Giving grows in 2012, expected to slow in 2013

Total giving to nonprofits grew 6.7 percent to $369.23 billion in 2012, a pace that is expected to slow to 1.6 percent in 2013, when giving will total $375.13 billion, one of the slowest rates in 50 years, a new report says.

With giving to environmental causes growing 11 percent, faster than any other nonprofit field, giving last year was fueled by “robust stock market performance, an improving economy, and a few very larger individual contributions,” Rob Mitchell, CEO of The Atlas of Giving, which released the report, says in a statement.

But projected declines in the investment markets “will produce corresponding drops in giving,” he says, while discretionary income will fall as a result of a 2 percent hike in the payroll tax, affecting giving decisions by individuals and families.

And continuing high unemployment represents a “persistent detriment to giving for many Americans, a dynamic that does not impact all charities equally,” Mitchell says.

“The manner in which a given nonprofit raises money has everything to do with what effect unemployment has on gift receipts,” he says. “Organizations that rely on larger numbers of relatively small gifts from individuals are hit the hardest when unemployment is high.”

Giving to education grew 8.8 percent, as did disaster-related giving, much of it from donations in the wake of Hurricane Sandy in October.

Giving to religion, which accounted for 50 percent of all charitable donations in 2002, represented just 36 percent of all giving in 2012, a share that will drop to 35 percent in 2013, The Atlas of Giving says.

Giving to environmental causes is expected to continue its rapid growth, increasing 5.9 percent in 2013, while giving to religion is expected to decline slightly to nearly $131 billion from nearly $132 billion.

The share of giving from individuals, foundations, bequests and corporations is expected to remain the same in 2013 as in 2012 at 75 percent, 13 percent, 7 percent and 5 percent, respectively, while foundation gifts are expected to grow 4.9 percent, the most of any source, and corporate gifts are expected to fall 0.3 percent.

Mega-gifts in 2012, the report says, included $3 billion from Omaha investor Warren Buffett to charitable foundations operated by each of his three children; $499 million from Facebook CEO Mark Zuckerberg to Silicon Valley Community Foundation; $300 million pledged by Microsoft co-founder Paul Allen to his Allen Institute for Brain Science; and $200 million from Mortimer Zuckerman, the publisher and real estate tycoon, to the Mind Brain Behavior Institute at Columbia University.

Todd Cohen

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Retirement a concern for nonprofit employees

Roughly 45 percent of all employees working in the nonprofit sector are not confident with their ability to prepare financially for retirement, a new study says.

Those findings “underscore the need for the nonprofit and philanthropic sector to address their employees’ long-term financial security, create more opportunities for advancement within the sector, and look for national, cross-sector solutions,” TIAA-CREF Institute and Independent Sector, which released the study, say in a statement.

While roughly 59 percent of 1,000 full-time employees age 21 and older in the nonprofit and philanthropic sector who were polled for the study are “very or extremely satisfied” with their current employment, nearly half have considered leaving the sector to get greater compensation elsewhere, says the study, Financial Security and Careers in the Nonprofit and Philanthropic Sector.

Over 90 percent of sector employees say personal satisfaction with their organization’s mission is a “central driver” for their career decisions, but only 30 percent are “very or extremely satisfied” with opportunities for career advancement.

“The results demonstrate the need for financial planning and advice to help these employees combine the best of both worlds,” Paul Yakoboski, senior economist at TIAA-CREF Institute, says in a statement.

Diana Aviv, president and CEO of Independent Sector, says concerns about financial security “can undermine the sector’s ability to attract and retain the most talented individuals to address the tough challenges we face.”

The sector should consider “how to secure the financial future of staff and those interested in working in the charitable sector,” she says. “Financial security will make it possible for these leaders to remain in the sector over an entire career.”

The nonprofit and philanthropic sector consists of 1.6 million organizations, including charities, foundations and professional associations, and employs roughly 10 percent of the U.S. workforce, TIAA-CREF and Independent Sector say.

Todd Cohen

Data seen driving change in social economy

Digital information is playing an increasingly pivotal role in the emerging “social economy” as “doers” and “donors” look to philanthropy, political giving and impact investing to find the most effective options for putting private resources to work for public good, a new report says.

