Stratagems, November 2021

Mark Your Calendars -- November 15th

All of us benefit from the good works accomplished by professional non-profit leaders as well as the millions of people from all different backgrounds who donate precious gifts of time talent and treasure to champion good causes. And philanthropy’s role was never as important as it was over the past year. So, it is altogether fitting that we celebrate this glorious commitment to improve the world and the lot of others on National Philanthropy Day (NPD), November 15th. The purpose is to recognize the great contributions of philanthropy — and those people active in the philanthropic community — to the enrichment of our world. NPD was originally conceived and organized by Douglas Freeman, an Orange County attorney in the 1980s, and the first official events were held in 1986 after President Reagan signed the official proclamation. The timing is perfect as we enter the season for giving thanks. Last year, more than 130 Association of Fundraising Professionals (AFP) chapters held NPD events and activities across North America. Be sure to thank all the unsung heroes in your community who, through knowing heads and honest hearts, make the world better on November 15th and on the 364 other days of the year.

Non-Profit Work Ethic

Teddy Roosevelt said something profound on September 7,1903 at a Labor Day celebration that perfectly captures the spirit and amazing energy of the non-profit sector: “Far and away the best prize that life has to offer is the chance to work hard at work worth doing.” Andrea and I love working with so many dedicated professional and volunteer non-profit leaders who, through a variety of compelling missions, touch, improve and save lives. We are non-profit strong and growing stronger every day.

Donor Confidence

A Campbell Rinker survey shows that despite increasing economic anxiety among America’s middle class, a greater share of people who gave at least $20 during the previous 12 months plan to continue giving than at the start of the Covid-19 pandemic. Eighty-seven percent of those donors polled in July said they plan to continue giving. That’s a sharp rise from 78% in September of 2020. Of those donors, 59% said they plan to give “more sparingly or carefully” than previously, up from 52% in September 2020. Seventeen percent of donors said they planned to give less in 2021 than previously, compared with 28% in September of 2020 who said they planned to give less that year. Meanwhile, 26% of donor households are finding their financial situation very or extremely challenging, up from 24% in September 2020 and 22% in April 2020. However, donor confidence about the year ahead appears to be growing: 63% expect the economy to stay the same or improve in the year ahead, compared with 51% who said that in September of 2020 and 40% in April 2020.

Challenges for Small Non-Profits

More than half (53%) of non-profits have had greater demand for their services during the COVID-19 pandemic, and one-third are experiencing higher operating costs. Four in 10 non-profits have cut operating costs, and one-third have pared back programs or services. That’s data from the Nonprofit Leadership Survey Report 2021 by Grassi Advisors & Accountants. Cutbacks hit smaller non-profits harder than larger ones, with 48% of those having costs less than $5 million experiencing cutbacks, compared with 37% of those with expenses in the $5 to $25 million range and 36% with costs greater than $25 million. Non-profits have explored a variety of cost-cutting and revenue-supplementing activities. Slightly fewer than one-quarter (23%) have renegotiated leases and other contractual financial obligations. Some 7% have terminated automatic payments and 15% have increased their draws on their endowments. Five percent merged with another nonprofit during the past year. Human capital is also being affected. Nearly one-third of nonprofits had layoffs and furloughs, while 12% reduced employee benefits. Two in 10 are operating under a hiring freeze. What will non-profits need for future success? Funding, funding, funding. While 60% said their top priority was attracting and retaining qualified people, the next three priorities bunched revenue concerns, with 56% seeking improved fundraising, 55% indicating a pressing need for more funding for overhead costs, and 54% citing the need to stabilized revenue and cash flow.

Legacy Giving Spike

The number of Americans choosing to make charitable bequests in their wills is increasing — 19% of wills and trusts made on FreeWill from June 2020 through May 2021 included a gift to charity. This is an increase from 13% over the prior period. The average value of a charitable bequest given by a will-maker on FreeWill is more than $41,000. Donors under 25 are much more likely to include bequests in their estate plans. Even though the current value of these gifts is small, and the realization is far into the future, they present a significant opportunity for fundraising and stewardship as their wealth grows over time. This is especially important as most gifts are given as a percentage of a donor’s estate, rather than a fixed dollar value. Women are more likely to make estate plans and slightly more charitable than men across age, marital, and parental status. Even though their average gift value is lower, and they have smaller estate sizes on average, the sheer number of female will-makers giving to charity means that they surpassed men in total bequest dollars committed for the first time in reporting history. In their 3rd annual Planned Giving Report, FreeWill found that increased wealth, a younger age, being female, and having fewer family relationships are the greatest indicators of a will- or trust-maker becoming a legacy donor. Pet owners continue to be some of the most charitable will-makers: 26% of estate plans that included beneficiaries for pets also included a charitable bequest. Only 15% of estate plans without pets had a gift.

