Most churches see giving rebound

A bigger share of churches in the U.S. saw giving grow in 2011 after plunging in the wake of the economic collapse in 2008, while a smaller share saw giving decline, with bigger churches more likely to see increases, a new survey says.

Fifty-one percent of over 1,360 congregations responding to an online survey saw giving increases, up from 43 percent in 2010 and 36 percent in 2009, while only 32 percent saw declines, down from 39 percent in 2010 and 38 percent in 2009, says the 4th-annual State of the Plate survey.

Over 70 percent of mega-churches, or those with over 2,000 people in weekend attendance, saw giving grow, compared to only 39 percent of churches with fewer than 100 people in weekend attendance, says the survey, a collaborative research project of Maximum Generosity ministry, Christianity Today, and the Evangelical Council for Financial Accountability, or ECFA.

Among churches that saw increases, 50 percent said it mainly was the result of higher attendance, while 42 percent said it was because people gave more after their church conducted teaching initiatives on finance and generosity.

Nearly 55 percent of churches in the region that includes Missouri, Montana, Iowa, North Dakota, South Dakota, Kansas and Nebraska saw giving grow, while 38 percent of churches in the region that includes California, Oregon, Washington State, Alaska and Hawaii reported declines in giving, marking the third time in four years those states saw decreases.

Still, 45 percent of churches in Pacific Coast states saw giving grow, wiule 17 percent reported giving was flat.

Among churches with more giving, 40.3 percent are using the extra funds for staff pay raises, 36.5 percent are paying for missions, 35.3 percent for church buildings, and 31.1 percent for benevolence.

Churches also are shifting from traditional “envelope packets” to electronic giving, with 41 percent of churches, for example, using online giving and 7 percent using cell-phone giving.

The survey also found a lot of churches using a range of practices and procedures to ensure financial transparency and accountability.

Among churches surveyed, 92 percent make their financial statements available to members on request, and 89 percent provide copies of their annual budget to their congregation or make them available on request, while 86 percent of church boards consist of five or more people, with at least three of them not a pastor or staff member, or related to either.

Raleigh Rescue Mission faces shortfall

By Todd Cohen

RALEIGH, N.C. – The Raleigh Rescue Mission expects to fall $256,500 short of its projected budget of $3.6 million for the fiscal year that ends August 31, a shortfall it says puts at risk its services for poor and homeless people.

The agency, which was founded in 1961 and serves over 300 individuals a year and employs 39 people working full-time and 12 working part-time, already is closing a program that has provided medical-respite care to about 75 people a year for the past six years.

Ending that program, which serves each client for two to three weeks after they are discharged from a hospital and before they go back on the street, will eliminate three jobs at the agency, says Lynn Daniell, executive director.

And in September, the agency will eliminate a position that focuses on securing major gifts from donors, Daniell says.

“We’re trying to avoid cutting the core,” he says.

Core programs at the Raleigh Rescue Mission include rehabilitation and recovery services that provide 75 beds for men, women and children who typically stay six months, along with support services, plus emergency services that provide another 28 beds in a shelter for women who are mainly single and typically stay one night.

Daniell says the budget shortfall is the result of the economic downturn that has led to smaller grants from foundations and less support from individuals.

As part of its rehabilitation and recovery services, the agency provides food, shelter and clothing, and an adult learning center that offers computer classes and money-management classes.

It also serves as a site for Wake Technical Community College, offering high-school-level classes for its clients and for community residents.

And it provides a children’s development center for children of women in its rehabilitation and recovery program, and for children in the community.

That pre-school day-care center serves 14 children.

“We don’t want to cut back on education,” Daniell says.

To raise more money, the Raleigh Rescue Mission has mailed a special appeal to nearly 100 individuals who have been long-term supporters and “who would want to know we have this shortfall,” Daniell says.

And the Fred Smith Company in Clayton has agreed to sponsor a golf tournament on May 2 at Riverwood Golf Course in Clayton, and has indicated it wants to sponsor the event on an annual basis, Daniell says.

“One of the reasons we’re reaching out in the community is because we have such need,” he says “and we know that the services that we provide are making a difference and have an impact on our community.”

Funding for water growing but slim

More organizations throughout the world are getting grants from more foundation for water-related projects, yet foundation funding for those projects still represents only a tiny share of all international grantmaking, a new research brief says.

The number of foundations awarding grants for water, sanitation and hygiene, or WASH, projects grew to 78 in 2010 from 24 in 2003, while the number of organizations receiving those grants grew to 127 from 26, says Foundation Funding for Water, Sanitation, and Hygiene, a research brief from the Foundation Center.

Funding for those projects, which totaled $5 million in 2003, peaked at $122 million in 2007, thanks mainly to a four-year, $27 million grant from the Bill & Melinda Gates Foundation to International Development Enterprises.

Still, water-related grants as a share of international grantmaking overall grew to only 1.7 percent in 2010 from 0.2 percent in 2003.