And as they compete in the social economy, which includes the broad range of “business ventures, charitable efforts, philanthropy, and investment capital geared toward producing positive social results,” nonprofits and organized philanthropy will need to be smarter about the way they share data, handle mobile payments, and deal with the issues of transparency and privacy, says Philanthropy and the Social Economy: Blueprint 2013, a report from GrantCraft.

“We are standing at a new ‘starting line’ for data in 2013,” says the report, which was written by Lucy Bernholz, visiting scholar at the Center on Philanthropy and Civil Society at Stanford University.

That starting line, the report says, “is about putting the data we have to use, looking for relationships between nonprofit/philanthropic data and larger data sets from the public and private sectors, and experimenting with new practices that start from the premise that we now have access to enough useful data that we can move on to explore what to do with it.”

While philanthropy and nonprofits play important roles in the social economy and occupy a “privileged long-term position that allows them a front row seat to the changes underway,” the report says, they “are not the unchallenged center of the economy any longer, nor should we assume that their status, impact or privileged positions are unalterable.”

The next phase for the social economy, the report says, will be driven by a new discussion about “the unique role of organizations like those we know as nonprofits and foundations.”

Data overload

In a world of “digital overload,” with foundations, donors and nonprofits “soon to be drinking from the ‘data firehose,’ the most successful organizations will be those that “figure out how to manage this and thrive within its contexts,” the report says.

Some organizations will deal with data overload “by hiring data analysts to manage data flows, analytics and learning,” while an increasing amount of data “will be made public and transparent for the rest of the sector and any curious others,” it says.

“Data are a resource like money,” it says. “They are critical to success, unevenly distributed, and fundamental to the pursuit of privately resourced, public benefit activities. They are tools for reinforcing or redistributing power.”

Yet the decades of the “information age” have gone “essentially unnoticed by most foundations at least in terms of sharing their information quickly, readily and in a form that would allow easy comparison,” the report says.

By 2009, for example, only 29 percent of foundations “had hung out their nameplate on the Internet,” it says.

That has changed, it says, with over a dozen “meaningful efforts at sharing philanthropic data,” representing “real progress toward a ‘data backbone’ for nonprofits and philanthropy.”

Second phase

With new tools for “sharing raw data and make it useful to the public,” philanthropy has entered the “second phase of a data age” that will focus on “using it ourselves,” the report says.

That phase, it says, will be marked by “finding new ways to compare, analyze and present the data; asking new questions with it; and using the information to inform out work.”

Aggregated foundation grants data now can begin to be used “in ways that simply weren’t possible before,” it says.

With access to over 170 online giving platforms, the report says, the tools that individual donors have for giving are “light years ahead of most foundation check-cutting processes in terms of real-time information, targeted feedback loops, and the ability to  galvanize additional support by reaching out to social networks.”

And, in isolation, data about foundation grants and nonprofit data from IRS Form 990 are of limited use, the report says.

“They may reveal trends in funding interests, geographic density, and patterns of shared strategy,” it says. “But they say little about either an individual enterprises’ operational strengths or the financial/operational healthy of a group of organizations. These data tell us almost nothing about an organization’s strategies or the results it is achieving, nor do they shed light on the status of the larger issue, be it health access, student reading scores, or the number of hungry elders in a community.”

Foundations and nonprofits, the report says, “still lag behind governments and business in making good use of data.”

Digital engagement

Mobile phones and other digital devices represent the next phase of giving and volunteering, the report says.

“We’ll make smaller, more frequent donations, sparked by social network requests, by tapping a bank account or credit card number with a single swipe,” it says. “Freelance fundraising for our own favorite causes or organizations will be easier.  Crowd-sourced and -funded groups will be clean beaches, feed the homeless, help the elderly, respond to disasters, all while not relying on or turning to an organization for help.”

Because mobile payments can be handled through a smart phone, the report says, the individual donor “has all the pieces of big philanthropy — information and money — in one device. The technology has leapfrogged the big institutions in favor of networked individuals.”

Those developments are “not all positive,” the report says. “Ever-smaller donations to organizations can require ever-greater organizational investments in technology to manage.”

