Tuesday, June 21, 2022

GIVING USA REPORTS $$484.85 BILLION DONATED IN CALENDAR 2021

Today, June 21, 2022, the Giving USA Foundatiion issued its annual report on US philanthriopy for calendar 2021. 

Key findings :

  • Giving remained strong in 2021, reaching a total of $484.85 billion.
  • Between 2020 and 2021, corporate giving increased 18.3% in inflation-adjusted dollars, individual giving was fairly flat, foundation giving declined -1.2% in inflation-adjusted dollars, and bequest giving declined by -11.4% in inflation-adjusted dollars. However, all four sources experienced positive two-year growth.
  • Giving to health and arts rebounded after a difficult 2020. Giving to arts, culture, and humanities grew 27.5%, and giving to health grew 7.7% in 2021, bolstered by a strong stock market and a return to in-person activities.
  • Giving to international affairs, human services, and education experienced low growth or declines in 2021 after reaching record-highs in 2020.
  • Giving to the environment, animals, public-society benefit organizations, and foundations all grew by 10% or more in 2021.
  • The environment is a smaller category of giving, but shows impressive growth, and boasts a broad range of donors with different income and age levels.
  • Online giving represented 12% of total giving in 2021. 
This data has been published annually since the mid-1950s For the past several years, the research has been provided by the Indiana Universirty Lilly Family School of Philanthropy, in partnership with the Giving USA Foundation. 

Overall, it is the most complete and comprehensive information available from any source. That said, it is best to accept the data as provisional, if not incomplete. For example, remittance philanthropy is not included, likely because of the difficulty of collecting data. However, it is estimated, from other sources, to be in the billions. Yes, it can be argued that remittance giving cannot be defined as philanthropic, strictly speaking. However altruism is common to both charitable and remittance giving.

Estate giving is also underestimated because most estates are not large enough to have to file a federal tax return, the data source relied on. Religious giving data is also problematic because religious organizations -- e.g. the Salvation Army, an enormous charity -- and churches, mosques, synagogues, etc,., are not required to file 990s. For that reason, giving to religion (despite a sharp drop in regiously-affiliated individuals) is arguably higher than what's reported. 

Also corporate giving estimates are slippery because much of the giving is written off as marketing which is, of course, a deductible business outlay. 

At this moment, the US economy appears headed for a recession, driven by supply shortages and war. How that will affect this year's giving remains to be seen. But in past recessions, charitable giving held up fairly well. 

Let us hope!

Friday, May 13, 2022

THE CRYPTO COLLAPSE

For the last few years, when the subject of cryptocurrency donations arose, I invoked the standard advice:  convert to dollars, ASAP, the standard practice that charities should follow in handling gifts of stocks, bonds, boats, real estate or any other in-kind gifts, etc. But inside my head, I could never shake that mackerel-in-the-moonlight feeling: about crypto: nice shine, terrible smell. 

Exponential cryptocurrency growth, more or less paralleling the two plus years of the Covid "crash,"  marked by sharp speculative highs and lows, didn't seem to curb the interest of development officers and consultants in chasing crypto gifts - mainly from younger new-to-giving donors -- who bought in at low prices and were suddenly sitting on serious money. Several start-ups sprang up to serve nonprofits as fee-paid brokers in converting crypto gifts to dollars.   

At its peak, one bitcoin ( the crypto  leader by far) sold at over $60,000.This morning, Friday the 13th (read into that whatever you will) the price was roughly $30,000. And, this morning's New York Times front page reported on the $300 billion collapse of the crypto market in just four days

Bottom line: Anyone who wants to gift cryptocurrency to your charity should do the conversion to dollars first. Period. Full stop.   

Thursday, June 17, 2021

CHARITABLE GIVING IN 2020

Our home page reports on charitable giving in 2020: $471.4 billion, a remarkable achievement made possible largely by high growth in the stock market, stimulating both gifts  from individuals and families; and from foundations, whose portfolios also jumped in value as a result of investment gains.

In a piece I published  in this blog, and then (much edited) in Nonprofit Times this past May, I said that Giving USA data, though arguably the best estimate we have, is probably a vast undercount: remittance giving is not counted at all, and I regard that phenomenon at least as much philanthropic as the church collection plate, because it is. motivated by philanthropic impulse, though seldom mentioned as such. Bequest giving is also undercounted because most of it is below the tax reporting threshold requirement; Giving USA relies on IRS data. Next, in comparative terms, gifts from individuals are infrequently itemized; and lastly, an undeterminable amount of corporate giving is written off as a business expense. For a corporation, a charitable deduction is the same as any other business expense. Charitable giving bestows no additional, nor lesser, advantage. 

