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Special Episode: Coronavirus & Nonprofit Fundraising

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Paul Schervish: Coronavirus & Nonprofits
Coronavirus needs no introduction. We’re recording on Monday, March 23rd. Nonprofits are scrambling and struggling. The scrambling to adapt to workflow and personal upheavals will subside. The struggle will get worse: The need among those you help has increased and will become greater. Expenses of all sorts, from helping those in need, to disinfecting offices, to increased reliance on technology, are rising. At the same time, there’s financial pressure on your individual donors, in the face of firings, layoffs and work reductions. Your institutional funders are also pressured, whether private or public. Is it wise to spend? Can you count on your donors when this is over? Can you fundraise in the midst of the crisis? My guest is Paul Schervish, retired director of the Center on Wealth and Philanthropy at Boston College.




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[00:00:16.14] spk_3:
Hello and welcome to tony-martignetti non profit radio big non profit ideas for the other 95%.

[00:02:25.94] spk_0:
I’m your aptly named host. This is a special short episode of non profit radio Corona virus and non profit fundraising. Corona virus needs no introduction We’re recording on Monday, March 23rd on profits are scrambling and struggling, scrambling to adapt to workflow, and personal upheavals will subside. The struggle will get worse. The need among those you help has increased and will become greater expenses of all sorts from helping those in need to disinfecting offices to increased reliance on technology are rising. At the same time, there’s financial pressure on your donors in the face of firings, layoffs, work reductions as the individual donors is also financial pressure on your institutional funders. Is it wise for you to spend? Can you count on your donors when this is over, whether individual or institutional, can you fund raise in the midst of the crisis? My guest is Paul Schervish, retired director of the Center on Wealth and Philanthropy at Boston College, were sponsored by wegner-C.P.As. Guiding you beyond the numbers wegner-C.P.As dot com. My Cougar Mountain software Denali Fund is there Complete accounting solution made for nonprofits. Tony-dot-M.A.-slash-Pursuant Mountain for a free 60 day trial and by turned to communications, PR and content for nonprofits is their mission. Turn hyphen to DOT CEO. It’s a great pleasure to welcome back to the show. Paul Schervish. He’s professor emeritus at Boston College and retired director of their Center on Wealth and Philanthropy. He’s the author of seven books on Giving and wealth. He’s been studying philanthropy for over 35 years. He’s at Paul Schervish. Great pleasure to welcome you back, Paul. How are you,

[00:02:32.87] spk_6:
tony? It’s a pleasure to be back. I’m just doing fine. Laying low, being an elder statesman, or at least another.

[00:02:38.77] spk_2:
No, you’re You’re here to provide context. Historical context. Which eyes going to reassure all of us. So the elder statesman is appropriate on. Where are you? Ah, where you staying? In place.

[00:03:04.57] spk_6:
We’re in Chapel Hill, North Carolina, where we moved from Boston. Ah, for 1/2 year. We live in Boston the other half of the year where our two boys live. But down here, um, is where our first grandchild arrived. And so we spend half the year down here.

[00:03:12.10] spk_2:
All the reason to move only only half the year. I’m surprised your wife, your wife would like to stay longer. I’m wondering.

[00:03:15.98] spk_6:
No, not at all. Because they’re two boys live in Boston. Grandchildren there, too. So, uh, there we go.

[00:03:22.82] spk_3:
Okay. Well, I’m, uh I’m several hours east

[00:03:36.84] spk_2:
of you. I’m on the coast in Emerald Isle, North Carolina, also also in place. And the governor today just ah, closed. Um, what

[00:03:37.22] spk_3:
did you do

[00:03:40.54] spk_0:
today? Today was just Ah, we already had. Oh, that was a local. Yeah, the governor today. Locally, they

[00:03:59.24] spk_2:
had they had done some things. But the governor of North Carolina today, Governor Cooper just closed. Um, beauty salons, massage therapists, barbershops, movie theaters, Jim’s, um right Cooper, Governor. Right, Cooper. Um all right,

[00:04:09.48] spk_3:
So what, uh, what’s your star general know? What’s your what’s your sense

[00:04:10.18] spk_2:
of what non profits are facing and should look forward to?

[00:07:06.64] spk_6:
Well, I hate to quote Rumsfeld, but what we’re facing is those I’ve known unknowns that he talked about, remember? He said they were known unknowns, and there were unknown unknowns, remember? And this is a biological event of an unprecedented nature. Not in the extent that we haven’t had major plagues in history, and we can certainly trace back to the 2018. Clue 2019 flu. I’m in 1919 1918. Um, but this is unprecedented in that this is taking place in an age of dramatic globalization and interaction, coupled with the dramatic situation of biological and scientific progress and and potential insight. So right now, what we do know is that this spreads quickly. It has a death rate that we’re starting to learn may not be as great as we had once feared. But what we don’t know is its termination date and how it will exhaust itself. And so anything we’re going to talk about for charity’s contributing to their, um ah, receiving money from their sponsors or charities contributing to those that they support Our, uh, philanthropy is contributing. We don’t have a time frame for this, like we might have had for recessions and so on. And even for 2011 29 11 when we, um, actually had, uh, on increase of giving within a year. So, uh, sound like Zach and, uh, the great recession of 2007 2008 29. Um, we had about a five year decline and terrible giving. It went up in some of those years, but the trajectory of charitable giving was down for about five years. If you looked at it as going up from a year 2000 2 2007 and if that had continued to grow, um, we would have had 350 billion more dollars given to charity from 2008 to 2013. So we lost a year. Charitable giving if, um, the, um, trajectory from 27 had continued unabated. So that was a longer hiatus and terrible giving. We lost about it. Ah, whole year’s worth. Over those five years,

