I just talked to my friend who is also my personal banker and is in charge of giving for his bank in my home town.  He is a great guy who cares about philanthropy.  He has been supportive of me in the community.   In our conversation, I told him that the Giving USA Report had come out and 2009 went down 3%.  He said, “Bob, I came to your house for that reception, and a fundraiser for a local museum and another for a social service organization came up to me and asked to visit sometime. I said ‘sure.’  That was seven months ago and neither has called me.”

Did you get that?  Neither one called in over a seven month period!

Giving went down $10,000 as a result of negligence on the part of two fundraisers.

I know both of them.  They had both had talked a lot about how difficult fundraising was for them in this economy.  And yet, they walked away from a gift.

That baffles me.  Why would they do that?  Are they too busy to raise money?  Are they worn out by “beating the streets?”  Did they say “no” for him?  What do you have to do?

It reminded me of a fundraiser for a domestic violence facility who said last year, “This is why we have reserves.  We shouldn’t be asking people for gifts now.  Nobody is giving any money away.”

So three different fundraisers, for very different causes, bought into the common view that no one was giving away.

Did you see the latest Chronicle on Philanthropy article on 50 large institutions that have had increased fundraising in the first quarter at more than 30% over the past year?

You may be hearing two stories.  One story is that “people are saying” no one is giving money away.  The other is based on fact and last quarter data on actual dollars raised.  It says money is available for those who are willing to go the extra mile, get creative, and demonstrate a compelling, urgent need.

Which story do you choose to believe?

The myth that small budget nonprofit organization cannot or should not pursue multimillion dollar campaigns is exactly that: a myth.

The size of your nonprofit organization’s operating budget does not dictate its fundraising prowess.

How do I know? The nonprofits who have been successful:

A battered women’s shelter with an annual budget of $90,000 raises $2.1 million

A youth summer camp with an annual budget of $300,000 raises $8 million

A community arts groups with an annual budget of $160,000 raises $3.8 million

A statewide professional society with an annual budget of $40,000 raises $7 million

A small town Boys & Girls Club with an annual budget of $280,000 raises $2.5 million

A group helping sexually abused children with an annual budget of $450,000 raises $4.5 million

A community based drug and alcohol recovery organization with an annual budget of $150,000 raises $1.3 million and 30 months later raises another $1.1 million.

There are more examples, but I think you get the point.

There are always reasons not to pursue a comprehensive campaign:

“The economy is poor.”

“We don’t have enough staff.”

“The board is not engaged.”

“We don’t have answers to a lot of our questions answered yet (I call this one paralysis thru analysis).”

“We have no big gift donors (and you won’t if you don’t do a campaign).”

“There are groups currently doing campaigns in our city.”

“We’ve never done a multi-million dollar campaign before.”

And my personal favorite, “No one knows who we are (beyond money, campaigns serve to greatly increase the visibility and profile of an organization).”

All of these dynamics were true for these nonprofit groups. Still, they went on to raise major dollars in service to the clients served by their nonprofit group.

Each of these groups had a different mission and a different type constituency. What these successful organizations have in common is a desire to better serve their clients and to serve more people in need. These groups engaged fundraising counsel and each pursued a major campaign. On any given day they had their doubts and concerns about their fundraising, but each trusted and pressed forward with the fundraising process.

Most importantly they did not allow their doubts and fears to delay or high-jack their ultimate goal of raising more money to better serve their clients.

If an organization of any size allows the current view of itself, including the size of its annual budget, to influence its future it strikes me that its future will be much like its past.

by Guest Blogger Robert Swanson, Vice Chairman, Hartsook Companies

Robert G. Swanson has worked with fundraising and nonprofits since 1987. He completed his nonprofit career as CEO of the Emporia State University Foundation. He has worked with nonprofits in 16 states and over 200 communities. His current client roster includes nonprofits in Arkansas, Kansas, Louisiana Missouri, Nebraska, and Oklahoma. He is the author of Fundraising Magic: Turning Board Members into Fundraisers.

