasons why donors stopped giving to a particular charity include “no longer feeling connected to the organization” (57.7%), “deciding to support other causes” (51.3%) and “feeling they were being solicited too often” (42.3%). Very few donors, however, said that they stopped giving to an organization because of “mismanagement of donations” (12.7%), “mismanagement of assets” (6.7%) or “inaccurate record keeping of donations” (5.3%) – indicating that the majority of organizations that these wealthy donors support demonstrate sound business practices, perhaps one reason why more than 70% of donors give to the same organization year-after-year.
- Strategic use of charitable vehicles. Among the many reasons for establishing one or more charitable vehicles are a desire for control over how dollars are used and personal financial benefits such as maximizing income tax deductions and avoiding capital gains and estate taxes. As a result, donor-advised funds, while still a relatively new vehicle when considering all that are available, have become one of the preferred giving vehicles utilized by donors, with more than 20% of survey respondents currently using them and another 20% who would consider using them in the next three years. In addition, approximately 56% of wealthy donors today have a charitable provision in their will – a total that could climb to a staggering 93% in 2010, with an additional 37% of donors saying they would consider establishing a charitable provision in their wills the next three years.
- Major shift in the source of charitable advice. One of the most striking differences between findings from the 2006 and 2008 studies is the dramatic increase in donors’ use of legal and financial professionals to help them make charitable giving decisions. Our 2006 study found that donors relied on non-profit personnel (41.2%) and their own peers (35.9%) more than any other source for advice in this area. Our 2008 data finds accountants (43.2%), attorneys (41.7%) and financial/wealth advisors (32.6%) to be among the leading sources of charitable advice.
“This study includes some good news for charities in these difficult economic times,” said Patrick M. Rooney, interim executive director of the Center on Philanthropy at Indiana University. “The findings indicate that these donors are committed to the ongoing success of the non-profits to which they contribute. In fact, the top two objectives for the largest gifts they made in 2007 were to provide general support for the non-profit and to make a long-term investment in the organization. This should offer charities hope of continued vital support from these loyal donors at a time when it is much needed.”
Bank of America, one of the nation’s largest corporate donors and provider of a full array of charitable services to wealthy individuals and non-profit institutions, sponsored the study.
The Center on Philanthropy
The Center on Philanthropy at Indiana University is a leading academic center dedicated to increasing the understanding of philanthropy and improving its practice worldwide through research, teaching, training and public affairs programs in philanthropy, fundraising, and management of nonprofit organizations. More information is available at www.philanthropy.iupui.edu.
Bank of America Philanthropic Management
Bank of America Philanthropic Management delivers expertise and comprehensive services to help clients build and sustain their philanthropic missions. The company leads the industry in serving both individual and institutional clients by seamlessly integrating philanthropy into their broader financial relationships. Bank of America serves as grant-making agent, trustee or co-trustee for over 2,000 private foundations, and advises more than 10,000 clients nationwide who entrust the company with over $30 billion in assets, as of December 31, 2007.
Bank of America
Bank of America is one of the world’s largest financial institutions, serving individual consumers, small and middle market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk-management products and services. The company provides unmatched convenience in the United States, serving more than 59 million consumer and small business relationships with more than 6,100 retail banking offices, more than 18,000 ATMs and award-winning online banking with more than 25 million active users. Bank of America offers industry leading support to more than 4 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients in more than 150 countries and has relationships with 99 percent of the U.S. Fortune 500 companies and 83 percent of the Fortune Global 500. Bank of America Corporation stock (NYSE: BAC) is a component of the Dow Jones Industrial Average and is listed on the New York Stock Exchange.
www.bankofamerica.com
###
The information provided is based on the 2008 Bank of America Study of High Net-Worth Philanthropy, researched by The Center on Philanthropy at Indiana University. Bank of America cannot confirm or guarantee the accuracy or completeness of the analysis provided in the study. Key findings referenced do not represent the entire findings in the study.
Always consult with your independent attorney, tax advisor, investment manager and insurance agent for final recommendations and before changing or implementing any financial, tax or estate planning strategy.
© 2008 Bank of America Corporation. All Rights Reserved.
Issue 3 of Spotlight from The Giving USA Foundation provides a reasoned look over the past 40 years about how charitable giving performs during recessions and slowdowns. The future for giving is not as bleak as the media is painting it. To obtain a copy of this report, contact The Giving USA Foundation at www.givingusa.org or call 847.375.4709.
|