Mobile donations and digital data also raise issues of private and security, and underscores the gap  between people with access to a smart phone and those without access.

And while “networked individuals are good at starting things,” the report says, “the jury is still out on how effective they are at maintaining services over time.”

Privacy and transparency

In the social economy, nonprofits “will be defined by how they use their data for public good while protecting the personal privacy rights of all who contribute that data,” the report says.

Initially, it says, nonprofits will define themselves through “good practice,” while later they may be defined through legal requirements.

“We will all be well served if nonprofits take a leadership role in defining and demonstrating the practices they want to see encoded in future regulations,” it says.

Nonprofits continue to earn “higher trust ratings” than business or government, the report says, and how they use personal information will influence that standing.

And as the nonprofit sector tries to catch up on data, transparency and innovation, it says, “we need to differentiate data about people from data about enterprises.”

Organizations that seek to use private resources for public good need to get the issues of “private” and “public” right, the report says.

The way that enterprises “navigate the tensions of private data and public good will become a differentiating factor for organizations in the social economy — not all will make the same choices,” the report says. “These practices and choices about data may eventually serve to distinguish and define organizations within the social economy the way financial profit motive does now.”

Regulation in the social economy

Organizations and financing systems in the social economy are “not created equal,” the report says.

“Nor should they be,” it says. “They should be complementary. For that to be possible, we need to think about accountability, governance mechanisms, the use of free labor (volunteers), the role of incentives and oversight, and information ownership.”

As politicians resume talks this year about the tax code and limiting charitable tax deductions, the report says, the nonprofit sector “will need to make new arguments to preserve those privileges.”

And those argument “should not just be standard issue self-preservation,” it says.

The political battle may be “fought narrowly over maintaining the tax deductibility of charitable gifts,” and may not include “serious discussion about the most effective ways to provide incentives for private involvement on behalf of public benefit” or any discussion of “data as a public good” or “more substantial regulatory change.”

Yet regulatory change is needed in a social economy increasingly driven by “new networks of ‘doers’ and ‘donors’ using their non-hierarchical, distributed authority, open source model of the Internet and using it for political action and community change,” the report says, citing Future Perfect, a 2012 book by Steven Berlin Johnson.

“We’re reaching a point where impact investing and philanthropy are increasingly intertwined,” the report says, an emerging hybrid characterized as “enterprise philanthropy” in From Blueprint to Scale, a 2012 study from the Acumen Fund and Monitor Institute.

“Whatever you call it,” the report says, “more and more donors and institutional funders are looking at how they can best use a dollar — whether as a donation or an investment — based on the outcome they hope to achieve.

While the thinking of donors and funders now is shaped by rules government donations and investments, the report says, those rules “don’t always serve the larger purpose.”

And with data “beginning to gain traction in practice” as a philanthropic resource, the repot says, “it would be wise for philanthropy and nonprofits to take up the policy issues of data use, ownership, and privacy themselves, rather than wait for a regime to be imposed.”

— Todd Cohen

Philanthropy can work better by working smarter

By Lori O’Keefe and Jennifer Tolle Whiteside

The Triangle, like much of America, has a lot to be grateful for in this season of giving thanks, but we also face huge challenges.

In addressing them, we are fortunate to be able to work through the philanthropic sector to pool resources and find shared solutions to problems that affect our entire community.

To do that, philanthropy itself needs to do a better job in putting its resources to work.

Our community attracts smart people and innovative employers, and our schools, colleges and universities produce smart graduates and workers, but the region is also home to nagging poverty, poor health, illiteracy and other social ills.

And as this month’s national election showed, our society is divided and in flux regarding who we are, where we come from, and the role we believe government and other institutions should play.

With a damaged economy and elected leaders looking for ways to cut spending, the job of fixing our most urgent social problems will increasingly fall to the social sector.

That sector consists of over 1 million nonprofits throughout the U.S., including thousands that call the Triangle home.

Nationally, nonprofit organizations account for 5 percent of economic output and 10 percent of the workforce.  Charitable giving in the U.S. totals nearly $300 billion a year, with nearly 90 percent coming from individuals who give during their lifetimes and through their family foundations and estates.