This was not the headline of the Chronicle of Philanthropy or the news release issued by the group announcing the study.  Their headline was along the lines of, “Two thirds of Americans to give less or the same in 2010.”  If you read their articles, they say that 53% of Americans were going to give the same, and 11% were going to give less.  Therefore, 36% were going to give more.
Did you hear that? 36% WERE GOING TO GIVE MORE IN 2010!

Which nonprofit anticipated 36% of their donor base was going to give more this year?

I say again, “Huh?”  The real headline is the one I started with.  (By the way, I’ll give credit where it’s due: Philanthropy Journal’s headline was closer to the report.)

I’m certain every one of the over three hundred clients we represent like to hear that 89% of their donors would give the same or more.  That would be some pretty good news!

I had not heard of Fenton Communications prior to this survey release.  I have contacted them to talk about this survey, but they have not returned my call.  I have gone to their website and they look like a reputable company, but they clearly don’t understand the fundraising and philanthropy sector.  If they had reported that 89% of the American public either support President Obama or will support him more, it would be incredible.

One of the other conclusions of this study was that older Americans are more conservative about giving.  Really?  It has always been that way.  It would have been news if they weren’t more conservative.

The fact that only 11% are going to decrease giving is the story.  The robust love of  America has been highlighted by this study and the expression of this love is philanthropy.

I apologize if I seem to be beating up on the Fenton Group.  I am not.  I am glad that there is more research.  The Chronicle released a study that 50 large charities saw an increase in giving of 31%.  While a decline in individual giving in 2009 was seen by The Center for Wealth and Philanthropy at Boston College, it now projects that will be erased, with more giving in 2010.

Last year, millions of dollars were lost by fundraisers in America because they bought this crap about nobody giving.

They believed the glass was 89% empty.  We didn’t.

As I was listening to ESPN the other morning . . .  Wait, Bob Hartsook listens to ESPN?

Sometimes.  Okay—rarely, but that’s beside the point.

Back to my comment . . .

A national anchor was interviewing a bookie who runs the largest gambling facility in the world.  I don’t have any idea what a gambling facility is, but this person owns it.

According to this guy, Americans will spend $560 billion on sports gambling in the USA this year.  Just so you know I was listening, Las Vegas is a small part of that betting world.  Learning is my passion.

Did you read that? $560 Billion?

According to the IU Philanthropy Center’s Giving Report, about $300 billion is given away in philanthropy each year.  Because you’re reading this, I’m guessing you already know I am a critic of the amount of philanthropy we give.  We take pride in this amount, but so many needs go unmet while the growth of philanthropy is hardly a growth.

But the growth in gambling is real.

Gambling doesn’t have a Gambling Center at a prestigious university, but as I have been able to assemble the data, in 2008 $500 billion was gambled; 2007, $430 billion; 2006, $360 billion . . . then the data begins to drift.  (Maybe I should start a Center on Gambling Data for America . . . right after I start my Center on Alcohol Consumption, my Center on Vice Predictions, and my … well you get it).

I know I am preaching to the choir.

Speaking of the choir, do you realize that of the charity dollars we provide, only $100 billion goes to religion?  While $560 billion goes to gambling!  I am not into guilt, but seriously?!?

Our problem with philanthropy isn’t wealth.  We all know there is plenty of that to go around.  The problem is how we as fundraisers access wealth.  (You knew I would get to the fundraiser eventually, didn’t you)?

We access wealth through the quality of fundraisers.  I am the first to take responsibility!  I am at fault that the separation between philanthropy and gambling is $260 billion.  While I may have had my successes, it wasn’t enough.  I haven’t done my job.  But that is ending.

Maybe we should set a philanthropy goal that equates philanthropy to gambling spent.  After all, in good times and bad, the bookies keep after the gambler to find hope.  But in bad times, fundraisers back off of hope.  We make excuses about why people don’t give.