Affluent Step Up

Bank of America research shows that average giving to charities by affluent Americans increased by 48% last year compared to 2017 ($43,195 vs. $29,269). Amid pandemic challenges, nearly 90% of affluent households gave to charities in 2020, comparable to past years. At the same time, the study found notable shifts in the way donors give across different generations, representing significant implications for philanthropists and the non-profit sector going forward. The households in the study have a net worth of $1 million or more (excluding the value of their primary home) and/or an annual household income of $200,000 or more. The average income and wealth levels of study respondents were approximately $523,472 and $31.1 million respectively, with median income and wealth levels of study respondents approximately $350,000 and $2.0 million, respectively, and respondents’ average age was 52.5 years. Key findings indicate:

* Issues-based philanthropy is becoming increasingly important.

* Social and racial justice issues drew interest and support.

* Participation in sustainable/impact investing nearly doubled.

* Direct digital giving is growing in popularity.

* Affluent individuals who volunteer give twice as much as those who don’t volunteer. Although fewer people volunteered last year due to the pandemic, affluent donors who did spend time volunteering donated more than double the amount to charity on average than those who did not volunteer.

Stretching Gift Amounts

We love donors for the generous and precious gifts of time and money that they make to advance our non-profits. We love them even more when they can increase the size of their gifts to magnify the impact on the mission. Fortunately, there have never been so many options to help donors stretch the size of gift amounts. Our thanks to Candid Learning for featuring our guest column on this topic.

Overcoming Fundraising Fright

Let’s face it: Most people are afraid of fundraising and especially asking for gifts. A better description might be terrified. So, I turned to seven members of the Eskin Fundraising Training Brain Trust, whom I consider among the most respected and brightest authorities among fundraising consultants across the country. Read my LinkedIn feature that shares their advice and counsel to give to board members and other volunteers who partner with us to advance the missions of our non-profits.

Anonymity

Did you ever wonder why some of our donors prefer to remain anonymous when making gifts? Of course, we prefer that they agree to make their gifts public so we can use that momentum to leverage gifts from others. But Greg Warner, Founder of Market Smart, points to the following six reasons behind understanding anonymous gifts:

1. They do not want fundraisers from other organizations to ask them for money. This is the #1 reason according to the Center on Philanthropy study conducted in 1991 titled “Survey on Anonymous Giving.”

2. They have religious reasons for anonymity. This is the #2 reason according to the same survey study mentioned above.

3. They get pleasure from giving, not from being thanked for their donations.

4. They are humble/shy and simply don’t want notoriety because it makes them uncomfortable.

5. They might even be sort of embarrassed about their level of wealth (especially if they did not earn the money).

6. They do not want fundraisers from the organization to which they gave to harass them and ask them for more money.

On the Bookshelf: How We Give Now

In How We Give Now, Lucy Bernholz, Senior Research Scholar at Stanford University’s Center on Philanthropy and Civil Society and Director of the Digital Civil Society Lab, shows that philanthropy is more than writing a check and claiming a tax deduction. For most of us — the non-wealthy givers — philanthropy can be a way of living our values and fully participating in society. We give in all kinds of ways: shopping at certain businesses, canvassing for candidates, donating money, and making conscious choices with our retirement funds. We give our cash, our time, and even our data to make the world a better place. Bernholz takes readers on a tour of the often-overlooked worlds of participatory philanthropy, learning from a diverse group of 40 resourceful givers. Donating our digitized personal data is an emerging form of philanthropy, and Bernholz describes safe, equitable, and effective ways of doing so, for example, giving genetic data for medical research through a non-profit genetics organization rather than a commercial one.

$29 Billion Calling

U.S. savings bonds helped finance World War II and for decades provided risk-free investments for average Americans, including millions of children who received them as boring but practical birthday presents whose full-face value loomed years away. But they fell out of favor in the 1990s with the rise of the Internet and a plethora of potentially more lucrative and exciting investment options. Now, the humble paper savings bond has become so forgotten that the Treasury Department says 80 million of them, worth a total of $29 billion, have fully matured but have not been redeemed. Some of that money might be yours.

Quiz: World Series Winners

Baseball fans: This is your time of the year. Every game counts as major league baseball teams make their way forward to win the ultimate prize — the World Series title. Match the following teams with the number of World Series titles captured over the years to answer this question. Answers are at the bottom of this page.

1. Cardinals a. 7

2. Dodgers b. 8

3. Giants c. 9

4. Red Sox d. 11

5. Yankees e. 27

Stratagems is published monthly by Jim Eskin, Founder of Eskin Fundraising Training, LLC. We offer workshops and customized training sessions for board members, staff and volunteers of non-profit organizations of all kinds and sizes. For details about our services and information, or to find out how to schedule a training session for your organization, visit our website. Follow our events on Facebook, and read more articles about philanthropy on our LinkedIn page.

Jim Eskin, Founder

Eskin Fundraising Training

Email: [email protected]
Cell: 210.415.3748
www.eskinfundraisingtraining.com

ANSWERS TO THIS MONTH’S QUIZ: 1=d, 2=a, 3=b, 4=c, 5=e

Jim Eskin

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