• Fundraisers will always respect the free choice of all individuals to give donations or not.
• Fundraisers will not accept donations where the acceptance of those gifts would not be in the best interests of the organization or create a conflict of interest that would be detrimental to the organization’s reputation, mission, and relationship with existing supporters and beneficiaries.

Until recently, I wouldn’t have thought about these statements representing donors’ and organizations’ rights necessarily being in conflict. However, considering recent high-profile cases of gifts being rejected, or being refused before they’ve even been offered, following these principles in certain circumstances can create quite a dilemma for the modern fundraiser.

On rare occasion, a donor’s conflict of interest, such as their own personal gain, the burden of administering a particularly complicated gift, or a donor’s desire to direct their gift for a use outside the organization’s best interest requires invoking a review of gift acceptance policies or the consideration of a formal gift acceptance committee – the channels through which fundraisers are shielded from personally deciding whether an unusual gift should be accepted.

Yet, these days, institutions are increasingly facing external pressure to reject otherwise legitimate donations from individuals and families, not on these grounds, but based on perceived immorality on the proposed donor’s part. As an example, numerous museums in the United States and England have recently been forced to respond to public pressure by rejecting current and future gifts from the Sackler family, with protesters asserting the family’s personal complicity and contribution to the opioid addiction crisis.

It is usually a straightforward decision not to accept a gift when a proposed donor has been convicted of criminal activity. But in recent cases, a donor’s political views, their position on a provocative or hotly-debated topic such as climate change, or their legal ownership of a company with controversial business interests have encouraged bystanders to take a vocal, public position on the validity of the donor’s giving and to criticize an organization’s appropriateness in receiving it.

The essence of charitable giving in America relies on an individual’s freedom to make a voluntary contribution to any organization or worthy cause they wish to support. These transactions of the soul can bring indescribable joy and fulfillment to the donor, while providing the resources necessary for an organization to maximize the delivery of its mission. Our job as fundraisers is not to question a donor’s character or motive for choosing to be philanthropic; it is to facilitate their ability to give unless some real conflict exists that would substantially impede or damage the organizations we represent.

The values-based questions in play today supersede the function of a traditional gift acceptance committee. An organization’s board of directors, with public input as it sees fit, should be the arbiter of whether a gift from a specific donor would be detrimental to its organization’s reputation or mission or would harm its relationship with its constituents to the extent that the gift should be refused. But as boards diversify and represent more divergent points of view, debate about the receipt of controversial gifts is only likely to increase, further complicating fundraisers’ ethical role in representing both donors’ and institutions’ interests.

In the end, I believe that the spirit of philanthropy and goodwill that has fueled America’s nonprofit sector and provided immeasurable benefit to society will continue to thrive, reconciling the generosity of well-intentioned individuals and families with the organizations that are meaningful to them. And as far as I am concerned, it is a privilege to assist them both in this worthy endeavor.

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According to the findings of Giving USA, 2018 was an uneven year for philanthropy, with some subsectors experiencing significant increases, while others saw significant decreases.

It was also a year that saw three unprecedented things: 1) a record year for giving at $427 billion, 2) for the first time since Giving USA began in 1954 individual giving was less than 70% of all giving, and 3) giving to Religion reached its lowest point in more than 40 years, falling to 29%.

Total giving increased in 2018 in current dollars, but just barely, at a rate of 0.7%. Adjusted for inflation giving actually decreased by 1.7%.

Five subsectors saw giving decline, while four saw increases. The biggest increase came in giving to International Affairs, while the largest decrease was in giving to Foundations.

As in previous years, giving by Individuals is the number one source of gifts at 69%, but declined by 1.1% from its 2017 level. Giving from Foundations, many of which are family foundations, increased 7.3%.

While Religion continues to be the number one recipient of gifts, giving to Religion continues to lose market share, reaching an all-time low of just 29% of the pie and actually decreased by more than 1.5% in current dollars. While the trend of a declining percentage of giving to Religion has been ongoing for years, the actual decline in current-dollar giving to Religion is a unique phenomenon; one that has never happened in a non-recession year.