The takeaway, in any case, is that many of us (including me) expected disaster when Covid shut down the economy in March, 2020. No one projected the hit stock market growth, fueled largely by the FANGs: Facebook, Amazon, Netflix and Google; by robust consumer spending despite high unemployment (mainly in lower paying service jobs); and by the Trump administration's tax cuts for the wealthy and for business. There is no question that lots of money sloshing around, even in the face of over 600,000 Covid deaths in the US, propelled astonishing growth, an all time record since the organization first reported on charitable giving in (I think) 1955. 

Monday, March 8, 2021

Update A Seminal 1975 Report on American Philanthropy

  

The time has come to revisit and update an influential report on philanthropy published in 1975. There has been nothing like it since. It’s time for an update because institutionaly philanthropy has changed considerably; the next 50 years will look very different than the last. The absence of broadly recognized philanthropic leadership – beyond just their giving -- in the mold of a John D. Rockefeller or an Andrew Carnegie or a Julius Rosenwald is striking.

There is no single organization, foundation, think tank nor academic institution with a sufficiently commanding or unifying national presence to lead a new organization. Instead, it should be established by Presidential action and privately led, managed and financed. This update matters immensely because donors, the recipients of charitable dollars, the boards of trustees and the mechanical enablers – the fundraisers, nonprofit executives and the work force, over 10% of all private sector employment -- will all be affected because the challenges are greater than ever before. Private philanthropy has a vast responsibility and equally vast potential to address national and global problems. For now, that potential is unmet, seriously underutilized and insufficiently supported by private donors as well as government funders. That said, ongoing Chronicle reporting since last December highlights the extent to which this concern is  now top of mind for many of the nation’s top philanthropists

 

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Why now? Six months into the Trump presidency, I wrote on the company blog that “…  we now live in an alternative universe: Robin ‘Dooh’ steals from the poor and gives to the rich. … [P]unishing the poor for being poor is a blood sport. … Trump's fixation on erasing Obama from the collective memory puts his overt racism, his Obama birther-ism obsession, his anti-Muslim travel ban and his loathing of the poor (‘losers’) in one steaming cauldron of know-nothing hate.” I put off the update idea. Things only got worse from there. 

Now, we are in an epic struggle with two interlaced pandemics, one new, one chronic. First, a year of highly lethal Covid-19. Over 500,000 dead but, finally, hope in the offing.  Through his know-nothing denial of science Trump and his sycophants thoroughly mismanaged the pandemic. 

Second is the torturous history of race in this nation, “the American dilemma,” as Swedish sociologist and Nobel Laureate, Gunnar Myrdal thoroughly addressed in his epic 1944 masterpiece of that name; and similarly characterized as our national tragedy by W.E.B. DuBois. With his inflammatory rhetoric, his boorishness and the tacit incitement to violence that brought about the events of January 6th, Trump greatly exacerbated racial unease conjoined to a killer disease disproportionately affecting the poor and people of color, all too often the same people. We live in a Manichean time, a 50/50 nation. As a people we are capable of so much more, certainly in our philanthropy. 

 

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Gates or the Ford Foundation may seem obvious leaders for such an initiative and perhaps come near. They, Soros, Buffett, Bloomberg and others are leading givers and enormously generous people; they mean well and do so much good. But none makes sufficient impact systemically, by which is meant that beyond their own philanthropic directions, interests and wealth a general concern for the philanthropic weal and its moral place in American life Is lacking. For example, the Giving Pledge is widely touted yet the number of multibillionaires, poor billionaires and the echelons just below -- actually signing on -- is far fewer than the real potential.  Further, the power and the interests of mega-philanthropists don’t always align with the concerns of other actors who, understandingly, are unlikely to take them on. The dilemma, of course, is that to bring off what will be a costly undertaking cannot succeed without them. 

The Giving USA Foundation, publishers of the annual data aggregated by the Center for Philanthropy at Indiana University, show that US philanthropic output has never pushed much beyond 2.4% of GDP. Why not? Growth of the economy overall is one factor, as in all ships rising on the rising tide. Thus, there is more in absolute dollars and more giving. But there is little upward trending in the percentage itself. Interestingly in most years, GDP rises around 3%. So does actual inflation. No net gain. But are that data a sufficient explanation for failing to reach an achievable 3 or 4% or more of GDP? 

