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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Meet John Taylor, Partner with Alexander Haas! As a Partner, John applies his extensive background in development to serve a wide variety of clients. For over 30 years, he has served as a leader in the field of advancement, campaign management, and board development and has helped nonprofit organizations around the world to enhance the operational aspects of advancement and assist them with strategic and campaign planning, preparation and execution.

John holds a BA in Mass Communications and Socio-Political Change from Vanderbilt University, and a Certificate in Nonprofit Management from Duke University. He resides in Durham, NC, with his wife and children.

In this month’s Team Member Spotlight, John shares what inspired him to join the Alexander Haas Team, why he loves helping others and his favorite go-to resources for news and information in the fundraising field.

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“How will our proposed capital campaign impact our annual giving?”

The question came up in a Board meeting just the other day. (I knew it would!)

The organization has been around for a number of years; but, until two years ago, it had seen quite a bit of staff turnover, had struggled with financial challenges coming out of the Great Recession, and had lost members/donors for a few years in a row.  Finally, things appear to have turned around and the numbers are all looking better.

Through strategic planning, the Board has a vision for a major capital project.  Wisely so, given the internal challenges they had weathered, a few Board members began asking some very good questions such as the one about the impact of a capital campaign on annual giving.

We all know the last thing that you want for your organization is to merely shift donated dollars from one fund (annual giving) to another (capital campaign).  How many of us have heard donors say, “Just take the amount I’m giving you now and divide it between the annual fund and the capital campaign.”  No!!  Don’t do that!!!

Well, then, how do you manage a successful annual giving campaign as you move into a capital campaign?

The response to that question can vary based on a number of factors, but here are a few thoughts to consider – and they all relate to donor communication:

• Start now communicating clearly the role of annual gifts within your organization. Explain in direct terms what their donated dollars fund and how annual giving serves as the “lifeblood” of your organization.

• As you begin planning for the capital campaign, communicate clearly the importance of both annual and capital gifts toward accomplishing the mission of your organization. Explain how both must be strong efforts. And as long as you’re in education-mode, be sure to explain the factors that distinguish a capital campaign from annual giving: that a capital campaign seeks larger gifts over a defined period of time usually 3 – 5 years; that the capital campaign supports a special project, construction, renovation or equipment; etc.

• In many cases – especially with many of your major donors – you’ll want to make a “double ask.” This involves asking for the donor’s annual support as well as a specific commitment to the capital project. Just make sure that you lead with the ask for the annual support!

And where should this communication begin?  It should begin with the Board members themselves, who must lead by example in giving annually and to the capital campaign that they have developed through their strategic planning process.

I’m not sure where this particular organization and its Board will end up in their campaign planning process or what they might decide to do.

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 “Can we require a minimum gift to a campaign?”  The question I was asked was unusual.  The caller, co-chair of a local organization, wanted to know if we had ever recommended requiring a minimum gift level for a capital campaign.  This organization had initiated a capital campaign several years ago, which had experienced great success in moving through the flooring and lead gift phases, and was now in its public phase.  Although early gifts to the campaign had been generous, many of the recent gifts were small, and well below expectations of the volunteer leadership committee.

Campaigns are all about the big gifts.  We know from our experience and from the data kept by the Council for the Advancement and Support of Education that the top ten gifts account for almost half of the campaign goal for a campaign of the size ($10,000,000) that this organization had undertaken. This organization had ambitions to grow and needed funding for new and renovated facilities.  The sense of urgency was compounded by a growing demand for its services, and a need to provide updated technology and adequate learning spaces for its existing population of students.

When asked what prompted the question, I was told that the campaign committee felt that certain individuals needed a giving guide.  Several donors, who were known to have great wealth capacity, had made what were judged by the organization to be token gifts.  The suggestion had come from a committee member who thought that requiring a $5,000 minimum gift would compel these donors to give at that level or higher.  Since all members of the committee were donors of significant means, the suggestion resonated with them.  Further, it was thought that the time, effort, processing and postage costs incurred in acknowledging very small gifts would cost the organization more than it netted.

