Inside Philanthropy

A blog on philanthropy and nonprofit news and issues. A publication of Philanthropy Journal.

December 21, 2007

A match that charities must make

As the wealthiest Americans corner even more of the wealth, the challenge for charities is to engage the wealthy in addressing the needs of those less fortunate.

And two new reports suggest the time is ripe for making that match.

As The New York Times reports, a new study by the Congressional Budget Office shows a widening gap between the richest and poorest Americans.

Total income for the poorest fifth of U.S. households in 2005 was $383.4 billion, for example, or 63 percent less than just the increase of $524.8 billion in income for the wealthiest 1 percent.

And the top 1.1 million households had total income of $1.8 trillion, or 18.1 percent of the total income of all Americans, with the total income of the top three million individual Americans roughly equal to that of the bottom 166 million Americans.

A separate study by the University of Chicago calls into question what it says are commonly held beliefs among professional fundraisers that increasing the return on matching gifts automatically increases giving.

Simply promising to match a gift is key to motivating givers, but increasing the size of the promised match does not automatically prompt givers to give more, the study says.

But the study says it does reaffirm other research that shows people tend to “rally to support causes when they feel they are under some threat.”

Poverty and all the health-and-human service problems that flow from it represent a huge threat to our society and to its competitiveness in a global economy.

That is a powerful argument that charities can build into the compelling case they now can make to givers that their matching gifts are more likely to generate giving by other givers to address the urgent social problems society faces.

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