Below, is a quick look at the numbers. We will share more in-depth information in our upcoming sector newsletters.
Sincerely,

David H. King
President & CEO

Quick Look At The Results

The Numbers for 2018 Charitable Giving by Source:

• Giving by individuals totaled an estimated $292.09 billion, decreasing 1.1% in 2018 in current dollars. The only source that decreased between 2017 and 2018.
• Giving by foundations increased 7.3% between 2017 and 2018, to an estimated $75.86 billion in 2018. Between 2016 and 2017 giving increased 12.0%. The cumulative change in current-dollar giving by foundations between 2016 and 2018 is 20.2%. This is the greatest percent increase of any source in this period.
• Giving by bequest remained virtually unchanged in current dollars between 2017 and 2018-to $39.71 billion. Adjusted for inflation, giving by bequest decreased 2.3% in 2018.
• Giving by corporations increased by an estimated 5.4% in current dollars from 2017 to 2018, totaling $20.05 billion. In current dollars, giving by corporations decreased by 2.0% between 2016 and 2017, and increased 5.4% between 2017 and 2018. The cumulative change in current-dollar giving by corporations between 2016 and 2018 is 3.4%.

The Numbers for 2018 Charitable Giving to Recipients

• Giving to religion decreased 1.5% in current dollars from 2017, totaling $124.52 billion in 2018. Adjusted for inflation, contributions to religion decreased 3.9% in 2018. Accounting for 29% of total giving, this is the first time that giving to religion has fallen below 30% of overall giving.
• Giving to education decreased 1.3% in current dollars from 2017-to $58.72 billion in 2018. Adjusted for inflation, contributions decreased 3.7% in 2018. In 2017, giving to this subsector reached the highest inflation-adjusted value recorded to date..
• Giving to human services decreased 0.3% from 2017, totaling $51.54 billion in 2018 in current dollars. Adjusted for inflation, contributions decreased 2.7% between 2017 and 2018. In 2017, donations to this subsector totaled the highest inflation-adjusted amount recorded to date.
• Giving to [grant-making] foundations decreased 6.9% in current dollars from 2017-to $50.29 billion in 2018. Adjusted for inflation, contributions to foundations decreased 9.1% in 2018.
• Giving to health organizations grew 0.1% from 2017, totaling $40.78 billion in 2018 in current dollars. Adjusted for inflation, contributions to health decreased 2.3% between 2017 and 2018.
• Giving to public-society benefit declined 3.7% in current dollars from 2017, for a total of $31.21 billion in 2018. The cumulative change in giving to public-society benefit between 2016 and 2018 is 2.1% in current dollars. Contributions to this subsector reached the highest inflation-adjusted value recorded to date in 2017.
• Giving to arts, culture, and humanities increased 0.3% from 2017, totaling $19.49 billion in 2018 in current dollars. Cumulatively, current-dollar giving to this subsector increased 13.8% between 2016 and 2018.
• Giving to international affairs increased 9.6% in current dollars from 2017-to $22.88 billion in 2018. The cumulative change in giving to this subsector between 2016 and 2018 is 5.2% in current dollars. Giving to the international affairs recorded the highest inflation-adjusted value in 2015, at $25.09 billion.
• Giving to environment and animal organizations increased 3.6% in current dollars from 2017, totaling $12.70 billion in 2018. Donations to the environment/animals reached the highest inflation-adjusted amount recorded to date in 2018.
• Unallocated giving represents 2% of total giving at $6.53 billion in current dollars in 2018.

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The subject was how to help nonprofits achieve and maintain financial stability.  Year in and year out, this continues to be the major issue facing our non-profit partners.  

Fundraising and earned income play a big role in achieving financial stability, so the lessons from this two-year project are useful as we think about starting the New Year off on a strong note.  FMA and the Packard Foundation found that three best practices made the biggest difference:

1. Plan and budget for multiple years, not just the year ahead. Taking a short-term perspective will mean that you usually will come up short. And donors want to know their gifts are being used to move your organization forward, not just bailing you out at the end of the fiscal year.

2. Use visual dashboards to track performance and inform Board and staff discussions.  Dashboards help leaders, managers, and staff members more easily see key trends and make real-time plans for improving fundraising and financial performance. Tip: make sure Board giving is a key indicator on your dashboard.

3. Have a policy for building an operating reserve—and follow it. Financial resilience means that you can survive in lean times, and a reserve fund, sometimes taking the form of a quasi-endowment, can make the difference.

To learn more, read the full SSIR article. 

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Major Reasons For Increasing Healthcare Philanthropy:

Increasing Access Points

Large hospitals are no longer the only access point for patients to receive medical care. Technology has advanced to the point where patients can now receive medical consultation via text, patient portals, or video chats. In addition, many institutions are now being rewarded through grants for keeping people out of the hospital. 

Some institutions are working to take a new approach to healthcare which establishes the hospital as an anchor to a health village. Health villages may include a variety of wellness services such as fitness centers, ambulatory clinics or natural food grocery stores. The goal is to teach the community how to stay healthy, so they do not have to go to the hospital in the first place.