Increasingly, however, the work of improving our communities is moving beyond traditional philanthropy.

A small but growing number of companies are building into their business underlying strategies to address social problems that represent an obstacle to their bottom line.

Individuals who want to build a better world, particularly young people and young adults, are looking for social enterprises, whether nonprofit, for-profit or governmental, that are dedicated to improving social and global problems, and that can show, with evidence and data, that their strategies for change actually work.

So today, as we celebrate National Philanthropy Day and prepare to celebrate Thanksgiving, we have a perfect opportunity to think about how to best tap into the Triangle’s human, social and financial capital and apply it most effectively to fix our most urgent problems.

Our region enjoys a rich mix of nonprofits, philanthropic foundations, corporate giving programs, donors and volunteers, women’s funds and “giving circles,” a rapidly growing form of collective giving that makes it easy for individuals to pool their funds and know-how and contribute it to charities.

The Triangle is also home to a broad range of professional advisers and other groups that work with nonprofits and individuals to help them be more strategic and effective in their charitable work.

Sadly, however, too many charities and other groups working for social good in our region overlap, duplicate one another, or work in isolation as they try to fix these problems that affect all of us.

We have an opportunity now to do a better job thinking and working together to put our knowledge, our time and our money to more effective use and find coordinated strategies to make sure we are making a difference.

How can we better coordinate our abundant resources and put them to work to help ensure that families can lift themselves from poverty, for example, or that kids and adults get the schooling and training they need to find good jobs, or that people in need have access to basic health care, or that women can free themselves and their children from abusive relationships, to name just a few of the huge challenges we face?

Our two organizations are known as community foundations, a hybrid breed of charity that was established in Cleveland nearly a century ago.

Community foundations work with individuals and institutions to create and manage charitable funds that support a broad range of local needs, including specific needs the donors and funders care about.

We function as a kind of philanthropic matchmaker, connecting resources with charities that serve people and places in need.

And we know, based on the work of our own organizations, and of the individuals and groups we serve, that philanthropy in the Triangle can be more effective and make a bigger impact on our biggest problems if we work together in cooperative and strategic ways that will make our community a better place to live and work.

Lori O’Keefe is vice president for philanthropic services and chief operating officer of the Triangle Community Foundation, and Jennifer Tolle Whiteside is president and CEO of the North Carolina Community Foundation.

Nonprofit news roundup, 09.21.12

Doug Zinn joining Kenan Trust

Douglas Zinn, executive director of the Mary Duke Biddle Foundation in Durham for over 30 years, has been named to the new job of assistant executive director at the William R. Kenan Jr. Charitable Trust in Chapel Hill.

In addition to its long-time support of higher education and the arts, the Trust is “looking seriously into investing in K-12 education and areas to related to basic human needs,” says Richard Krasno, executive director of the Trust.

“I’m absolutely delighted to have a guy of this caliber,” he says of Zinn. “We’re expanding our work and he’s the perfect guy to help do that.”

Zinn begins his new job on Sept. 24.

UNC-Chapel Hill names interim vice chancellor for advancement

Julia Sprunt Grumbles, former corporate vice president at Turner Broadcasting, has been named interim vice chancellor for advancement at the University of North Carolina at Chapel Hill.

Grumbles, a 1975 UNC-CH graduate who served on the steering committee of a UNC campaign that raised $2.384 billion, succeeds Matt Kupec, who resigned last week after disclosures that he had urged the hiring of another UNC fundraising official with whom he was in a relationship, and had taken private trips with her at university expense.

Holden Thorp, who this week resigned as chancellor, effective at the end of the school year, after disclosures he knew about the relationship and the hiring, and had accompanied the couple on some of the trips, named Grumbles to the interim post.

Grumbles, who helped co-found the Carolina Women’s Leadership Council, moved to  Chapel Hill in 2006 after heading corporate marketing, public relations, internal and external relations, human resources, media planning and buying, corporate philanthropy, and retail and image management at Turner Broadcasting, where she was the senior ranking woman.

Mindy Oakley to head Armfield Foundation

Mindy Oakley, chief operating officer and vice president of philanthropic services for the Community Foundation of Greater Greensboro, has been named executive director of the Edward M. Armfield Sr. Foundation in Greensboro. Oakley, who begins her new job Oct. 8, will succeed Steve Joyce, who is retiring after having headed the Armfield Foundation since it opened in 2000.

