Drakes Bay Fundraising
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Archive for the ‘Trends’ Category

Women Gain in Donor Value

Posted by Christopher Dann
Tuesday December 10, 2013
Categories: Demographics, Fundraising, Research, Trends
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Compensation equity between men and women is as complex a topic as it is heated.

We’re not going to either wade into its complexity or approach its heat. But both aspects of the topic have been largely responsible, we assume, for the Bureau of Labor Statistics attention to it. And we have now a new report, Highlights of Women’s Earnings in 2012, with data useful to our understanding of another complex topic, the donor marketplace.

The bad news in the report, as the always reliable American Consumers Newsletter points out, is that “the decades-long increase in the earnings of women who work full-time came to an end…[and] Women are joining men in the struggle to stay even.”

But there is a lot of good news, at least for fundraising, in seeing what came of those decades of progress that brought women’s earnings as a percent of men’s, full-time wage and salary workers from approximately 62% in 1979 to 82% in 2012. Two graphs from the report illustrate.

graph1

% Change in constant-dollar median usual weekly earnings by
educational attainment and sex, 1979-2011

The table shows that women have made more earnings progress through education. And we know, coincidentally, that more women than men have been enrolled in and graduating from colleges and graduate schools in recent times. With education attainment second only to age as a determining factor in giving, we have here documentation of one perspective on the increased capacity of the donor market.

With very little exception, the donor base research we have conducted for a wide variety of nonprofit organizations over the past 20+ years have shown female majorities in the donor bases or as giving decision makers.

graph2

Distribution of full-time wage and salary employment, by sex and major
occupation group, 2011 annual averages

Of the occupational groups on this graph, bachelor’s degrees are required mostly among management, business, and financial occupations, professional and related occupations, and office and administrative occupations. These three categories accounted for 68.4% of women’s full-time wage and salary employment in 2011 (versus 41.2% of men).

Again, the good news is that the capacity for giving among women has increased very substantially, even if it is now in stasis. This doesn’t tell us either whether the disposition of women to give has changed or whether the nonprofit sector has done what it should to affect greater disposition among women to give.

It certainly doesn’t tell us where any given organization stands relative to the opportunity to benefit from this greater capacity.  That takes research.

No one ever has to give money

Posted by Christopher Dann
Monday August 12, 2013
Categories: Fundraising, Trends, Uncategorized
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No one ever has to give money. Donations come at donor discretion. So while we have to know a lot about competition within the donor marketplace, we also should know about competition for discretionary money. The former helps us position our fundraising; the latter helps us frame our business model with realistic expectations.

There’s a valuable source of good data for studying trends in discretionary spending. The Bureau of Labor Statistics’ Consumer Expenditure Survey (http://www.bls.gov/cex/) primarily serves to track consumer prices. But it provides an annual trove of data on how much consumers are spending on a wide variety of goods and services.

The editors of The New Strategist Publications draw on all that data and reconfigure its presentation for easy and convenient reference. The Survey is, they have said, “the best source of information about spending behavior of American households.”

The survey also asks about cash contributions and personal tax payments. So it gives us three valuable perspectives on trends affecting charitable giving: changes in cash contributions alone; changes in other areas of discretionary spending; and changes in cash contributions relative to changes in personal tax payments. Here are summary views of each of these three perspectives.

First, we look at trend data for cash contributions in the context of other discretionary spending. For that we’ve selected five items out of the 101 categories and sub-categories New Strategists report in their recently released Who’s Buying – Executive Summary of Household Spending, 8th Edition.

Table 1

We also selected just key fundraising demographics out of the multitude available: age ranges in which discretionary income makes its way into charity, household income and configuration where giving is maximized, and the key threshold of education attainment at which giving also becomes significant.

On the one hand, it’s a bleak picture, albeit one that shouldn’t surprise. On the other hand it offers us a clearer understanding of why recovery in areas of discretionary spending is so sluggish and extended.

Next, we looked at cash contributions and personal tax payments, knowing that there is a general functional relationship between household tax burden and giving, especially at higher levels of charity and philanthropy: the higher the tax burden, the more those who itemize deductions tend to give.

Table 2

 

Third, just looking at cash contributions alone, we wanted to check on our assumptions of key demographics. We do that by looking at the report’s useful indexing of expenditures. For Table 3, we have selected the two most important demographic indicators of giving, age and education, finding that patterns seen for decades haven’t changed.

Table 3

Trends in Public Support

Posted by Christopher Dann
Thursday January 3, 2013
Categories: Fundraising, Statistics, Trends, Uncategorized
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In a November posting Fiscal Chasm we reported and commented on data from the Urban Institute Press Nonprofit Almanac 2012 showing, across a selection of sub-sectors, the disparities between increases in the numbers of organizations from 2000 to 2010 and increases in income.

We referenced total income in that posting. That is useful for CEOs. For CDOs it’s more useful to look just at income that comes from fundraising. The Urban Institute combines private contributions and government grants into data labeled public support. If we look at the disparity between sub-sector growth and percentage change in public support, we see a different picture. Then, if we add reference to each sub-sectors share of overall public support, we get an assessment of the fundraising competition for each sub-sector.