[00:07:13.64] spk_2:
the trajectory of charitable giving is always positive that the long term trajectory

[00:07:18.80] spk_6:
that’s correct,

[00:07:20.44] spk_2:
okay, that that in itself is grounding and and reassuring. We always it always does come back.

[00:07:37.31] spk_6:
And I also think it’s important to note that something that Patrick Rooney and I Patrick from the Center on Philanthropy in Indiana and I have talked about is that even giving us A is a low ball estimate. We think there’s a lot more giving then what we can measure Ah, in a meaningful and in a sober manner. And this giving, of course, does not include all the informal giving that accelerates at this time that people don’t realize she could be recorded his formal giving or that people are giving and shouldn’t be recorded as formal giving. And it isn’t so. There’s a lot of intra family help at times like this that actually does make up for quote unquote the decline and formal giving. Oh,

[00:08:24.54] spk_2:
interesting. Yeah. So you’re you’re yes. You’re bringing now family family support. It’s just private support. Me. Could be family. Could be friends.

[00:08:33.22] spk_6:
That’s right.

[00:08:33.89] spk_2:
That’s not recorded as a CZ. You and I talk about non profit fundraising.

[00:08:39.43] spk_6:
That’s right.

[00:08:40.30] spk_2:
Yeah. Yeah. All right,

[00:08:42.54] spk_3:
All right. So then, you know, the non profit community

[00:09:00.24] spk_2:
has greater expenses. Like I was saying in the intro, whether it’s technology or disinfecting offices or, you know, uh, you are, of course, greater need to, uh to the to those who were serving and

[00:09:13.35] spk_3:
that just that doesn’t apply only to, uh, institutions, organizations that serve individuals. But, you know, culture is important. Yeah, Theater’s air closed now, but cultural institutions need to keep themselves going, whether It’s a museum or a theater group. Okay, These these air both closed now, um, but they’re gonna come back. And so the theater group theatre company needs to have ah ah. Pipeline of directors and shows planned. Um, the museum needs to think about, you know, curating for the future on being opened again. Will they will open again. So I’m not only

[00:09:44.31] spk_2:
thinking of individuals and, you know, bring in arts groups and environment of course. Mean so

[00:09:53.94] spk_3:
the work has to continue. And, um, in some cases,

[00:10:05.77] spk_2:
there’s a special, special, greater need, but the upset cause is greater expenses, too. Like I said, possibly reliance on technology irrespective of what kind of mission. So

[00:10:11.24] spk_3:
in the face of these greater needs, whatever form they take, um, are we safe to be spending

[00:10:14.24] spk_2:
beyond what we anticipated? Beyond what we what we budgeted?

[00:14:11.09] spk_6:
Well, the answer that I told my students over all the years that is the first answer of wisdom is that it depends. It depends on what kind of organization we’re talking about. Depends on whether a hospital depends on whether we’re receiving as a nonprofit organization or as a public organization. State funds to keep going. Let’s think of it as what we’re hearing from the federal government. What we’re hearing from state governments. There’s two arenas. One is the, um the people, the employees. And there’s a certain amount of expenditure that charities are going to need to support their employees. They way they want to support people in the community. It’s hard to treat your employees more harshly. Then you want a treat. You’re, um uh, the people in the community, Uh, these are your family members, so to speak. And so Charity’s first of all have an obligation, too. And we’ll find, I think, happy response among thunders for keeping employees uh, engaged and hired. Now we’re gonna have to work out the way there is the government non profit partnership here because of people are quote laid off that has some of their salary played paid for by unemployment benefits. And so maybe there’s unemployment benefits that the state the government will provide, and then the non profit makes up for that difference. To keep people from quitting or joining another, uh, employment opportunity. You see how this can get complex In a second area is the institution itself the survival of the institution. And just as the government is providing money for businesses to continue to exist so that there’s places for employees after the troubles are over, um, the nonprofit sector has to keep going in a way that there’s a place for the employees to be working and their jobs to be contributing to the community when the crisis is over, if there is a need for layoffs and we can talk about what donors may think about, but let’s just take one place to start. Let’s start with organizations that have no endowment versus for those with the small endowment versus for those with a grand endowment and what they can do. I think most universities they’re not laying people off, especially those with it was a great endowment. Um, they have the tuition for the year, even if their tuition driven. They have there the most of their revenue already in the coffers. They’re going to continue to grant credits, and they’re going to be able to keep their income stream alive at least until the beginning of the next semester. So that’s just one example. Often organization that may not need a dramatic infusion of charitable dollars at this point, and that takes us to the donor. The donor is goingto have to be picking and choosing maybe one that has contributed ah, large amount over years to uneducated l Institution might for the next six months shift that giving away from an organization that doesn’t need the money it much immediately to an organization that is proceed to be much more in need immediately

[00:14:15.78] spk_3:
now. So, historically, have we seen a shift like that? Have we measured that?