The answer to this question is, of course, yes, the organization can do this.  Any organization can set a threshold amount for its campaign efforts.  In fact, some organizations have set minimum levels to establish an endowment or to restrict a gift.  This organization could very well state that gifts of less than $5,000 would count toward their annual giving program and that gifts of $5,000 or above would go to the campaign. But, the concern might be that this would be offensive to a number of donors, certainly to those who may not have the means to make that size gift, and perhaps to others as well.  Many of their donors had already committed to the annual fund, and were making a second gift in response to a campaign solicitation.

So, a better strategy to encourage gifts at or above the $5,000 level might be to make that the threshold amount for recognition on the donor wall.  Further, I suggested that they revisit their solicitation strategy for those whom the committee considered to have means. Campaign phases overlap, and even though they were employing channels such as direct mail and email for solicitation in the public phase, they could continue having face-to-face meetings and asking for a specific gift at a level commensurate with capacity and expectations.  And finally, nothing would preclude the committee from going back to those who had already committed and requesting consideration of an additional campaign gift. One of the benefits of a campaign, particularly in the public phase, is to stimulate more giving from a greater number of donors, and gifts of all sizes should be encouraged and welcomed.  In the end, all gifts should matter.

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Another produced a glossy, four-color, seventeen-page document on 14x 17 card stock as its case for support…

Still another used hand-made paper bolted between copper plates…

The collection of case statement materials in our office runs the gamut from black text on white paper to multi-media and textured art.  Advances in electronic media have resulted in video portrayals, from personal testimonials of beneficiaries, to 360 degree “tours” of the proposed renovation or new structure, complete with people, animals, and/or art.   

One board member asked, “How can we make our case statement materials so distinctive that it compels people to give transformative gifts?”

For the most part, it isn’t the materials that provide the urgency, but the story your organization tells through its case, and by its volunteer leadership and staff.  Sometimes the most effective way to accomplish this is as simply as possible, a white paper, carefully outlining the need, and conveying the impact of the campaign.

Millions of dollars in the flooring phase of a campaign have been raised with simple narratives, as prospects are drawn in to give their opinion on the need.  If bricks and mortar are campaign priorities, conceptual drawings are a nice addition to help visualize the end result.

One executive director complained to me that at the end of their last campaign she had a closet full of fancy cases for support that were never used.

Another, whose printed case won an award, quickly became an obsolete document as the goal was lowered.

Yet another case statement had to be scrapped when the architectural firm ceased to exist.

Those of us who’ve been around for a while will recall the boxes of VHS tapes that were never distributed.

Prospects have been known to question the outlay of funds from a non-profit for a case statement that gives the impression of opulence or waste.

How does a non-profit set a budget for a case statement?

Generally, a campaign should cost less than 10% of the funds raised, with the larger the goal permitting an even smaller percentage.  Collateral materials should be approximately 1% of the overall funds raised.

When developing a case statement, the designer needs to keep the organization’s mission at the forefront.  Attractive materials that tell the story are important.

Equally important is that the case statement itself doesn’t compete with the organization’s need, or imply that the institution has exceeded an unlimited budget in producing such materials.

Follow these guidelines when you begin to create your campaign’s case statement, and you will be sure to reach your donors more effectively!

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A successful campaign is built upon a compelling case for support. We are often called upon to help clients craft a case when they are in the initial stages of contemplating a campaign. Those institutions that have just concluded or updated their strategic plan are in the best position to begin preparing their case. As an organization prepares for a major fundraising campaign, its case for support should be grounded in its strategic plan. There are numerous ways for nonprofits to go about strategic planning and, thus, one size does not fit all. What is most important is developing an inclusive approach appropriate to the culture of your particular organization. Regardless of what approach is designed, most planning efforts have these components:

• A clear mission statement.
• A vision statement that is bold and compelling.
• Input from a variety of interested and involved stakeholders.
• Enlightened leadership.
• A delineation of the programs needed to carry out the mission.
• And a description of the human, capital, and financial resources necessary to support those programs.