Changes in numbers of orgs Jan 3 2013

That is what is shown in the table for a selection of sub-sectors. The data pertain to those 366,086 organizations in 2010 classified as reporting public charities. These are nonprofit organizations with charitable purpose that had $50,000 or more in gross receipts in 2010, were required to and did file 990s. While we can’t ignore the 613,815 additional public charities that were registered with the IRS in 2010, focusing on reporting public charities gives us more solid analytical standing.

Figures here showing shares of public support are different than what one regularly sees in GivingUSA annual reports. The data here are based strictly on IRS filings of reporting organizations while GivingUSA data are based on tabulations of tax data as well as econometric analyses of data and information from a variety of sources. Urban Institute data reflect only reporting religion-related nonprofits, substantially understating religious giving, which GivingUSA addresses through special (unpublished) methods.

There are only three sub-sectors where change in public support between 2000 and 2010 exceeded growth in the number of reporting organizations.

  • The extraordinary 190.2% increase in public support in the Human Services/Public Safety & Disaster sub-sector reflects the Haiti earthquake in 2010 and the lack of a major, high-profile disaster in 2000.  It’s an anomaly.
  • The 101.7% increase in International & Foreign Affairs is likely also reflecting response to Haiti channeled through organizations not classified as public safety and disaster responders. But we should also be mindful of the growing emphasis on impact investing and other forms of human health and welfare giving in the developing world, particularly by online charity facilitators such as GiveWell and GlobalGiving.
  • And in the Education sub-sector, it’s worth a contemplative pause to think about what’s happened in elementary and secondary education where public support increased 84.1%. Undoubtedly we are seeing evidence of both increasing numbers of charter schools as well as public schools’ increasing dependence on charity to supplement tax-based funding.

In all other cases, expansion of the sub-sector over the decade exceeded expansion of its public support. More organizations are competing for fewer dollars in grants and the contributions of individual donors. One or more of three things is likely happening to organizations as a consequence of these trends: they are reducing their program expenditures; they are financing deficits from endowments or reserves; or they are building sources of non-charitable funding.

The best course for building sources of non-charitable funding is in fees for services that are program related. Developing program-related service revenue not only avoids unrelated business income tax but takes advantage of skills and resources organizations already employ. It also often opens opportunities for beginning relationships with customers (or subscribers or patrons) that can later be expanded to charitable donor relationships. As smart as this course is it needs to be pursued with very careful attention to integrating strategies between the two areas of income development and between the marketing efforts for each of them. Because, as this blog often reiterates, all giving is voluntary, the downside of uncoordinated strategy is far greater for charitable support than it is for program service income.

Disruptive Demography in Atlanta, Charlotte, Chicago…

Posted by Christopher Dann
Thursday December 13, 2012
Categories: Demographics, Fundraising, Trends
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…Cleveland, Denver, Houston, New York, Philadelphia, Phoenix.

Anyone involved in raising money nationally or in any of these cities – or cities like any of them – should read and add to one’s library Alan Ehrenhalt’s The Great Inversion and the Future of the American City¹.

In his prologue, Ehrenhalt writes, “The truth is we are living at a moment in which the massive outward migration of the affluent that characterized the second half of the twentieth century is coming to an end. And we need to adjust our perceptions of cities, suburbs, and urban mobility as a result.”

With Bowling Alone, Robert Putnam helped us understand the connection between a community’s social capital and its philanthropic capacity. Alan Ehrenhalt gives us an entirely different perspective on why metropolitan areas present themselves so differently as markets for fundraising, and how they are changing.

With so many challenges close at hand, you need not be concerned (although you might be) with the future of the American City to find immediate value in The Great Inversion.

For one thing, there’s great value in knowing the demographic phenomena affecting the trends Ehrenhalt writes about. He posits that the great inversion is being prompted, for example, by a 50% increase that will occur over the coming two decades in the proportion of the population over 65 (good news for nonprofits); that while homeownership exceeded 69% in 2004 it is heading southward (not so good news); and that we are headed rapidly toward having more single-member households than households with children (news of mixed value).

While giving tends to develop during years in which people have maximum discretionary income, it tends to mature in the years that follow retirement (generally, after 65).

Homeownership has tended to correlate with community social capital stake-holding. While giving up homeownership might not make a difference among donors already committed to a community’s nonprofit organizations, the decline seems most likely to be affected by people choosing never to buy homes nor to become vested in the quality of a community’s life.

Similarly, children tend to anchor families to communities and incline parents toward communities of better social capital, while households with adult couples have consistently proved better donor households than those with single adults.

Ehrenhalt describes the precedence set by trends well underway in Chicago and New York; what’s gone right in near-suburban Washington and wrong in near-suburban Cleveland; what’s being attempted and succeeding in Denver and Charlotte, the false starts that have occurred in Houston and Phoenix, and why Philadelphia presents an “uneasy coexistence.”

While The Great Inversion helps fundraisers — indeed, nonprofit managers — set their plans and aspirations in the cities explored in the book and cities like them, it also offers valuable caution to national organizations bent on scaling their fundraising investments by treating everyone in every place everywhere the same. As much as the template designs of nationwide retail emporia have made some parts of every metropolitan area look exactly alike, there still are distinctions that attract people to settle in, join, and contribute to one city over another.  There’s the interstate highway, commercial visage of metropolitan America, which gives us all the impression of going nowhere very fast, and then there is the human visage. And there’s no doubt which one we should have.

 


¹2012, Borzoi Books (Alfred A. Knopf), New York

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.