Peter Morris to head Urban Ministries of Wake County

Peter Morris, medical director, compliance office and director of behavioral health for Wake County Human Services, has been named executive director of Urban Ministries of Wake County, effective December 4.  He will succeed Anne Burke, who joined the agency in 1981 and became executive director in 1986. She announced her retirement in August 2011. Armstrong McGuire, a philanthropic advisory firm in Raleigh, assisted in the national selection process for the new executive director.

Chuck Kraft to head Ronald McDonald House of Winston-Salem

Charles W. “Chuck” Kraft, former executive director of the Robinhood Road Family YMCA in Winston-Salam, has been named executive director of Ronald McDonald House of Winston-Salem.

Grant funding grows at Wake Tech

Grant funding awards to Wake Tech Community College in 2011-12 totaled over $3.6 million, up 43 percent from  the previous fiscal year.

High Point University gets $1 million

John and Kathleen Luke donated $1.1 million to High Point University to establish an endowed professorship in the School of Art and Design. John Luke is chairman and CEO of MeadWestvaco based in Richmond, Va.

Communities in Schools of Wake County

Communities In Schools of Wake County, a dropout prevention agency that works in partnership with the Wake County Public School System, received a $45,000 grant from PNC to establish pre-kindergarten initiatives at its PNC Learning Center at Heritage Park and the SAS Learning Center at Kentwood.

United Arts of Raleigh and Wake County

United Arts Council of Raleigh and Wake County will host “Guess Who’s Coming to Dinner?” Nov. 1-3, featuring dinners in homes across Wake County with one or two artists, whose identify will remain a mystery until the night of the dinner.  Reservations can be made at http://www.unitedarts.org beginning Oct. 3.

Ronald McDonald House Winston-Salem

The kitchen and dining areas at Ronald McDonald House Winston-Salem, where home-cooked meals are prepared, now includes an art and chalk board area to display works created by families. This gift was coordinated by Lend Lease, which is  constructing the new cancer center at Wake Forest Baptist Health.

Peacehaven Community Farm

Peacehaven Community Farm in Whitsett is launching its annual campaign to raise $200,000. Located on 89 acres of farmland, the nonprofit serves adults with disabilities, providing a community garden and farm where they volunteer, and in 2013 will offer a residential housing program for adults with disabilities who will live and work at the farm. Plans for the first residence will begin this fall in partnership with Habitat for Humanity of Greensboro.

CreateAthon

thesalesfactory provided over $100,000 in creative services for 16 Triad nonprofits as part of the 2012 CreateAthon, a 24-hour blitz during which marketing, advertising and public relations firms provided nonprofit marketing services on a pro bono basis.  The event marked the 11th year thesalesfactory participated. It was the only agency in North Carolina and one of only 21 in the U.S. to participate.

Passage Home

Passage Home in Raleigh has been awarded $631,365.00 from the Veterans Administration to provide a daily average of 15 beds for homeless veterans. Services will be provided at scattered-site apartments in Raleigh and Wake County.

Raleigh City Farm

Raleigh City Farm received $5,000 as one of three winners of Green America’s first quarterly People & Planet award, recognizing green, small businesses.

Shepherd’s Center of Greensboro

Shepherd’s Center of Greensboro will kick off its 25th anniversary with an informational brunch at Friendly Avenue Baptist Church on October 8 at 9:30 a.m.

Child health awards

North Carolina health departments in Guilford, Robeson and Transylvania counties received North Carolina GlaxoSmithKline Foundation Child Health Recognition Awards, and Sam Bowman-Fuhrmann, a child advocate from Mount Airy, and Jacqueline (Jackie) Quirk, project coordinator for the North Carolina Child Care Health and Safety Resource Center in Raleigh, received Lifetime Recognition Awards, for their commitment to child health programs and advocacy.

SECU Family House

SECU Family House in Winston-Salem in its first year served over 900 families from over 70 North Carolina counties and 26 states who traveled to Winston-Salem for medical care.

