Philanthropy in These Unsettled Times

   Penelope Cagney / CEO The Cagney Company  

Published with permission:

What is the state of philanthropy in these unsettled times? What we know to date is that $11.9 billion was given globally for Covid-19 relief in the first half of 2020 according to the Center for Disaster Philanthropy. We also know that many funders--individuals, corporations and foundations--changed the way they are doing business. 

-Many leading foundations loosened funding restrictions, and some increased their payouts. More than 775 foundations globally committed to flexible funding in response to Covid-19. As the crisis draws to a close, some foundations will return to former giving restrictions, but others will continue their successful new practices of less funding restrictions and direct payouts. And some foundations will shift their programmatic priorities, giving more to promote social equality and/or justice for instance, and they may retain the new focus.

-High-net-worth individuals contributed vast amounts for the pandemic, with Twitter CEO Jack Dorsey pledging $1 billion to pandemic relief and Jeff Bezos giving $100 million  to Feeding America. Like the foundations, some donors will keep the new and others will revert to former programmatic interests.

 -Corporations accounted for nearly two-thirds of Covid-19 funding. This figure includes funding through both corporate foundations and corporate giving.* It will be interesting to see how the path of economic recovery affects their giving in 2021.

Here’s some encouraging news for the US in particular. According to a news release in early October,  the Fundraising Effectiveness Project, giving was up overall in 2020 by 7.5% in Q3. The number of small donations increased 19.2% over the first six months of last year. That may be due in part to the $300 universal charitable deduction that was enacted as part of the Cares Act. (You may want to remind your donors of this as the end of the year draws near).

 

$449.64 BILLION TO CHARITY IN 2019

In 2019, Giving USA Foundation reported substantial growth in charitable contributions increasing to $449.64 billion, up from $427.71 billion in 2018. The ten key giving sectors– Religion, Education, Human Services, Foundations, Health, Public-Society Benefit, Arts and Culture, International Affairs, Environment/Animals, and Individuals– all saw increases. Strong philanthropic results were driven most by a strong stock-market, a robust economy, full employment and consumer confidence.

That was then: this is now. The full effect of Covid-19 is still unknown. Though the stock market has so far mostly rebounded from a full-on crash a few months ago, the stock market does not define the economy. Staggering unemployment, and economic collapse marked April. May and June. Though there has been some recovery in soft goods consumer spending, and better unemployment figures for May, the charitable sector is, for the most part, struggling. It is well to remember that the US charitable sector, overall, is almost inevitably, a trailing, not a leading edge.

Though the nation is slowly re-opening, the triple whammy of the coronavirus; the long overdue reckoning with racism in America; and the absolute craziness of this election year – each a black swan event on its own – combined with the time lost, all makes for a stiff wind. We know that around 40% of giving is generated in the last quarter of the calendar year. That 40% may hold: but the it’s other 60% that’s rocky. Expect a dip. If the sector makes the 2018 number 0f $449 billion, that would be a huge win. 

ORAM MARKS 80 YEARS IN BUSINESS

- Hank Goldstein, CEO, The Oram Group, Inc.

Oram was founded by Harold L. Oram in 1940, and has been in continuous operation since, making us one of the oldest firms of its type: management consultants to nonprofit organizations. Originally established to help nonprofits in their fundraising, Harold Oram pioneered direct mail campaigns for progressive organizations. Many of today’s best known and robust civil rights, environmental, health and educational institutions were among our clients. The ACLU, naacp-Legal Defense Fund (now just LDF), Sierra Club, NRDC, World Wildlife Fund, and Planned Parenthood are just a few (among many hundreds) of early clients, still around, still doing exemplary work.

Over time, our services expanded – we developed competencies in every aspect of fund development: special events, estate giving, major gifts, corporate and foundation grant-writing, communications, marketing, earned income, etc. As growth continued, we took on broader issues of nonprofit management: e.g., strategic planning, governance and board development, best practices, program effectiveness and executive recruitment. I joined Oram in 1964. I worked at first on a capital campaign for Hampton Institute (now University), and in 1967 was assigned other clients. I began to move up in the company, bringing in several clients on my own, and always seeking to broaden the services we could offer. 

In 1978, Harold was ailing. Fortuitously, Stewart Rawlings Mott, an heir to GM, and Robert Wallace Gilmore, who had married into the Publishers Clearing House family, stepped in – great men Harold and I had worked with through our civil rights, population and peace movement clients – and they financed my purchase of the company. Oram died in 1990. In 1992, with around 30 employees, the company broke up in the acrimonious departure of three colleagues in a dispute over money. Nothing new there. But by virtue of an artful non-compete agreement each had to buy out their client contracts from Oram, which they did. I was left with the buyout proceeds, a half dozen of my own clients, and of course, I owned the Oram name and the brand.  

I dithered for a few months weighing the upsides and downsides of rebuilding the company, or just hammering on, as a much smaller entity. Given that overhead and payroll are killers, and that if one serves 501-c-3s, profit margins are razor thin anyway, I opted to continue as a ‘boutique’. I’ve done that ever since, with never more than a few employees, doing better than when I had to meet a payroll of $100-150,000 a month. I developed a strong, flexible network of specialists upon whom I still call for whatever services a client might require. As I aged, younger professionals moved up; my universe of contacts and new business slowed. I embraced the inevitable.

Though we no longer actively seek paid work, it finds me, and actually, it is quite liberating not to be hunting all the time, or even at all. In late 2018, I set up a pro bono consulting practice to serve smaller nonprofits (<$1 million operating budget) who cannot pay the market rates my competitors and I charge. This keeps me in the game and is a lot of fun. Any 501-c-3 can apply.