Yet in this time of financial difficulty, our company counsels with food banks that are knocking home runs in fundraising; think tanks that are raising the highest goals ever; museums that are setting limits to the amount donors can give; hospitals that are setting records; and universities that are paying bonuses to fundraisers and faculty because fundraising goals are being exceeded.

It isn’t the economy, stupid.  It is the fundraiser.

Let’s all challenge the status quo, because it’s clearly not good enough.  Let’s stand up for improvement in fundraising education and preparation.

Am I bold enough to think we can actually affect the amount of philanthropy that takes place annually?

You bet.

The press releases announcing the Giving USA Foundation Report on Giving for 2008 are out.  After all the hand-wringing . . .giving goes down about 2%.  That’s $6.4 billion out of the $314.1 billion given in 2007. 

I am stunned that there isn’t dancing in the streets.  To listen to many in the fundraising profession–the bottom had fallen out from under giving in America.  Campaigns were stopped, fundraisers gave up, foundations cried poor, corporations cited the economy.  It was the worst philanthropic period in the history of our country.

And giving is down 2%?  You know the $6.4 billion drop is less than what is predicted by the Center on Philanthropy’s research office on the impact of the President’s still proposed tax increase on families with incomes of  $200,000 a year; they estimate that to be an $8 billion hit.  Many in the media said that that loss was fine; it is still in the President’s budget. 

This year’s report by Giving USA should be heralded as a victory for philanthropy in America.  With this report, they have reinforced our pride in the spirit of America.  This past year, we withstood the worst economic disaster since the Great Depression, and giving only went down 2%.  Hardest hit were donors giving to their own foundations, which dropped 22%. Remember, however, they only distribute 5% of their asset base.  Therefore in terms of direct impact on philanthropy, this slice of the pie is only 5% of the decrease, not the gross amount. 
Giving USA’s standard of counting gifts to foundations has always stuck in my craw as a set of bad numbers.  Every other aspect of this segment of the report characterizes direct support– social services, education, etc.  But the dollars that go into a foundation are counted twice—once when they are given and again when they are distributed.  Also, a disproportionate amount of money is now being sunk into personal foundations, which still only represents 10%+ of all giving—and yet, literally none of it goes to philanthropic objectives in the year it is gifted.

The next biggest hit, according to Giving USA, was to social service organizations.  Hey, wait a minute. . .  Didn’t I hear many commentators in the philanthropic arena talk about how social service organizations do better in a bad economy?  How many foundations or individuals are telling you they are now giving only to safety-net institutions?  A 16% drop in giving to social services would indicate someone is not giving to those organizations.  In fairness, the social service arena is not always staffed with the strongest fundraising talent and many are frequently seduced by the headlines of nobody giving (see last week’s blog).   However, our social service clients who are participating in our Initiative Fundraising based on the Google Study conducted by the Center on Philanthropy (also the subject of two case studies that will come out in 2010 in Adrian Sargent’s book on fundraising cases) have fared exceptionally well this past year. 

The report indicates giving by foundations, corporations and individuals all decreased.   It cites that even bequests went down.  Wow, there is an economically driven indicator!  Can you believe fewer people included nonprofits in their estates 40 years ago because they knew there would be an economic crisis in 2008?   This accounts for nearly one third of the actual dollar decline reported. 

Over the next several weeks we are going to take an in-depth look at the Giving USA Report.   Hartsook Companies, Inc. has been invited several times to join Giving USA or its predecessor AAFRC–a trade group for consultants.  While both groups are certainly well meaning, they are largely ineffective in representing the industry.  They have made Giving USA Report a reputable report–especially after they handed it off to the Center on Philanthropy at IU and their research people to manage.  However, its finding are going to undergo greater scrutiny in the future as each segment begins to monitor its own fundraising.  As an example, Giving USA says educational fundraising went down 9% when Council of Aid to Education (CAE) reported an increase of 6.2%.  Who do you believe?  Frankly, I am betting on the CAE since they focus exclusively on their segment of philanthropy.