It’s not about the money. 

Money abounds. More wealth has been created in the last 25 years than in the past 250. The much ballyhooed intergenerational transfer of wealth is estimated at $75 trillion by 2050. 

 

 

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Roughly 50 years ago, a mostly pale, male cohort of a hundred plus civic leaders was assembled by David Rockefeller. Ably led by John H. Filer, a Connecticut insurance executive and by an outstanding public servant, John Gardner, the hard slog was the work of a small paid staff of the experts one would expect. The result was the report of the Filer Commission on Private Philanthropy and Public Needs, quoted by many and read by few. Even so, it had an outsize impact if only because nothing like it had ever been attempted before and its impact has been enduring:

 The Filer report spawned The Program on Non-Profit Organizations at Yale University and The Lilly Family School of Philanthropy at Indiana University; it stimulated formation of the Independent Sector and the National Committee for Responsive Philanthropy. It encouraged the graduate and undergraduate programs in philanthropy and nonprofit management that have proliferated in top-tier academic institutions. It’s probably unfair and maybe inaccurate to say that Filer is now consigned to history’s dustbins. Yet everyone giving and working in the field, whether they know it or not, has benefitted from the Filer effect.  

 

 

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A Presidential Commission must reflect total diversity in leadership and staff, reflecting the makeup of the nation as it is -- and as it will become over the next 50 years. At a minimum, there are ten principal issues for new or renewed consideration; they have been kicking around for years but usually addressed independent of each other. 

> Current philanthropy is woefully out of touch with the changing demographics of America. Our Eurocentric notion of philanthropy that has historically defined and undergirded American philanthropy is increasingly irrelevant. What will replace or amend it? “Eurocentric” means white power, white conquest, white enslavement and white domination over any color other than white, rationalized as divinely inspirited or commanded. It’s been pumped into white brains for multiple generations of public, private and parochial school students from pre-K to postgraduate and leeches into us in countless other ways, consciously and not. No wonder then that mostly white boards and staffs, north of 80% in recent studies, still remains the predominant norm for private nonprofits. They don’t reflect the diversity and entirety of the American people. That will change profoundly over the next 50 years; indeed, the change is well under way. Pluralities already exist; majority is coming.  

> With so much wealth, why is the giving needle stuck so far below even 3% of GDP?  One might argue that there is an undercount because Giving USA doesn’t actually measure all sources of giving: for example, gifts-in-kind; the multi-billion dollar remittance economy which is just as philanthropic as the collection plate; corporate charity which is passed off as marketing; underreporting on the IRS 990 from which the data are drawn; and the magnitude of smaller, non-itemized deductions is not fully captured nor even known. 

> The charitable tax deduction is the same for all gifts to all charities. Why? Could the deduction be incentivized by sharply increasing it for the charities and community based organizations less able to fundraise effectively but who actually reach the abject poor – some 15% of the nation’s population – and likely climbing because of the new poor and the near poor -- men, women and families suddenly broken by Covid-19?  

> Should idle capital be put to work? Should the undistributed assets of donor advised funds lying fallow and the way too low 5% rate of required foundation payouts and no term limits (other than voluntary) on foundation perpetuity be weighed against a greater good? Gates and a few other foundations have sunset provisions. Most don’t. Why not a fixed life span followed by asset distribution to a free-standing community foundation, or directly to qualified charities totally independent of the donor? Giving USA reported foundation giving in 2019 at roughly $76 billion. If that more or less represents 5% of the required payout, $1.52 trillion idles. A fixed life span would incentivize asset reduction. A similar life span would have the same result on the undistributed capital held in donor advised funds, which stood at $37.12 billion in 2018, according to the National Philanthropic Trust. The tax deductibility provided to foundation and DAF gifts is subsidized. By the rest of us. This  was specifically addressed in the Chronicle’s December issue. Some of the nation’s largest private foundations, and prominent scholars, on the 2020 Giving Tuesday, joined forces urging Congress to adopt a set of tax proposals intended to speed up distributions from foundations and donor-advised funds. The federal government could be allocating far more than it does it does to private sector initiatives. Nonetheless, non-governmental philanthropy injecting $2.3 trillion in private funds would be profound and make no difference in the rapidity of new wealth creation. 