As the healthcare industry continues to promote wellness, over treatment, hospital fundraising offices have an entirely new philanthropic landscape to consider. Healthcare development teams need to be prepared to clearly articulate their goals particularly in the areas of preventive medicine and wellness initiatives. Development officers should be specific and give real-life examples whenever possible as they explain the needs and how donors’ contributions will directly or indirectly benefit patients, sometimes before they become patients. Donors should not be burdened to search for compelling stories or illustrations that demonstrate their potential impact on the healthcare facility specifically, or society generally. 

Rethinking ER

According to the Centers for Disease Control (CDC), Americans visited the emergency room 141 million times in 2014, with fewer than 8% of these occurrences resulting in admission to the hospital. Hospitals are rightly feeling the need to create more urgent care centers where patients can receive immediate care for minor injuries and illness, such as cuts or a sore throat. Some experts speculate this could reduce the number of ER patients by 30-35% which is in line with NIH analysis confirming that 37% of ER visits are non-urgent. 

Therefore, there is a compelling case for development officers to know who is visiting their Emergency Departments for treatment, just as many have monitored admissions in the hospital historically.  Thankfully, hospitals are acquiring data like never before and the most successful organizations are incorporating the Emergency Room data into their regular prospect screenings.  We have seen several more sophisticated offices even incorporate a “concierge” level of service for their donors for those unexpected visits.

Grateful Non-Patient Programs

Certainly, grateful patient programs have played an important role in healthcare philanthropy and will continue to do so, especially as more mature fundraising programs segment their appeals further than they ever have before.  For example, where appeals for “cancer” research have worked in the past, segmenting by specific types of cancer (provided the patient has agreed to release that information) works even better; however, the days of the grateful non-patient are upon us and we need to concentrate on those individuals as well if not more. 

To adequately hear about patient experiences and cultivate new donors, healthcare facilities need to prepare adequate tools to reach this ambulatory or out-patient population. Surveys, calls, emails, and mailings all need to be optimized and tracked efficiently to make the most of the growing grateful non-patient population.

Don’t Neglect Major Gifts

In 2017, the largest source of charitable giving came from individuals at $286.65 billion, or 70% of total giving, according to the Giving USA 2018 Report. Healthcare institutions should keep in mind individual donors support multiple causes ranging from basic needs to religion. Intentional cultivations of major gift prospects can help donors understand the importance of their gifts in a confusing and increasingly competitive climate.

There is no denying rapid changes are taking place in the healthcare industry, prompted by patient (and non-patient!) actions, activities and preferences. Development officers who can leverage opportunities through the emerging trends of out-patient care and wellness training, while cultivating strong relationships with individual donors, will be setting the stage for success in the years to come.  

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Michael R. Bloomberg’s gift will enable the University to significantly increase the number of qualified low- and middle-income students who can attend. In his own words, the goal is to “eliminate money problems from the admissions equation for qualified students.” The university will replace loans with scholarships for students, starting in the spring of 2019. The university will also use the money to diversify its undergraduate enrollment, making one in five students eligible for Pell Grants up from the current one in 15 students. That’s a good thing.

Critics contend he could have made a bigger difference by giving to programs with a broader reach. He already has done that with his American Talent Initiative (ATI). Through ATI, Bloomberg Philanthropies brought college presidents and higher education thought leaders together to address challenges facing high-achieving, lower-income students. ATI is a collaboration between the Aspen Institute’s College Excellence Program, Ithaka S+R, and a growing number of colleges and universities “dedicated to substantially expanding opportunity and access for low- and moderate-income students.” ATI members all graduate at least 70 percent of their students within six years. That’s also a good thing.

In addition, Bloomberg Philanthropies supports the CollegePoint initiative, “which provides virtual, high quality college and financial aid advising to thousands of high-achieving, low- and moderate-income students across the United States.” That’s yet another good thing.

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By 1892 there were more than 4,000 enabling an extraordinary outpouring of mega-gifts from people with names like Carnegie, Hopkins, Stanford, and Rockefeller. But it was not without controversy. Rockefeller and others created large foundations that some feared would have too much influence.

As we celebrate the $410 billion given in 2017, many consider philanthropy to be in a Golden Age. Not surprisingly, there are once again expressions of concern about the influence of large foundations.

A good example of how this thought works comes from Stanford Professor Rob Reich, who said “Big Philanthropy is definitionally a plutocratic voice in our democracy, an exercise of power by the wealthy that is unaccountable, non-transparent, donor-directed, perpetual, and tax-subsidized” The Atlantic.