[00:14:56.45] spk_6:
Yes, wenn er the great recession took place 2008 2009 We found, as I said, a decrease in charitable giving overall. But giving too social service is was sustained much better. And after after 9 11 1 of the reasons why charitable giving didn’t go down. It was before we had this kind of crisis Fatigue, charity, fatigue.

[00:14:59.44] spk_7:
Um uh,

[00:15:27.84] spk_6:
9 11 produced a lot of charitable giving, and if it did it for the people that were, uh, immediate loss for their, um, family life and way of making a living, and it did it for communities and for businesses that were caught in that trap. And so the money shifted in 20 in the great recession. And it also shifted for crisis relief in on 9 11

[00:15:47.24] spk_2:
Okay, Yeah. 9 11 is a bit of a different case, because the funders, whether institutional or individual, we’re not enormously impacted the way we are are all now impacted.

[00:16:02.64] spk_6:
One time shock. Yes, rather than an indefinite period of time that effects that the wealth of the donors, um, directly run in. And you’re very correct about that.

[00:16:07.33] spk_2:
Yeah. Um, so that I don’t want to discount 9 11 lessons. I’m not. No,

[00:16:12.26] spk_6:
no, no, you’re not. You’re not, But it’s a very good point

[00:16:23.24] spk_2:
context. The great recession seems Maur. Ah, more of an apt analogy. Um, for that reason, if

[00:17:18.68] spk_6:
you ever want to know what’s going to happen, the philanthropy look at the income and wealth. Gross or declines that fire outstrips any tax effects that are written about all the time in the nonprofit sector. Worries about all the time. Um, we had a natural experiment after the great recession. Um, there was no change in the tax laws that took place for those five or six years. No, except the tiny bit in the marginal tax rate for capital gains. But that was not that important. Okay, so without any tax change, we saw a dramatic decrease and terrible giving due to the decrease in wealth and an income. And the income effect and the wealth effect far outstrip any of these tax effects that the charity’s air always be moaning. Whenever they hear that there might be a decrease in taxes. They feel that the discount rate for donors is going down, and they’re going to give less. Well, in the past, that may have been the case. But today, wealth is growing normally so greatly that far outstrips any effect that the tax rates have.

[00:17:45.94] spk_2:
All right, now, people don’t feel so wealthy right now.

[00:17:49.09] spk_6:
That’s right. And that’s why that’s very important.

[00:17:51.42] spk_2:
They don’t write and they don’t know for how long. They’re not gonna feel so wealthy.

[00:17:58.24] spk_6:
Are these so wealthy? Yeah,

[00:17:58.95] spk_2:
I was. Yeah,

[00:18:03.40] spk_6:
I was returning. Dollars have been lost in the stock market, right over 1/3

[00:18:04.35] spk_2:
of value in the

[00:18:05.30] spk_6:
market has been lost.

[00:18:37.04] spk_2:
Yeah, you’re right. I’m I’m thinking of the perception you’re grounding in the reality, but e I mean, they’re both The reality creates the perception, your question of how long after the reality subs theat reality improves, Does the perception linger? But right now we’re in the midst of the reality, the reality of the perception of equal. Now we’ve lost a lot of wealth. Couple trillion dollars. Um, people are concerned about their jobs. Whether the jobs will continue or or just be reduced. Working hours be reduced. So incomes reduced so over people are not feeling wealthy.

[00:19:29.04] spk_6:
Well, I’m gonna command Is that that for that insight about the sensibility of it did not in addition to the objective reality, because our own research has shown that over a period of time, very wealthy, um have an objective view of their financial security, but also a subject of one. And the lower the subjective you, no matter what their objective circumstances, the less they give to charity. And it is also true for people who are not wealthy, for whom income studies have been done. And when people feel that their incomes were going to rise over the next few years, um, they will give more to charity than those who feel that they’re not going to be rising. So it is even without the objective circumstance. Your note about the sensitivity is very important. And that does linger just as you suggested.

[00:19:51.74] spk_2:
I’m talked to a lot of experts. I’m trainable. I’ve heard this a few times, so I Hi, I’m trainable. Um

[00:19:54.36] spk_3:
all right. So what does that mean

[00:19:59.74] spk_2:
for fundraising? Look, I don’t mean this week or this month, even still March,

[00:20:08.64] spk_3:
but what does it mean for fundraising? Thio help counter

[00:20:13.31] spk_2:
some of these increased expenses in Let’s say, you know, April, May June, do we

[00:20:17.05] spk_3:
have to just wait and see? Ah, how people feel or or can we go out and test our our constituents for for fundraising messages?

