As we march into 2018 in earnest, many nonprofits and donors are wondering what factors will influence donations this year. To get a sense of possible trends nationally and in the Seattle area specifically, Crain’s spoke with Kate Roosevelt, executive vice president of Campbell & Company, a nonprofit fundraising and executive search firm. Roosevelt has engaged in philanthropic consulting and helping organizations marshal more resources to do more good in the world for nearly 20 years.
Crain’s: Based on your experience, what do you believe have been the constant, steady trends, year after year, for philanthropy?
Roosevelt: I would say the magnitude of individuals supporting organizations as volunteers and as donors. Research has been collected now for more than 40 years through Giving USA. The share of giving that comes through individuals, households and couples totals about 75 percent to 80 percent year after year. Through people’s estates, it’s closer to 90 percent.
Corporate giving is certainly significant at about a 5 percent total of giving for many, many years. When you dig into that, a significant amount of corporate giving is the donation of their products to nonprofits, like public health and disease control organizations.
Crain’s: What are the primary reasons people are philanthropic? Are most donations mission-driven? Do they give because of tax incentives?
Roosevelt: In the US Trust study, Bank of America tracks the philanthropic activities of high-net-worth individuals. The top three or four motivators for giving are some combination of belief in the mission, wanting to make a positive impact in their community or the world, and that someone they know has asked them to give. It’s amazing.
The other thing that comes up often in the top three or four reasons is that it makes people feel good. They want to better society. Research also shows that tax benefits are never at the top of the list. They’re a consideration. I believe in the most recent US Trust Study of High Net Worth Philanthropy, only 18 percent of respondents cited tax benefit as a reason for giving.
Crain’s: How does/has technology affected the business of philanthropy?
Roosevelt: We know for example that the rate of online giving continues to grow at a pretty furious pace. It doesn’t mean people are being solicited online, or they’re choosing to make their gifts online. They might get something in the mail, but go online to give.
The second way in which technology has really affected philanthropy is the art and science of communications. It is easier to communicate with constituents via email, with blog posts, etc. The positive aspect of that is that nonprofits can report back to their supporters on a more frequent basis with bite-size chunks of information.
I would just say that it’s hard to draw conclusions about the impact or popularity of texting. It’s now easier, for example, to bid on auction items using smartphone apps to process a gift in real time.
The other place technology is changing philanthropy is in-house, enabling nonprofits to better use databases and predictive modeling to determine how their donors are behaving, how they should be communicating. Technology allows for a much higher level of segmentation and tailored communications. Data can drive good strategy in terms of how organizations are raising money.
Crain’s: How do you see politics/Wall Street/natural disasters and other influences affecting the philanthropic landscape in 2018?
Roosevelt: What we saw after the 2016 presidential election was a huge surge of giving to what I will call progressive organizations, Planned Parenthood, environmental defense funds, ACLU. That trend is still very much alive and in effect. While the immediacy of the election has dimmed, what has replaced it is people seeing actions the White House administration are taking are not necessarily syncing with personal values. Giving to those organizations continues to break records.
At the same time, many of those organizations are really thinking hard about how they can continue to nurture the relationships with many new donors. That takes time and resources, investing in communications, additional staff doing outreach and connecting.
We will see perhaps a second surge, or a status-quo surge, as long as people feel like the things that they hold dear are under attack – the environment, reproductive freedom, civil liberties, immigration, etc. These are issues that are value-based propositions for people.
As for Wall Street – one of the things we know based on 40-plus years of research is that giving tracks very well with the health of the economy. When it’s good, giving is strong; when it’s down, giving drops. Giving has continued to increase since the end of the Great Recession. As long as the stock market continues to perform as it has, giving will continue. How long will that last? We don’t know.
As for the latest tax reform, we are in uncharted territory. If corporations pass savings onto employees, [will employees] in turn be more philanthropic? I just don’t think we’re going to know until we know. That makes life hard and challenging for nonprofits.
We have seen, and will continue to see, a huge surge in disaster giving. If you go down the list of the number of natural disasters that devastated areas in our world, we will see an uptick in disaster giving. The challenge is they tend to be one-time gifts. Those donors who give to places like the Red Cross don’t tend to become regular donors. People in this country in particular are generous and have big hearts.
Think about Santa Rosa, Napa Valley. It’s a 20- to 30-year rebuilding effort, replacing housing stock and jobs that have been affected by those fires. It’s kind of unprecedented. Certainly, we’ve seen disasters in our past where the community has rallied together to rebuild.
Crain’s: Where and why do you see donor fatigue? What preventative steps should be taken to prevent that?
Roosevelt: It loops back to technology a bit. Increased use of technology, period. It democratizes small fundraising, how people are invited to give, volunteer, or otherwise participate. These things used to be relegated to cancer walks, and everybody can do this for anything they want to. There maybe be a moment at some point where you just start tuning all that stuff out.
From a research basis, what we know is one of the top reasons why people stop giving to nonprofits is that they feel solicited too often by these organizations. One of the things to keep in mind is thinking about the frequency of soliciting donations and communications.
It’s important to show the impact of their past gifts before you ask them again. If you don’t, it can cause a lot of donors to check out.
The bottom line is, we have some million-plus nonprofits in this country that rely on donations to exist. They play a really important part in our civil society. There’s likely always a certain state of donor fatigue because there’s so much need out there.
Crain’s: Which Pacific Northwest businesses would you say are the most consistent/unique or should otherwise be models for giving – not necessarily for amounts, but in programs?
Roosevelt: What we do hear a lot about in the corporate sphere is that employee engagement is more important than it’s ever been, whether it’s activating employees to do work in community or encouraging them to serve on boards. There is a lot of interest and intention on that and a lot of that is driven by employees themselves.
At a more macro level, it’s easy to point to Microsoft. They’ve been a leader in so many regards, from how they set up their employee gift program. It’s a matching gift program to match volunteer hours now with volunteer support. Employees can submit volunteer hours to the company, and Microsoft will then make a financial contribution. Boeing had their model for many years for loaned executives.
In a different way, even though they get criticized a lot, Amazon has done some incredible things in the past two years for nonprofits. One of which is FareStart. Basically, it’s taken its real estate assets and put them to use for nonprofit organizations. Amazon deliberately built out space in its Lake Union campus that has housing for homeless people through Mary’s Place. They offer restaurants that provides job training resources for people who want to work in food service.
I think how companies think more creatively to put their assets to use in non-traditional ways is really interesting.
Crain’s: What is one topic I didn’t touch upon that you think we should address?
Roosevelt: How income inequality is showing up in philanthropy. The research is showing some pretty startling trends. While the level of giving continues to increase, the number of people who are giving is decreasing. Rising income inequality and shrinking of middle class, to say nothing of the fact that religious participation continues to decline. That’s a huge driver. In the past, people have learned how to give through the church. This trend will definitely shape the philanthropic landscape moving forward.