RECENT TRENDS IN PHILANTHROPIC GIVING
For many cultural organizations, the last days of summer coincide with the closing months of the fiscal year ? a natural time to review recent financial performance. In such a review it can be quite helpful to access current information on philanthropic giving nationwide rather than rely on past conclusions or general impressions about recent giving patterns. By reviewing updated data on national funding trends, organizations can place their own financial results in a real-world context, a perspective that can be quite helpful in shaping successful long-term strategies. Recent research from two widely regarded sources, Giving USA and The Foundation Center, is easily accessed on the web and can help to provide such context.
CHARITABLE GIVING RISES
Giving USA 2014, a report from the Giving USA Foundation based on research conducted by Indiana University Lilly Family School of Philanthropy, provides an excellent overview of philanthropy nationwide. It estimates that total charitable giving from all sources for 2013 was an estimated
$335.17 billion, an increase of 4.4% (3% in inflation-adjusted dollars) from revised totals for 2012. Individual donor gifts accounted for 72% of the total. Foundation giving stood at $48.96 billion ? an increase of 5.7% over 2012 (the report attributes much of that increase to a 10.5% rise in gifts from community foundations). Corporate giving, which includes in-kind gifts, actually declined; dropping by 1.9% from 2012 ? though corporate foundation giving was actually up by 5%.
The report finds that the arts and culture sector received an estimated $16.66 billion in contributions in 2013, up from the $14.4 billion originally estimated for 2012 – an increase of 15%. Arts organizations received 5% of total estimated giving across all sectors and from all sources in 2013, up from the 4% reported for 2012.
“We see that giving to the arts, health, the environment, and education has been consistently rising in the last three years,” said Giving Institute chair David H. King. “As the economy recovers, donors are restoring funding to those sectors in a strong way.”
An Executive Summary providing context and insight into this year’s report is available at: http://store.givingusareports.org/. The complete report, published in June 2014 and including detailed data analysis for 2013 information, is available there as well. It is offered in several formats, including a PowerPoint presentation package.
FOCUS ON FOUNDATIONS
Although Giving USA 2013 reports that foundations represent only 15% of nationwide giving, for many arts and culture organizations, foundations are a critical source of support. Foundation Giving Trends and Foundation Growth and Giving Estimates, two annual reports that provided valuable insight into foundation giving patterns in the past, have been combined into a new publication: Key Facts on U.S. Foundations. Although the final version will not be published until late fall, its publisher, The Foundation Center, has prepared a “Preview” online that provides a good overview of recent foundation giving activity. The Preview is available for free download at http://foundationcenter.org/gainknowledge/research/nationaltrends.html.
The Foundation Center estimates there are currently 86,192 grant making foundations in the United States (that’s up from 81,700 in 2012) and projects that giving by foundations in 2013 was $54.7 billion ? up from $50.9 billion the year before. This figure leads them to conclude that foundation giving now represents 16% of the national total from all sources ? a slightly higher figure than that offered by Giving USA.
Based on its annual survey of over 1,000 active foundations, The Foundation Center projects that foundation giving will “continue to grow a few points ahead of inflation in 2014.” While they forecast “ambiguity” in economic indicators during the next few years, they suggest that individuals who have profited from recent stock market gains will likely start new foundations and that family foundations will likely show a higher rate of growth than foundations overall.
Although information on the arts and culture sector is not yet available, the Preview offers an overall picture of general trends in foundation giving as well as information on the top foundations ranked by total assets and total giving. Not surprisingly, the Bill and Melinda Gates Foundation far outranks any other foundation in both categories.
FUNDRAISING STRATEGIES IN AN UNCERTAIN ECONOMY
Despite (slow) growth and recent gains in financial markets, fiscal uncertainty continues to affect the economy and impact giving. It’s natural for development professionals and governance leaders to be cautious when setting new fundraising goals. Here are some tips to help maximize results:
Continue Cultivation
Many organizations react to an uncertain economic outlook by reducing expectations. Some scale back development and outreach efforts. In most cases, this overreaction is a mistake, particularly in the long term. A tight budget, for example, should never prevent an organization from continuing donor cultivation, education, and prospect research. If realistic financial projections show potential trouble ahead, it’s usually better to view such warnings as a challenge to maintain or even increase the resources devoted to development.
Valuable tools are available on the web to help organizational fundraising efforts achieve their full potential when budgets are tight. One of the most important, www.guidestar.com, provides detailed information on the internal structure, giving guidelines, and the financial capacity of foundations across the United States. This indispensable resource also provides membership lists of every organization’s board of directors, an often overlooked opportunity for identifying personal connections between your organization’s key stakeholders and the leadership of foundations which might offer it support.
Strengthen Relationships
Speaking of stakeholders, make sure you are fully enlisting the energy, enthusiasm and expertise of your Board members and other volunteers. Often, a review of untapped stakeholder resources will uncover unexpected levels of skill, expertise in fundraising, and even giving capacity in people who are eager to contribute their time and talent. Often overlooked, stakeholder stories of “why” they are involved in your organization convey value and provide compelling reasons for others to give their support. Strong ongoing relationships between staff, board members, and volunteers can be a key component of successful fundraising, creating a momentum and level of engagement that can be a significant factor in long-term success.
It is also important that key leaders within your organization have met the program officers and other contacts at the foundations that support it and that they continue to cultivate these relationships. Take time to listen carefully to what these contacts are seeking to accomplish to discover new ways to tell your organization’s story. Take advantage of any opportunities to be introduced to potential contacts at new foundations and businesses that may support your goals. When contacts change, make sure to welcome them and establish lines of communication early in their tenure. Such efforts can be time consuming, but they are an essential investment in the health of your organization. Only by maintaining such relationships will you understand how to best communicate your organization’s case for funding.
CONCLUSION
Without a general picture of how the current economic climate is impacting giving, it may be difficult to fully understand the reasons for changes in your organization’s contributed income results. Successful fundraising doesn’t happen in a vacuum. Using resources like those mentioned above can provide important context to your organization as it develops attainable fundraising goals, identifies new opportunities, and shapes new strategies for long-term success.