[00:24:48.84] spk_6:
I think that what we have to do is have a fundraising message that’s functional. Are we disappearing? And are my workers disappearing? Or are we going to be able to survive? Now there’s two sides of this when we talk about a arts organization, a museum or theater, they have funding from fundraise from by fundraising, but they also have revenue from attendance. And so those that are losing revenue by attendance from lack of attendance are going to be suffering more than those that are just able to keep their revenue alive. Um, for instance, hospitals will be able to keep their revenue alive over this period of time. While arts groups may not be able to, universities may be able to keep the revenue stream alive Attn least until the fall, until we find out more of what’s happening. While some social service organizations may not be able to a large community foundations with endowments, um, we’ll be able to do better than those without endowments. Um uh, organizations that have AH connection to people with donor advised funds will do better because donor advised funds are are terrible savings accounts that people will be able to contribute from even if they can’t add to them at this point. So there’s all these dimensions. But what I would advise charities to do is to be very honest about two things. Their employees and there beneficiaries are their beneficiaries being taken care of without them at this point, and they can cut back on those service is or are those service is remaining the same? Are they increasing their employees? Are their employees going to be able to because of the revenue stream, mainly continue to be employed. Supermarkets, food banks, perhaps, and so on because they’re being supported by the community, Um, or by government, um, places where school systems air, providing our continue to provide the breakfast and lunch programs. They’re different from communities that are dropping those programs and need private funding for them. You follow all of this and I hope our listeners are So what I would do if I were a donor, as I would look to a charity and how honest it is to be about its two major instrumental needs. Its beneficiaries And those programs on the one hand and the second instrumental need its employees, and I would see what needs to be done about that. And you know what’s happening out there? Is that some donors air actually contacting charities and saying, What do you need? I know one family that contributes to an inner city school in Detroit, and we were talking with them, and what they did is they found out that that inner city grade school is using the chromebooks that that family has contributed two grades five through eight, and they asked, Do you need more chromebooks for your youngsters? that the parents can use with the kids. The answer came back. Not yet, but we may. But that was something that the donor asked about a specific thing that was specifically needed for continuing education for the lowers, the lowest grades in school, the way they’re continuing education for the middle school. And uh huh. So those things are happening.

[00:24:57.01] spk_2:
Yeah. So that’s right. That’s the individual that the donor reaching out to the charity. Maybe. Can we say, you know, I don’t know. Six. Well,

[00:25:02.35] spk_3:
there’s value in keeping in touch

[00:25:03.96] spk_2:
with your your major donors. You’re

[00:25:21.78] spk_3:
even if this is not the time to be asking them to give, but explaining what the needs are. You know, like that that example. You know, we don’t need Chromebooks now, but maybe in the future, you know, we’re stable now, but six weeks from now, we the needs, maybe X y z

[00:25:26.64] spk_6:
So, yes, that’s really

[00:25:28.31] spk_3:
being not asking, but communicating the needs, sort of like you would do with a friend or a family member, you know? No, I’m okay right now, but six weeks from now, I might need some help,

[00:26:06.14] spk_6:
you know, be in touch. Done kind of messages. Yeah, we call you. Yes, and I think that’s a great week. See, sometimes donors feel, um, neglected by not being asked. Isn’t that a strange thing? You know, you know, that’s one of the major things I call the new physics of philanthropy that instead of donors having to be approached and squeezed, donors are looking for a good opportunity to give. And especially if you’re already giving to an organization. You know, they value you and approach you just mentioned is a very good one to pursue.

[00:26:20.04] spk_2:
Same same as the board members who we find unsatisfied because they’re not sufficiently asked to contribute their their time and time and talent to the accusation that not asked to do enough. It’s the It’s a paradox that I’m asked. I’m not asked to do enough, so I’m losing interest in being a board member on the charity side. They’re afraid to ask the board members to doom or because they feel they’re over taxing them. Same. But

[00:26:50.19] spk_6:
I ran into a paradox one of the Kennedys at an event, and, uh, we’re

[00:26:52.04] spk_2:
dropping names now. Look, a dropping names, Kennedy family.

[00:27:25.44] spk_6:
Oh, no, no. There are in the Boston area, and it was one of the one of the younger kids and and we were he said, What do you do? And I’m going on He said, You know, one of things that happened the other day, I was really anxious to give to such and such, and they never asked me, and I was really kind of upset about that. You know, it’s just what we’re saying, and it’s a strange thing you may think, but you want to be valued for what you can do. And if you could do something, you want to be asked about it,

[00:27:28.74] spk_2:
right? And if now is not the time to be asking, now is a good time to be

[00:27:33.76] spk_3:
communicating about what’s happening at the organization, you know, telling your stories

[00:27:57.84] spk_2:
about employee dislocation. Um, parent employees who are now have kids at home that used to be in school, um, and telling the needs of the stories of your beneficiaries the stories of your building that you can’t access, but you’re still to pay rent on, um, you know,

[00:28:13.64] spk_3:
telling these stories the needs are just gonna be be evident and you’re not asking now, but you’re sort of laying the groundwork for asking when it’s, you know, six weeks of past or so 4 to 6 weeks of past. You’re starting to lay the groundwork. Not conniving Lee, but just being honest with laying, laying out the stories of what’s happening now, so that when the need is there, um, it’s not a surprise to your funders.