Africa received 30 percent of all water-related grant dollars in 2009 and 2010, the biggest share of any region, compared to 18 percent that went to Asia and 9 percent that went to Central America and South America.

Twenty percent of water-related grant dollars from foundations, the biggest share, supported water-sector policy and administration, compared to 17 percent for basic drinking-water supply and 14 percent for each research and for basic sanitation.

“Worldwide, 780 million people do not have reliable access to clean water, and a staggering 2.5 billion, including nearly 1 billion children, do not have adequate sanitation,” the brief says. “The repercussions are severe and far-reaching.”

Diseases from unsafe water and lack of basic sanitation kill more people every year than all forms of violence, including war, the brief says.

In several sub-Saharan African countries, it says, over 25 percent of the population must travel more than 30 minutes to the nearest water source.

And lost productivity and increased health care costs “take a heavy economic toll,” it says, with Africa alone experiencing economic losses of $28 billion a year, or about 5 percent of gross domestic product, as a result of a lack of safe water and inadequate sanitation and hygiene.

“Changing this reality will require the collective efforts of governments, corporations, nonprofits, and organization philanthropy,” the brief says.

Crisis Assistance aims to engage major donors

By Todd Cohen

CHARLOTTE, N.C. — During the recession, the number of families that Crisis Assistance Ministry served at least doubled to over 200 a day from over 100.

The agency, which provides emergency financial assistance, a free store and free furniture, also raised millions of dollars in one-time gifts to address critical needs fueled by the recession, says Carol Hardison, its CEO.

While the recession is over, “there’s still great need,” she says, “but the one-time gifts are gone.”

To address continuing demand for its services, Crisis Assistance has revamped the way it works with donors, aiming to help them better understand the needs of people in crisis, and to engage them in the work of the agency.

Operating with an annual budget of $17 million, the agency in the fiscal year ended June 30, 2011, provided financial assistance to 22,000 families, served over 13,000 families through its free store, and served about 2,000 families through its furniture bank.

Crisis Assistance generates $10.5 million in revenue from government contracts, plus another $2 million in donated clothing and furniture that it distributes.

It also raised $5 million in contributed income, including $2 million from individuals, $1 million each from religious congregations and foundations, and $500,000 each from businesses and United Way of Central Carolinas.

Traditionally, Crisis Assistance has raised money from individuals through direct-mail appeals, and average gifts tend to be modest.

In the end-of-year holiday season in 2011, for example, average gifts from new donors totaled about $250, says Michelle Hamilton, the agency’s chief advancement officer.

But Crisis Assistance last fall launched a new effort to raise major gifts, or those of $10,000 or more.

As part of that effort, Hardison and Hamilton together took a class at the Leadership Gift School.

Directed by Charlotte fundraising consultant Karla Williams, the school brings together the executive directors and development directors of 12 local nonprofits one day a month for eight months and focuses on how they can do a better job raising major gifts from individuals.

Crisis Assistance also has reallocated one of its fundraising positions to focus on “major” gifts, or those of $10,000 or more, and embarked on a strategy to cultivate all individual donors.

Building on a longstanding practice, for example, every donor receives a thank-you letter and phone call.

Depending on the size of the gift, the person making the phone call may be a volunteer, a member of the development staff, Hardison or the board chair.

The caller also will ask why the donor made a contribution, might follow up with a personal visit, and might invite the donor to visit the agency, possibly for the family volunteer day it has begun holding on the third Saturday of each month.

“It’s a terrific way for us to get to know donors, for them to get to know the agency, and for them to see our building and what we’re doing with their investment,” Hamilton says.

Crisis Assistance also will be making personal visits to prospective major donors, and has been upgrading its technology to more effectively process and acknowledge gifts and track its relationships with donors.

The new strategy seems to be working.

In the fiscal year during which Hardison and Hamilton took the class, Crisis Assistance received gifts of $10,000 or more from 39 donors, and it is on track in the current fiscal year to increase that total.

And in recent months, it received a $100,000 gift from a donor whose largest gift had been $50,000.

This spring, the agency will launch a “Sustainers Circle” to recognize donors who give $10,000 or more.

Hardison, who estimates she spends 65 percent of her time developing relationships with donors and prospective donors, says her job is to understand their interests.

“My job is to listen,” she says. “What community or societal problem are they interested in solving, and what is the match” with the agency.

New investment strategies vital for nonprofits

By Todd Cohen

As economic turmoil continues to stress the charitable marketplace, new investment strategies are emerging to support the social sector.

Foundations for many years, for example, have built on their traditional grantmaking through “program-related investments,” or loans, to nonprofits.

And more recently, a small but growing number of foundations have become more active investors in the capital markets, tying their investments in the capital markets to companies that are aligned with the foundations’ mission.

