The fifth webinar in our Nonprofit Thought Leadership Series was hosted by Melissa S. Brown, from Melissa S. Brown & Associates, LLC., a consulting company providing data analysis, research, and writing for charities & businesses serving nonprofit organizations. In this webinar called “Can We See the Future by Reading the Past: Charitable Giving During and After Recessions”, we learned about how insights from the past, including tough times in the mid-1970s and from 2008 to 2009, will shape decisions we make now and into the future.
You can watch the recording here, and read some Q&A’s from the presentation below:
Q: In case we need to do some data mining for our own Boards, can you tell us the best resources to use to find this kind of data?
MB: The best source is your list of names and contact information you’ve collected. You can identify people who are closely aligned with your organization either because of their giving or their volunteer time. Ask for referrals for board members, potential new donors or new volunteers, and networks you can join to connect with more individuals.
For identifying potential new board members from outside your own network, consider using LinkedIn. The Board Doctor, a consultant based in Florida, has great success in finding leads for boards by searching by keyword and location.
Q: How do we get our board involved in making asks?
MB: Gradually, by having intermediate steps that help people become more comfortable with contacting donors.
For example. ask board members to make thank-you calls. Those are easy to do and very satisfying. Plus, research shows that calls to donors are strongly associated with having those donors renew their gifts.
After a board member has done thank you calls a few times, see if she or he will call or write to issue invitations to something. Again, an easy request to make.
The step right before having board members making requests for financial support is to have them on a call to attest to the importance of the organization’s mission when someone else is making the ask. Provide a min-script, “We began giving because ____ and now we give in order to ___”
The short book Fearless Fundraising for Nonprofit Boards has some great ideas, too.
Q: After individual giving, what are the next most important sources of giving we should focus on?
MB: Your priority after individuals will depend on your organization’s time horizon. Assuming you are relatively financially stable at this moment, ask donors age 50 and above who have given every year for at least five years to find a way to sustain their commitment to the organization in the future. This might be designating the charity to receive a portion of a life insurance benefit. It might mean leaving the charity a specific amount or a residual portion in a will. It could be more complex planned giving options. A community foundation is a good resource about those, if you don’t have capacity on staff or on your board already.
If your organization is one of the thousands that is facing a decline in revenue in 2020, continue to focus on individual giving and develop ways to reach the roughly 30% of the population that wants to engage through volunteering or special events first. Before they give. This takes time, resources, and planning. One approach is to identify needs that can be addressed by teams of people and invite employers in your region to create teams (5 to ?? individuals). Experience shows that people who work together who also volunteer together for a real community need are more likely to become donors to the host agency and also build team morale that helps back at the workplace.
Q: What do you think has been the most noticeable giving behavior change in the past few months?
MB: People give in a crisis when they want to see change but are not able to be right at the place where change needs to happen – handing out food, protesting, some health care organization. Since early June, there has also been a surge in giving to organizations working toward racial justice.
Q: What about unemployment? Isn’t that going to make a big difference this year in the way people give?
MB: Yes and no. This recession has huge job losses in retail, food and beverage, hospitality, and personal services like hair cuts and massages.
While not uniformly true, the people most likely to be out of work have income at or below the national median (around $64,000 for a household in the U.S.). In general, about 40 to 50 percent of households below the national median give to charity, and most often their largest gifts go to congregations. So, yes, congregations in particular and some secular charities will experience a drop in contributions from some of their loyal donors.
Higher-income households include people who can continue working from home or who are on alternate day or week schedules. In general, around 70 to 80 percent of higher-income – and 90 to 95 percent of the highest-income – households give to charity in a year.
With the stock market continuing (as of today) relatively high, some very high wealth individuals are making and fulfilling major commitments using assets. In the 2007-2009 recession, with the market down significantly, those gifts were off the table; this time, they have been continuing.
So, high rates of unemployment are bad for giving overall, reallocate continued giving by those who can afford it, and when assets remain at high values, might spur some additional giving for social needs from those with wealth.
We keep hearing about corporations that are stepping up during these times – can you elaborate on how this affects corporate giving?
Corporations tend to give from the prior year’s pre-tax profits. In earlier disasters, such as after 9/11, companies dug a bit deeper and gave a higher share of pre-tax profits, but not a hugely larger share. In 2001, corporate giving was 1.7% of corporate pre-tax profits, compared with 1.4% the prior year, as shown in Giving USA 2020. In 2005 and again 2007 through 2010, corporate giving held steady at 0.9% of corporate pre-tax profits.
This year, the impact on the total measured corporate giving will depend on what budgets the company uses for relief and support. I’ve seen cause-related giving based on what consumers choose, some in-kind (e.g., footware for frontline responders), some matching gifts, some contributions to international organizations not included in the U.S. tax system so “invisible” to giving in the U.S., and some direct service, also not recognized by the tax code as a gift.