Widening wealth gap a wakeup call for nonprofits

The gulf is growing between the rich and everyone else, both among Americans overall and among charities, making it clear that most charities need to do a much better job talking about the needs they address and the difference they make.

Two reports this week underscore the widening wealth gap and the challenge it represents for charities.

A new survey by the Federal Reserve says that only the wealthiest Americans have seen income gains during the economic recovery, while incomes have fallen for “very large groups of Americans,” The New York Times reports.

And a review of over 200 private universities rated by Moody’s Investors Service over 10 years shows that schools with over $1 billion in total cash and investments received two-thirds of total gift dollars in 2013, up from just over three-fifths in 2003, while those with less than $100 million received a declining share, or less than 3 percent of total gift dollars, The Wall Street Journal reports.

Implicit in the two seemingly unrelated reports are the high hurdles that charities must clear to survive.

Most of the roughly 1.5 million charities in the U.S. are small, and many face rising demand for services from Americans who have not benefited from the recovery and often live in crisis, cannot afford food, shelter or health care for their families, or day care or after-school activities for their kids. Those Americans also often lack the skills and resources they need find and keep jobs that pay a living wage.

The charities that serve those people are the same charities that often get the short end of contributions, compared to big charities with large endowments, sophisticated fundraising programs, and loyal, wealthy donors.

The silver lining in the face of all the seemingly grim news about the widening wealth gap is that the role charities play is more important than ever, and that the wealthiest Americans have even more to give.

Historically, in tough times, Americans with few resources have dug the deepest to increase their giving to help those with even less to fall back on.

The challenge for charities is to dig deeper, too, and invest more to make sure they are telling the clearest and most compelling story they can about the needs they address, the work they do, and the difference they make in the lives of the people they serve.

Charities also need to make sure they are reaching the audiences they need to reach through the channels those audiences prefer, whether social media, email, the web, direct mail, personal appeals in writing, phone calls or personal visits.

Charities have a critically important story to tell about the indispensable role they play in making our communities better places to live, work and play. Their immediate task is to make sure they tell it well so they can get the resources they need to serve people in need.

Want help?

Philanthropy North Carolina is a consulting practice that provides writing and strategic communications support for nonprofits, foundations, colleges and universities, and others working for social good.

To find out more about hiring Philanthropy North Carolina to work with your organization to improve your communications, contact Todd Cohen at 919.272.2051 or toddcohen49@gmail.com.

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