[00:30:07.20] spk_6:
Well, take you picking up on exactly what you’re saying. If I were to make one recommendation to charities and I have received from charities and from newsletters and from financial advisors, I’m on all these lists because I like to read and I’m reluctant to miss anything. And and most of them are telling us about the covert virus and what’s gonna happen and wash your hands and and we don’t know exactly what’s gonna happen. But you know, it’s time for the charities to start sending letters to their donors about themselves and their beneficiaries, where we may not be in need right now, but here’s what’s happening to us. I would be interested to learn from some charities what’s happening to us. Um, if Boston College were to send out a, um ah, a letter saying financially, we do an annual report, and, uh, but this is what’s happening at Boston College these days could be partly financial. It could be party, uh, in Roman issues. It could be partly added expenses, and it may not be a request for donations at this time. But to hear about what’s happening to the groups and the beneficiaries for whom you care is, I think, a new kind of communication that can be part of this Corona virus communications network and content

[00:30:26.09] spk_2:
and then in the in the medium to long term. Um, and we don’t know what that term is. Um, the history shows us that giving will recover.

[00:31:15.48] spk_6:
That is correct. Let’s think of churches right now. Um, it is kind of a paradigm they’re not holding. Service is, um, now a lot of churches get their revenue by the collection basket each Sunday. Others get the major portion of theirs Bye pledges in November, December, and so on. Those that get their revenue by pledges and have regular communication and maybe are doing service is on the Web, or so one are gonna be more in connection with their donors and those that are supporting it. But church is an interesting thing. See churches, an organization that the donor uses, the donor and the recipient to a church

[00:31:17.83] spk_9:
is the same person, the same

[00:31:43.58] spk_6:
family. Yeah, and so there’s a close identification there. But there’s also the fact that if you’re not using the service is at the present time, does that distance you more then from the organizations whom you contribute to but you don’t use? The service is from so we’re gonna have to see right or will people say their church can continue? I don’t mind it if we have to cut back a little bit as long as our pastor is paid or our pastors air paid.

[00:31:55.27] spk_7:
Um mmm. But

[00:33:37.24] spk_6:
maybe other things are a priority, But we’ll see. And this is the uncertainty that’s plaguing the stock market. It’s played in charity. It’s plaguing donors. It’s plaguing charities. It’s plaguing foundations. Everywhere you look, it’s playing in the medical world, this uncertainty and it would just be maybe a miracle. Maybe a great lesson, maybe just the way things play out. Or maybe all of those that if this were to have a shorter six week duration in the United States or across the world. Um, it’s section of the world having a six week duration of this in which it peaks and then true tales. Or there’s some biological discovery or scientific breakthrough. Um, this could change this whole crisis. And I think behind everybody’s anxiousness is also this maybe even on reasonable hope. That is also at play. And so there is some of this. We’re in crisis now, but maybe there won’t be a crisis in two months or six weeks. I will begin to see this curtail. Um, the stock market does not seem to be saying this is short life or this is turning the corner.

[00:33:51.34] spk_2:
Yeah, they didn’t seem to be. There’s not commentary suggesting that, but that’s that is reasonable. I know you’re you’re capturing it. You’re calling an unreasonable, unreasonable hope. It’s all the All the medical commentary is that we haven’t seen the worst. It’s gonna get much worse before it gets any better.

[00:34:47.99] spk_6:
Yeah, and, ah, But if there is a biological breakthrough with some of the medications that they talk about low key at the present time, even today again, they say there’s close to more than 1/2 a dozen that they’re starting to experiment with and mixtures and so on. There just might be something there, but we’re not. We’re not a piece. By finding out the young people are perhaps more vulnerable than we thought. Our at least. Ah, the carriers more more being carriers and them congregating and not stopping to congregate could be a factor. That’s just gonna leave this to continue longer. We don’t know people after 14 days are still contagious the way they were previously. All these things you’re gonna make all the difference in the world. But I’m not a medal.

[00:35:48.74] spk_2:
Right? So bring it, bring it back to nonprofits, you know? Yeah, there’s enormous uncertainty. Um, but we don’t want you to lose your head heads. And it’s not what individual one collective head. We don’t want you to lose your heads. We don’t want you to lose your humanity. Um, share the share. What’s happening with your funders, including institutional. Um, and, um, and, you know, be grounded in the confidence that your major donors will be there for you when they can, and that giving overall will recover in the in the mid to long term And I understand. You know, we don’t know what that what those terms are, but it will. So, you know, I think you go about your work in Ah, you know, in a in a thoughtful, uh, in a thoughtful way. Even even with, uh, you know, even with uncertainty

[00:36:36.53] spk_6:
now, there’s, uh, four areas that, while hindered and lessened by the drops in the stock market, remain good potential. Um, sources of giving. Let’s start with donor advised funds. Most people in their donor advised funds have, ah, their investments invested in various kinds of stock funds, mutual funds. But that doesn’t mean that they’ve been emptied out and you can give from them a second source that charities ought to be asking and reminding people about is the required minimum distributions

[00:36:48.47] spk_2:
All right, the IRA?

