Inside Philanthropy

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

February 2, 2009

Rays of light in the giving gloom

By Todd Cohen

While they reportedly are the grimmest they have been in a decade about the fundraising climate, nonprofit professionals can take heart from two recent surveys on giving by corporations and high-net-worth individuals.

A big lesson from both surveys is that, by better understanding and addressing their supporters’ values, needs and expectations, nonprofits have a better shot at securing critical resources.

Corporate giving is holding its own and becoming more strategic, according to a survey by LBG Research Institute.

Most corporations surveyed expect their giving will not change or even might grow in 2009, and half of those with corporate foundations say their foundation budgets will stay the same.

Forty-two percent of corporations and 37 percent of corporate foundations say their charitable giving will decline this year, but the institute predicts the overall decrease will fall far short of the 12.1 percent plunge in the 2001 recession reported by Giving USA.

And over 80 percent of corporations say their giving will be more strategic, meaning they will look more carefully at where their dollars go and will make sure their giving is in line with their corporate goals.

The report on high-net-worth giving, prepared for Bank of America by The Center on Philanthropy at Indiana University, which also reported the drop in nonprofits’ fundraising confidence, suggests nonprofits can do more to engage wealthy givers.

Wanting to give back is what drives wealthy givers, who care little for public recognition of their giving, the report says.

Those givers want to be connected to groups they support, and they expect those groups to be open and accountable and protect their privacy.

Wealthy givers use “involvement” as a way to pass their giving values to their children, who in turn tend to give through their own foundations or donor-advised funds.

And after parents, religious groups are the most important source of education about giving.

The main objective for the biggest gifts wealthy givers made in 2007 was to provide general support and make a long-term investment in the organization.

Wealthy givers also are becoming more strategic in their giving, and they have dramatically increased their use of professional advisers.

“We are noticing that the turbulent economic environment has, not surprisingly, also motivated these individuals to play a more active role in charitable decisions in terms of what they give, to whom and when,’ Cary Grace, Bank of America National Institutional Advisory Solutions Executive, says in a statement.

The two surveys suggest corporations and wealthy individuals can be valuable partners for nonprofits, the kinds of partners that nonprofits need more than ever in a tough economy.

And while they give to causes that address important needs, those givers’ giving mainly reflects their own values and goals.

Those givers also are being a lot more intentional about their giving.

Corporations’ growing focus on aligning their giving with their business gives nonprofits a great incentive to build strategic partnerships that reflect the companies’ business and community values.

And wealthy givers’ desire to provide operating and long-term support, to be involved with the groups they support, and to involve their children in their giving gives nonprofits great incentives to find more effective ways to engage those givers.

Because wealthy givers work with professional advisers and learn a lot about giving through their religious organizations, nonprofits also should make sure they are telling their story to advisers and religious organizations and working with them to reach potential givers.

The recession is fueling greater demand for nonprofits to address immediate problems and their root causes.

To do their job effectively, nonprofits need to do a better job understanding and addressing the needs of givers.

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