Ideally the planning process will yield a vision that can inspire the campaign and specific program objectives that can be translated into capital, endowment, and current support priorities for the campaign. It is important that the organization have such a strategically grounded approach to the campaign, but the most successful campaigns develop these priorities specific to those your organization serves. Successful planning efforts in advance of a campaign engage not only organization leaders, but also engage donors and volunteers as the planning process is unfolding.

Many organizations like to allow six-to-12 months for a comprehensive strategic planning process with involvement from organization leaders, staff, board members, volunteers and the community. Such participation requires a masterful leadership effort from these different constituencies in crafting a multi-faceted plan running the gamut from programming to endowment, and ultimately, the campaign.

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I was asked by a client to join the staff for their yearly planning retreat and was asked to do a presentation on the top ten characteristics of effective development programs. While I have given a great deal of thought to what makes a development program excel, I had never really tried to list those traits that characterize truly effective operations. Well, I put pen to paper and began to list them. I found that I came up with more than ten, but knew that I had to prioritize them and had to eliminate some. When it came time for me to do the presentation at the retreat, I began by asking each of those attending to do their own list and then went around the room, asking them to indicate what they considered to be most important. They came up with some that I listed, some that I had considered but chose not to put in the top ten and some that I had not considered and could well bump some that I had included. In short, it was a learning exercise for me and for them. I then shared my list, which is given below:

10. Committed to developing yearly and long-term plans that align with the institution’s strategic plan and priorities.

9. Develop effective partnerships with Board, President, communications, admissions and athletics.

8. Work collaboratively internally without losing focus on specific areas of responsibility.

7. Effectively and appropriately utilize volunteers.

6. Rigorous evaluation of programs and initiatives to effectively allocate limited resources.

5. Create and articulate a powerful case for support.

4. Committed to demonstrating effective donor appreciation.

3. Develop and utilize measured, meaningful performance metrics.

2. Value and insist on professional development of staff (conferences, professional networks and on-site visits).

1. Understand and practice development, rather than simply doing “fundraising.”

I am guessing that you would include some that I have not included. And I would like to invite you to share with me what you think should have been included, but isn’t. And, if you take issue with one or more that I have included, feel free to let me know that as well.

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So, it is imperative that we know and are able to articulate why a gift matters. You need a new building? So what? Tell me how it will enable faculty to better educate students and make new and enhanced methods of learning possible. You need professorships? Tell me how those funds will enable the university to recruit, retain and support highly qualified teacher-scholars who will educate and inspire their students and advance our knowledge in key areas. Always, always in preparing for a gift solicitation be ready to answer that short, but pointed and meaningful question: “So what?” In so doing, you will find that your prospects respond-not because they are giving to “people,” but because they are giving to make people better. That’s the case. And we darned well better articulate it clearly, concisely and consistently.

I often hear that “people give to people.” While that is true to some degree, particularly in community-based campaigns, rarely do people make substantial (by their own definition) gifts to people. Rather, they make those gifts to institutions, projects and programs that resonate with values that they hold near and dear. That is particularly true in higher education, where the overwhelming majority of solicitations are made by professional staff: development officers, academic and administrative leaders. The deciding factor in those gift decisions is not the solicitor, but rather the compelling nature of the specific objective that the gift will fund. Donors see that the gift will enable something that they value to become real. In short, in the vast majority of instances in higher education, people give to the case, not to people.

So, what is the case? The case is not a document, whether printed or electronic. Rather, the case details why the specific objective the donor can fund is significant. How will it matter? How will it make lives better? How will it make the college or university even stronger in discharging its mission? In short, it answers one basic question: “So what?” That is, tell me how this gift will make a difference.

All too often I find gift officers focusing on things other than the case, the “so what.” Rather than presenting the case, gift officers can focus on secondary matters, what I prefer to call leveraging points. Leveraging points have their place, but their place is not a substitute for the case, the impact of whatever the proposed gift will make possible. Leveraging points include such things as gift recognition, naming opportunities, demonstrating leadership, meeting campaign goals, securing challenge gifts or obtaining matching gifts. These are important points to raise as we seek to close a gift. They can help a donor to make that decision to provide the gift. However, they are no substitute for the case. They play a supporting role, not a starring role.

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