[00:37:31.36] spk_6:
Yeah, that’s right. And that money has to be taken out this year. No matter what’s happening in the stock market, you’ve got to take out what they designated from last January 1st right is the amount. And if you are above a certain amount of wealth, that $100,000 that you can contribute that limit from your r. M. D is not much to you and can really be activated for large numbers of people that are pretty wealthy or higher, affluent. And the charities can educate about that. They can also put on their websites a buttons that are now being developed to contribute from RMDS and to contribute from donor advised funds

[00:37:41.81] spk_2:
before we go 23 and four. Where can you name any place where you’re seeing these

[00:37:52.43] spk_6:
buttons? I can’t. All I know is that I’ve seen in the past, um, discussions about them and advertisements for them. I don’t think it would be hard for any charity to say. Um how do I,

[00:38:03.58] spk_7:
um uh,

[00:38:05.52] spk_6:
website button for a donor advice fund for gifts from donor advice when they’re gonna be advertising to make sure you know about it so they won’t be hard to find.

[00:38:15.72] spk_2:
Okay. Okay. What’s what’s number three?

[00:38:41.72] spk_6:
Number number three would be foundations that despite a decrease in their assets right now, I still have large pools of money. They can, since they can average over a period of years, their quote 5% requirement of donation they can, without worrying about keeping us up forever, contribute 7% this year and give less next year. If the crisis doesn’t continue, Our that becomes a possibility because of the ability to average out over three years. That 5% column me on that. Okay.

[00:39:24.22] spk_2:
Again? Yes. So keep in touch with your institutional funders again. This may not be that this is not the week or maybe even the month or the couple of several weeks to be asking, but keep in touch. You know, institutions are made of people. Institutional funders are made up of people, project officers, program officers. Um, let them hear from you. Okay, what’s your number? Four?

[00:40:12.21] spk_6:
Number four is something that is really connected in a way to all the others. Um, and that’s your endowment spending from your endowment. What else is it for? I mean, it can be, ah, security blanket, but it’s time for people. Two makes some may be emotional sacrifice not just a financial one, but an emotional one that says that I don’t have to keep accumulating in my endowment. I can spend some of it for a crisis, and that’s what it’s for. In part, it’s not just to provide long term security, but don’t forget without spending from your endowment. Your long term security maybe undercut by this short term crisis.

[00:40:41.41] spk_2:
That’s a very good point. Yeah, because I’m of course, that requires board action and thoughtful planning, but yeah, that’s a very good point. You’re You may undercut your long term by being, ah, to, um, too cautious in the immediate term.

[00:40:45.01] spk_6:
That’s right. We may

[00:40:55.01] spk_2:
not be the may not be a middle long term for you if you’re not cautious in the short term. And if you have the endowment wherewithal Ah, that maybe that’s that’s worth looking at through.

[00:41:06.31] spk_6:
And And, of course, you know that’s not a bad message to your donors that you’re willing to put quote your money on the line as well. Yeah,

[00:41:10.31] spk_2:
we’re not just asking for you, right, But we’re we’re dipping into our own long term savings

[00:41:13.12] spk_6:
yet instead of grown on, have made us a good institution. And we’re going to come out of this a great institution, you know,

[00:41:58.05] spk_2:
and, ah, A footnote for organizations that don’t have an endowment when we’re through this, uh, endowment growth or endowment creation is something for you to go to make a priority again. When we’re through this planned giving can be very good at that. However, you’re gonna do it if you don’t have that endowment. That forthe problem that you just mentioned. Paul, Um, it’s it’s something to make a priority for the next the next crisis.

[00:41:59.27] spk_6:
And you will say that’s why we’re raising, you know, And then people will understand it at this point,

[00:42:05.84] spk_2:
especially after this, right? All right, again, a footnote. I footnoted. I think that’s where it belongs. Uh, footnote not an end note. I prefer footnotes. Then I want to flip to the back of the book all the time. I don’t know. I have more footnotes over in there.

[00:44:10.99] spk_6:
One more footnote would be something you hinted at earlier. So we’ll move in from the back of the book to the page. And that is, um, treating your donors in the way that you want to treat your beneficiaries. Um, I always say this to universities. When I give talks, you have the students in front of you yet Boston College and Holy Cross at Harvard wherever and Emerson College. I just think a few of University of Detroit where I will and you want to treat this student, not only to information you want to treat them to personal formation. And when they graduate, you sometimes forget that you still want to be part of their personal happiness in formation, and all you want is their money. And so this is a time to remember what you ought to be doing all the time. And you were suggesting being in contact with your donors, you’re being in contact with your donors and maybe asking him how you do it. You’re part of us. I’m not just asking you this because you’ve given us money and we hope that you will continue to honor us with your gifts in the future. We’re sincerely interested in you, and we know that those that donate tow us are as anxious and worried about their families as we are about our own. And we are about the people we serve. How about a letter like that that is sincere to the very bottom of your heart? Because these are your constituents to your donors are part of your constituents.

