Drakes Bay Fundraising
A Next Generation Fundraising Company

Archive for February, 2013

A Ginormous 501(c)(3)

Posted by Christopher Dann
Wednesday February 6, 2013
Categories: Uncategorized
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One 501(c)(3) will be accounting for more than 10% of all giving in 2012 and all that giving will have come from individuals. For the year ending June 30, 2012, Fidelity Charitable Gift Fund reported that donor contributions received amounted to $3.3 billion. Because of the uncertainty of charitable deductibility in 2013, surely the calendar year’s giving to Fidelity will be even greater.

The numbers are staggering and impressive. Contributions to the Fund increased 89% from FY2011 to FY2012 and the Fund’s accounts — its donor base, as it were — increased almost 5%. Yet Fidelity donor grants to charitable organizations increased only 2.4%. So the excess of contributions over grants amounted to 61% of contributions.

Clearly uncertainty over the charitable deduction is one big reason for these fantastic statistics. Surely another cause is the dominance of Boomers in the donor marketplace.

In 2012, Boomers were between 48 and 66, both the leading and core cohorts well within the prime age range of giving. They’ve been expected to take greater control of their giving than their predecessors, and donor advised funds like Fidelity’s are perfectly suited to that inclination. That inclination is also manifest in direct giving through what we called charity facilitators in our January 31 post (link to white paper: Mananging Disruptive and Transformative Changes in the Media of Fundraising) and in increasing anecdotes of challenges about how institutions are handling donors’ major gifts.

At the same time, as more Boomers approach retirement, many are also likely inclined to amass funds for charitable giving post retirement.

What has so suddenly become phenomenal is the enormity of assets awaiting giving decisions. One assumes that the “reserves” created at Fidelity are matched in magnitude at Schwab, Vanguard, and community funds across the land. This phenomenon gives new definitions to the terms planned giving and deferred giving and interesting new challenges and opportunities for fundraisers.

The 2012 Annual Report of the Fidelity Charitable Gift Fund shows that as the fund has grown, the average donor gift has declined 34%, adjusted for inflation, and the decline began well before the Great Recession. This is a trend that one would expect in the realm of donor advised funds and likely speaks more to declining giving capacity of the average donor than declining donor generosity.

In any case, the average Fidelity Fund grant in 2012 was $3,294 — we wish we knew the mean — and that offers a guide to assumption of how the reserved fund may play out over time.

Next Generation Fundraising and Drakes Bay Fundraising merged in the fall of 2013, bringing the longstanding professional acquaintances of their four principals – Tim Oleary, Carol Leister, Cindy Germain, and Christopher Dann – into a single company and combining the special resources and experiences of each to provide clients greater breadth and depth of service.

For more information about Next Generation Fundraising, click here.