> Health care systems, originally established as charities, many by religious groups, enjoy tax-free status. But the amount of true charity care rendered by most is relatively miniscule in ratio to their overall budgets; even that cost burden is shifted to insured and self-pay patients. Should there be a separate category of nonprofit status for all but community hospitals? And should first-tier teaching hospital systems be separately treated in the tax code? Why not a new hybrid form of charity corporation, part tax deductible, part not? Like a ‘B’ corp. – only in reverse. Notably, private philanthropy is no longer the essential revenue driver for these large entities and will be even less so in the fully nationalized health care-for-all system that any developed nation should provide and that is likely inevitable for America in the next decade or so, if not sooner. 

> Can community foundations optimally compete for donated wealth against nominal nonprofits like the Fidelity Charitable Gift Fund, the nation’s largest “charity?” The short answer is no way. They simply do not have the financial resources to take on Fidelity or the other funds. FCGF is a spinoff of a mammoth for-profit drawing on its huge customer base. Should Incentivizing deductions to community foundations also be considered?

> Who/what is a volunteer? Indeed, what is voluntarism? Private charity now employs more than 10% of the US workforce and technology has driven out or greatly reduced many traditional volunteer roles. With both parents working, often in multiple jobs; with a growing number of single household and single-parent homes; with the aging population and consequent immobility of many elderly requiring home care; and with less trust in many once revered institutions – what is the essential need for hands-on volunteers? How do we use volunteer labor most effectively and efficiently? Where do we find them? 

> What is a profession? The fundraising industry is quite large and essential to the philanthropic economy. The largest group, the Association of Fundraising Professionals, alone has 30,000 members (15% of whom are from outside the US). Associations are also built around health care philanthropy, higher education and other particular interests. Beyond them are even more people working more than 50% of their time in fundraising. No one knows the exact number but the highest estimate seems to be plus or minus 100,000. AFP and others have certification programs.  But a profession is principally characterized by a license to practice. Licensing fundraisers is stoutly resisted by the associations and has been bumping from here to there for decades. No state has enacted a license requirement. Yet. Should that change?

> In 1980, Carl Bakal’s book Charity USA was published, advocating an SEC-like regulatory authority.  On the plus side, uniform charity regulation instead of the present hodge-podge of state regulations, outmoded statutes, uneven enforcement; faulty definitions of terms such as “fundraiser” or “solicitor;” and no regulation of the internet because in a democracy, thankfully, it is impossible even at the federal level. Why have First Amendment issues of free speech and interstate commerce affecting nonprofits never been fully litigated? Each state can impose advance registration and a fee for arguably commercial interstate messages transmitted by traditional snail mail. The other ‘junk’ in your mailbox is untouched by state registration. Call it prior censorship if you prefer. The same messages transmitted online can’t be touched by the states. On the minus side federalizing charitable oversight is strongly opposed. There is no reason to believe it would be a better alternative than the SEC or IRS. Is oversight impossible because of the fragmentation in rules and regulations and/or because of the First Amendment Implications in regulating the internet?  Is there another way? Yet, the need for some kind of watchdog, with fangs, seems apparent if collective philanthropy is to inspire and maintain public confidence.   

> Why is the IRS Form 990 that most charities must file annually of so little help? It is cumbersome, usually at least two years out of date when it is released; and creakily incomplete: e.g., religious institutions (like the Salvation Army, one of the country’s largest charities) are exempt from reporting. Megachurches are big businesses; why should they be exempt from reporting? The idea that church-state separation is somehow compromised without a reporting exclusion is, on its face, preposterous. Does oversight of charities even belong within the IRS? 

> Human service organizations, and others providing housing, education, employment and training services rely on an intertwined relationship with local and state governments as the provider/deliverer of publicly supported assistance. But that help does not adequately support administrative and overhead costs. Waiting for government reimbursements often brings human service agencies, even large ones, to the edge of insolvency. What is the best way to reframe this picture? 

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A Presidential Commission on US Philanthropy will be a costly multi-year project requiring broad participation, strong leadership, adept management, a high threshold for controversy and, most Important, a principled rejection of the Prussian Army defense, “this is the way we’ve always done it.” It adds up to a challenging proposition but not a reason to pass it by. In hindsight, the Filer report was far more than just a good showing. With the tools we have now but lacked then we can do better. There is precedent in the Points of Light Foundation and other such initiatives by both Democratic and Republican administrations.     

But the main thing is that philanthropy can only thrive in a civil society. Restoring that civility is a task we all should step up to.  A decent, empathic man has come to high office. This is an opportunity best not missed. 

 

 

 

 

 

 

 

Tuesday, November 17, 2020

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).

 

Thursday, June 18, 2020

$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. 

Thursday, April 23, 2020




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.