[00:44:46.49] spk_2:
I love it, Paul. I’m thinking about a video on that exact subject around planned giving, which is what I do. Plan to giving consulting and, uh, using this as a time to do send exactly those kinds of messages with people you’re close enough to It could be a phone call. It could be a short hand written note. Um, you know, it doesn’t have to be. Ah, Doesn’t have to be an elaborate letter. Then that’d be a long letter. It never takes length. Month never trumps sincerity. And, uh, and genuine genuineness.

[00:44:52.59] spk_6:
Your donorsnames. Right? I get letters. That’s a deer. A p

[00:44:54.69] spk_2:
Okay. Yeah, Well, that’s that’s your database. Yeah, Yeah, yeah, that’s all. Another subject.

[00:44:59.85] spk_6:
But no, don’t screw that up when you’re writing a good letter.

[00:45:06.69] spk_2:
Yeah, that’s true. You’re right. Um, yes. Keeping in touch and heartfelt ways we’re thinking about you. We hope you’re well and safe. We we wish the same for your family. We just want you to know you’re important to

[00:45:16.75] spk_6:
us. Yeah, really are about

[00:45:19.62] spk_2:
sincerely. You know, that’s it. And that comes from Ah, gift officer doesn’t have to be a CEO board member letter and president.

[00:45:27.47] spk_6:
Consign it. I mean, maybe maybe the dean signs. Um no clothes in a picture of the dean right there. So you know, you make it personal and you don’t act it. I mean, in this day and age is easy. Send an email I’m and write it well, and you know,

[00:45:44.19] spk_3:
well, it can also it also come

[00:46:08.38] spk_2:
from a gift officer. That’s right. If you know if there’s a relationship that’s right. Relationship there. That’s right. Gift officers. Good. All right, Paul, we’re gonna wrap it up. Um, so any any parting thought? I mean, we had lots of good advice, sir. I’m not We’re not looking, toe, uh, take off all the advice that you provided. But what

[00:46:08.51] spk_3:
do you want? Do you

[00:46:09.09] spk_0:
want to

[00:46:09.28] spk_2:
leave people with Final

[00:46:57.49] spk_6:
Five? Don’t do too much mission drift. Um, uh, if you were doing arts funding, um, you might want to stick with that at this time. You know, um, both as a donor and as a foundation. Um uh, mission drift can take place at this time because there’s always, well, politically correct or exigencies that seem to be so important. You can’t who ate them, And I will just say, um uh, take care of your workers and avoid mission drift. So take care of your donors. Take care of your beneficiaries. Take care of yourselves. You know,

[00:47:03.62] spk_2:
and your employees as well.

[00:47:04.93] spk_6:
Yeah, that’s what I meant. Yeah, that’s real

[00:47:14.58] spk_2:
Pool service. Sh Professor emeritus at Boston College. Retired director there. Center on wealth and Philanthropy. You’ll find him at Paul Schervish s C h E R v I s H Paul. Thank you very much for sharing elder statesman. Thank you very much.

[00:47:23.70] spk_6:
My pleasure. Good job.

