Nonprofit Trends: Charitable Giving in 2013

Earlier this month, the company I have the privilege of leading released its 2012 Charitable Giving Report. Although we look at giving all the time, releasing a charitable giving index every month, this report was a time for us both to reflect on the year behind us and to hear from experts from a variety of nonprofit sub-sectors.

The headline from the report wasn't overly optimistic: charitable giving in 2012 was nearly flat, up 1.7 percent (not adjusted for inflation) as we all continue what's turning out to be a very slow economic recovery.

If you happened to have seen my 2013 predictions, you already know that I don't think giving will increase a whole lot this year either. And, honestly, the fact that we had a surge of year-end giving in response to Superstorm Sandy makes the challenge for 2013 even greater. Without a disaster, which always creates spikes in giving, it might be even harder to move the needle much on overall donations.

So what does this all mean? Nonprofits must optimize the conditions for fundraising success. To be clear, the fact that overall giving is where it is does not mean that individual organizations can't buck the trend. But reality tells us that many organizations struggle. If you are a donor to or board member of a nonprofit that is struggling, then it's important you understand what can and will make a difference.

There are two myths that seem to be at work when it comes to fundraising. The first is that if you hire a good director of development, you're fine. That person will handle it all. The second is that it's the board's job to raise all the money you need. The reality is that you need both good staff and an engaged board, and beyond that, a culture of philanthropy.

CompassPoint and the Evelyn and Walter Haas, Jr. Fund, recently released a terrific report called Underdeveloped: A National Study of Challenges Facing Nonprofit Fundraising. Although some might say "this doesn't apply to us, we have more capacity at our organization," I think the recommendations on page 11 are important for every nonprofit leader, donor, board member or volunteer to review and understand. In summary, the "signs that an organization is up to task" include:

  • Investment in technology and systems
  • True, meaningful engagement as ambassadors and solicitors (by staff, leadership and the board - not just one)
  • A solid, organization-wide understanding of fundraising and philanthropy (i.e. it's something they get and value)
  • Involvement on a strategic level by the director of development (a key leader and partner for the entire organization)

(Source: The Blackbaud Index; Data represented is based on a 3 month rolling average of YOY fundraising performance)

It's the combination of these four items that ensures the strength and viability of an organization's capacity to raise money. So as we stop for a moment to look at the overall trends, which is certainly an important thing to do, we also need to look up close at how our favorite nonprofits fare so that they are the ones who buck the trend as giving slowly recovers.