Over the past 10 to 15 years, “venture philanthropy” also has become a staple of many communities, with donors applying the strategies of venture-capital investing to their philanthropic investments in nonprofits, contributing time and know-how as well as funding.

More recently, private “benefit” or “B” corporations have emerged, charged with investing their assets not only in increasing shareholder value but also in producing a social benefit.

Another recent innovation are “social-impact bonds” that raise private investment capital to fund prevention and early-intervention social programs.

The bonds are backed by government, which agrees to repay investors only if the programs improve social outcomes.

According to a recent white paper prepared by Social Finance Inc. and supported by the Rockefeller Foundation, social-impact bonds can help nonprofits expand programs that have proved effective.

Because such programs should be “evidence-based,” the paper says, the bonds could spur better metrics and data-tracking on the part of nonprofits and government, and encourage government agencies to work more closely with one another.

Fueled by funds from traditional philanthropy, the capital markets and government, the social economy is becoming a vast and complex marketplace that nonprofits need to understand and operate in if they expect to survive and make a difference.

Nonprofits and philanthropic funders alike need to pay attention to emerging investment strategies, and develop relationships and partnerships across sectors that will that will put social capital to productive use in addressing our most urgent social and global problems.


Community philanthropy seen on upswing

Community giving and participation are essential for social progress and global development, and can generate increased local ownership and local accountability, new report says.

Local participation in community projects can generate increased local ownership and local accountability, says The Value of Community Philanthropy, a report from the Aga Khan Foundation USA and the Charles Steward Mott Foundation.

“Community philanthropy should be a central feature in developing civil society and enhancing the effectiveness of development aid,” the report says.

Still, despite its potential, community philanthropy is “under-developed,” says the report, which calls for a “joint program to develop the capacity of the field of community philanthropy” so it can more effectively partners with foundations and development agencies.

That program, it says, should “strengthen the infrastructure, build key links between partners, and enhance technical features,” such as “definition,” performance and evaluation.

It also should aim to increase the pool of funders and “raise awareness of community philanthropy among official development aid practitioners for whom it is presently invisible,” the report says.

Community philanthropy, or “local people helping each other, by sharing resources for the common good,” is a new force in the charitable world that is “driven by ordinary people working from the bottom up of our societies, rather than wealthy people working from the top down.”

That kind of giving, it says, “has the potential to transform how philanthropy works and in the process help to solve some of the deeper problems in our society, such as poverty, racism, and gender equality.”

The Worldwide Initiative for Grantmaker Support, for example, has charted the growth of community foundations throughout the world over the last 10 years, finding an average of 70 new community foundations a year.

Nearly all that growth has been in North America and Europe, it says, but there also is an “underlying ferment of activity” in other parts of the world.

Community philanthropy is “organized and structured” and “self-directed,” uses “open architecture” so that “anyone can design add-on products,” and operates in civil society, the report says.

It also uses its own money and assets, it says, and is rooted in “values.”

Community philanthropy also is “based on a voluntary impulse embedded in the human condition,” the report says.

It also says community philanthropy has important benefits than can assist development processes.

“When local people act as donors, the hierarchical structure at the heart of development aid breaks down,” the report says.

An “inclusive, non-hierarchical structure,” it says, “can be transparent and accountable, as well as trusting and respectful,” rooted in “true partnerships that promote lateral processes as opposed to top-down relationships.”

Using such “lateral” processes, the report says, community philanthropy “breaks down boundaries between people, taking account of place, issue and identity.

A key element of community philanthropy is “help the other but help the other help the other,” so that “each act of philanthropy begets other acts of philanthropy,” the report says.

That kind of approach “has real potential to work with communities within communities and, in the process, involve the most excluded,” it says. “Such collective activity carries powerful messages for collective ‘within-group’ and ‘between-group’ processes in society, containing the potential to resolve conflicts, build harmony, and develop an equitable frame of reference for the d development of progress within society.”

Making progress in community philanthropy as a “mainstream force in building sustainable civil society and improving the effectiveness of development aid” will require “joining up different parts of the field that are presently disconnected,” the report says.

While community philanthropy “tends to operate from the bottom up, with local actors taking the initiative” and “aiming to influence the way central authorities behave,” it says, most international development “tends to operate from the top down, as a central agency disperses resources to a range of local actors.”

But evidence suggests that both top-down and bottom-up approaches are important, and that “neither is sufficient to deliver progress on its own,” the report says.

“Indeed, what often determines success is what happens at the point at which top down meets bottom up,” it says. “This is the point where outside intervention meets inside culture.”

The report calls for the field of community philanthropy to take five main actions to strengthen itself, including “using clear definitions, metrics and data analysis to demonstrate what works;” mobilizing a “critical mass of people as part of a process of participatory democracy in favor of the common good;” joining “top-down efforts with the views of beneficiaries of programs;” finding “complementary roles for different actors to ensure the sustainability of civil society and the effectiveness of development aid;” and developing “a constructive engagement using plain language.”