New School of Philanthropy okayed for Indiana University

Indiana University has received approval from state regulators to create what is believed to be the first school in the world  dedicated to the study and teaching of philanthropy. The school, to be located on the Indiana University-Purdue University Indianapolis campus, will be home to existing programs that offer bachelor’s, master’s and doctoral degrees in philanthropy studies and were created by the university’s Center of Philanthropy, which celebrates its 25th anniversary this year. Gene Tempel, president of the Indiana University Foundation and a former executive director of the Center on Philanthropy, has been named senior fellow in philanthropy, effective Oct. 1. He will lead the planning and organization of the new school.

Nonprofits urged to ’empower’ donors

By Todd Cohen

GREENSBORO, N.C. — If nonprofits want to be change agents, they need to move beyond asking donors for money and instead give them the knowledge and tools they need to make change happen.

That was the message that Jon Duschinsky, a cause activist and founder of bethechange, delivered Aug. 23 in Greensboro at the 8th annual NC Philanthropy Conference presented by the Triad, Triangle and Charlotte chapters of the Association of Fundraising Professionals.

“There’s never been a better time to change the world,” he told 430 fundraising professionals who attended the conference.

But despite the emergence of a broad range of business models to engage people, as well as a broad range of social media and other tools to “empower people and spread the message,” he said, nonprofits are “failing to seize these opportunities.”

‘Underpaid’ and ‘under-resourced’

Operating like “funnels,” nonprofits are driven “to raise more money every year,” he said , “but even if you could do that, it still wouldn’t solve the problem you were created to address.”

While passionate about their work, nonprofits are “underpaid” and “under-resourced,” with charitable giving representing only 2 percent of gross domestic product in the U.S., a share that has not changed in 40 years, he said.

“The rest of society has tasked you with changing the world, and given you 2 percent of resources to do it,” he said. “If we continue to do what we always have done, it will kill us.”

Reflecting the pressure and stress is the fact that fundraising professionals change jobs every 18 months, on average, Duschinsky  said.

“If we keep doing what we have always done, we’re not going to change the world,” he said. “You’re being stymied and prevented from doing that by the system. It’s time to change the system so we can change the world.”

Solving problems

Nonprofits were created to solve problems, he said, but they typically become preoccupied with talking about themselves, not the problems they were created to solve.

“We are having conversations with the rest of the world that the rest of the world doesn’t care about,” he said. “What you need is the idea that could unleash people interested in your cause if you let the cause  do the talking rather than letting the organization to the talking. Organizations organize problems, they don’t solve them.”

Donors need to hold boards accountable for the fact that their nonprofits typically focus on their own survival rather than on the problems they were created to address.

“We have endowed a group of people to sit at the head of organizations tasked with changing the world, and we have completely forgotten oversight, accountability,” he said.

“When an organization is created, its purpose changes from solving a problem it was set up to solve, to ensuring its sustainability,” he said. “Donors want to see problems solved.”

Knowledge an asset

Nonprofits’ greatest asset, he said, is their “understanding for how to effect change,” and they can make greater use of that knowledge by making it available to donors and others who care about the same cause.

“People don’t give money for tax reasons but to make change happen,” he said. “People want to associate themselves with values, not institutions, and make a difference.”

So instead of continuing to operate like “a hamster on a wheel, gathering resources to us  all the time,” he said, nonprofits should find ways to package, capture and share their knowledge.

“Empower people not only so you can be the change you wish to see in the world,” he said, “but so they can be the change.”

A new business model

That will require identifying the “compulsion” that drives the organization and the realistic outcome it wants to achieve; starting a “conversation that people actually want to be part of;” serving as a “champion” people can believe in; and “empowering” donors and other supporters “who passionately believe the thing you’re fighting for is worth fighting for,” Duschinsky said.

Ultimately, he said, nonprofits need to “flip” their business model.

Instead of asking donors to give money so their organizations can fix problems, he said, nonprofits need to engage donors by providing the tools and expertise they can use to be part of the solution to those problems.

“Turn your funnel upside down and empower stakeholders and donors to take the baton and run with it, so they feel they own the change you are trying to achieve,” he said. “You have to be the change you want to see in the world if you want it to happen.”