Reich’s concerns echo those of the past, and those who toil in the field of philanthropy today should be mindful that there is a need for vigilance. The late Bob Payton reminded those he tutored at the Center on Philanthropy “to ensure what remains is a “voluntary action for the public good.” I was fortunate enough to be one of the people to study under Payton.

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Please provide your name and email to view the presentation. If you have additional questions about how the giving trends may affect your organization, please email David at d.king@alexanderhaas.com.

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As I head for Phoenix for AAM 2018, the annual meeting of the American Alliance of Museums (May 6-9), I have been exploring what people will be talking about at this year’s conference.

Museum Fundraising Strategies

One topic that caught my eye and captured my imagination was the subject of community engagement curators (CECs). An increasing number of museums and cultural centers are adding CECs to their staffs to build two-way conversations about how to make our work more relevant to our neighbors and to give them a voice in what we do within and outside the museum walls.

Community Engagement for Museums

With tight budgets and a long and ever-growing list of good ideas, it is tempting to think that we can cover community engagement in episodic ways—by having days for specific audiences, encouraging the use of social media (Instagram anyone?), and promoting partnerships with schools and leadership organizations.

The challenge is to sustain and broaden this engagement and help it thrive. While, yes, this is everyone’s job, putting someone on point means that you are serious about the need to innovate community-based programs, involve people beyond your “inner circle” in program development, and measure the impact in terms of what your community thinks and how it responds.

As Elizabeth Merritt aptly writes in her blog for the Center for the Future of Museums:
“At their core, museums are storytellers, but whose stories are we telling? How are we telling them? Are we reaching out to and co-creating with our communities in a culturally competent manner?”

The Role of the Community Engagement Curator is on the AAM program for Monday, May 7, at 1:45 pm and will feature community curators in children’s, art, anthropology, and history museums. For more on this topic, visit the AAM blog.

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Technology has fostered and facilitated this philosophy, which tracks every possible activity value. In many ways, this has made our industry more disciplined—something that can be viewed as being positive. But there’s a backlash brewing.

We frequently hear from high performing staff members saying their managers do not care to hear anything but statistics. These individuals, who were originally hired for their ability to close gifts and form strong and lasting relationships in addition to raising funds for the organization, are left wondering if their abilities really matter.

Since the retention of quality staff is a valued tenet, there has to be more a leader can do to ensure success and retain the best employees! The March 5 CASE Advancement Newsletter featured three articles that should be required reading for every manager: Start With Kindness, A Different Approach to Progress, and Success Requires Trust.

The principles outlined in these articles offer timely insight and direction to anyone who provides supervision or is responsible for leading a team.

Author and entrepreneur Jennifer Cohen, who also writes for Forbes Magazine, is quoted in Start With Kindness. The opening sentence grabbed my attention both for its simplicity and its common sense: “To be a better leader, focus on being a better person.”

Cohen goes on to say there are three traits that leaders should focus on developing: Generosity, Honesty, and Authenticity. She adds, “If you are a leader who is honest but not kind, you will never create the team you want or reach the results you desire. Being a good person has to come from the heart.”

In Success Requires Trust, author Tarra Mitchell who writes for Great Leadership tells readers: “Making meaningful connections is the path to gaining trust.” She advocates improving listening skills through avoiding interrupting, maintaining eye contact, and holding thoughts and comments until the person has finished speaking. Mitchell recommends nurturing a collaborative environment and allowing the team to participate in decision making because these promote buy-in of shared goals.

The final article offers suggestions on how to accomplish changes in character. In A Different Approach to Progress author Marcia Reynolds in Psychology Today Magazine recommends creating habits, not goals: “to create new habits of behavior, your brain needs consistent evidence that your goal is achievable and worth the effort.” She encourages readers “to enlist” the aid of another person to help hold you accountable. “In our practice, we often provide coaching and mentoring to academic and administrative leaders to help them develop effective styles to elicit the very best from their teams.”

John Taylor of our firm is fond of saying, “The right people are out there, and many of them already work for you!”

I worked for some very capable leaders, who inspired greatness, and for others who did not. Upon honest reflection I know there were times that as a manager, I fell in the latter category. I wish (and I’m sure some of my former employees wish) I had read and applied these recommendations.

Doing all you can to retain high performers may mean reflecting on your own behaviors before taking other actions.

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Catch a new episode of Futures in Fundraising each month on Tuesdays at 10:00 am (EST) on Facebook Live.

To download this show and catch up on others, find us on iTunes.

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