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Hello and welcome to tony martignetti non-profit radio big non-profit ideas for the other ninety five percent it’s inauguration day today we have a listener of the week i know which is more important for non-profit radio listener of the week is more important. Karen graham she e mailed me your whole hair thing is cracking me up. Thank you for bringing that joy into my day. Well, karen, thank you for taking such an interest in my exceedingly long hair. Longest it’s ever been in my life. I’m glad it brings you joy and i would ask you to speak to my mother about this, please, because she is routinely reminding me that her salon also cuts men’s hair on dh she’s threatening scissors while i’m sleeping, so i’ll give you her contact info. Ah, now karen is executive director of idealware, which i admire very much idealware dot or ge, i did a video praising them a few weeks ago, which you’ll find at tony martignetti dot com i don’t think you’ll find the video at idealware dot orc, which i’m most disappointed about franklin att leased a link you could’ve shared the link, i thought, but idealware is a very good organization dahna karen graham, executive director congratulations on being our listener of the week. I’m glad you’re with me. I’d be stricken with keto acid urea if you rained down on me with the idea that you missed today’s show twenty sixteen giving report and the twenty seventeen forecast no need to wait until june. Atlas of giving ceo rob mitchell releases the atlases analysis of last year’s giving and their initial forecast for twenty seventeen also have insightful commentary from professor of paul schervish for boston college and doug white on tony’s. Take two videos from the non-profit technology conference we’re sponsored by pursuant full service fund-raising data driven and technology enabled, you’ll raise more money pursuant dot com, and by we be spelling supercool spelling bee fundraisers. Wee bey e spelling dot com i’m very glad to welcome rob mitchell back he’s uh, but on the show three, four times or so he’s, the ceo of atlas, of giving, you’ll find that at atlas of giving dot com he’s at philanthropy man or, as i like to say at philantech roman, which he probably gets tired of hearing me say, but it’s my show. I do whatever the hell i want. Is that philanthropy? Hman? That’s the end of it. Welcome back, rob mitchell. Thanks, tony it’s. Always great to be with you. It’s. A pleasure to have you. Thanks for coming up from texas. Thank you very much. So you’re you’re here to well, you’re here to release the the review of twenty sixteen and the forecast for twenty seventeen remind us, please. What is going on it atlas of giving. What is this all about? Atlas of giving at the atlas of giving what we do is we measure and forecast charitable giving by sector by source and by state, including washington d c and we release our information monthly it’s. Our forecast is updated each month. Our calculation of giving is updated by sector source and state each month. And our methodology is based on sixty five algorithms. What we did was we we had a team of twenty five phd level statisticians and analyst revue factors that we thought affected giving and two that they they added fifty percent mohr and they actually determined and what fact? What economic? Demographic and event factors are involved in charitable giving. And what their relative weights were for each category. For instance, the algorithm for corporate giving is very, very different from the algorithm for ah ah, church giving let’s say, so this this there are some commonalities, but they’re also. And when i say when i say correlation, this is based on what’s called correlation science a correlation, even a strong one does not necessarily indicate that that there is a relationship, and one example i’ll give you is that in our in our corporate giving algorithm, one of the key factors is auto parts sales. Now we don’t for a minute believe that auto parts sales have anything to do with charitable giving, but there is a strong there is a strong relation that variable correlates with that form of giving exactly for reasons that we could speculate. But in numerical regression analysis, those factors air correlated those two variables exactly correlated and just just so you know, this is the same kind of technology that the fed uses hedge funds use. I trust you, you’re a bona fide and and interestingly enough, the the auto parts sales is also part of one of the feds algorithms we found out so and one of the things we found recently because we’re continually trying to improve our algorithms and learned from them is that large equipment manufacturing index has a strong correlation with national giving. Okay, all right. We’re not gonna go too much into the mechanics of the details of it. Okay, but that’s, interesting large equipment manufacturing. And what was i just i’m sorry. What part in order parts sales, uh, related to fund-raising who knew, right? We do. We do now. Okay. You have a headline for us. Let’s. First talk about what, twenty sixteen looked like for fund-raising. What happened? Well, in twenty sixteen, we had a record year for dollars given, and the dollars given was just shy of half a trillion dollars. It was four hundred ninety seven point four billion dollars given nationally doll causes. How does that relate to twenty fifteen? That is a four point one percent increase. Okay, over twenty fifteen. And what was twenty fifth? Twenty fourteen to twenty. Fifteen. Remember that? What was that increase? It was it was a double digit increases. Wass it? Wass okay. We’re coming on the tail end of the recession, i guess. Well, a lot of that had to do with what was happening in the stock market. And we’ll talk more about that. Ok, as we go on, okay, maura that alright. So four point, one percent increase from fifteen to sixteen were just under half a billion, half a trillion dollars in giving for one other important point to make is that. For for most people who are affiliated with non-profits or the non-profit industry, they have assumed, based on other information, that charitable giving has been pegged at two percent of real gdp for as long as we can remember. Yes, you have an announcement for this. Go ahead, we have we have charitable giving at almost three percent of real gdp, so two point nine, seven percent of real gdp and that is huge because the country has been talking about the stalled percentage of two percent of gdp for a long time. I mean, it certainly the six years that i’ve been doing this and probably longer than that. So now you’re putting at just under three percent of gdp, which is enormous, fifty percent increase your saying yes, all right, all right. And there’s a reason why, okay, we’re gonna hold that reason, okay? Till after this break, you’re gonna hold that and we’ll go away for a moment. But of course we’ll be back. We’re talking about the twenty sixteen review the twenty seventeen forecast to professors joining us, paul service and doug white. Stay with us. You’re tuned to non-profit radio tony martignetti also hosts a podcast for the chronicle of philanthropy fund-raising fundamentals is a quick ten minute burst of fund-raising insights, published once a month. Tony’s guests are expert in crowdfunding, mobile giving event fund-raising direct mail and donor cultivation. Really, all the fund-raising issues that make you wonder, am i doing this right? Is there a better way there is? Find the fund-raising fundamentals archive it. Tony martignetti dot com that’s marketmesuite n e t t i remember there’s, a g before the end, thousands of listeners have subscribed on itunes. You can also learn maura, the chronicle website, philanthropy dot com fund-raising fundamentals, the better way. Durney welcome back to big non-profit ideas for the other ninety five percent want tease i want to do a little live list, their love just a just a touch of the live listeners college station, texas, raleigh, north carolina and multiple right here in new york, new york, of course we’ve got our listeners abroad will get to those but still it’s a little taste of live listen love for now. All right, almost three percent let’s call a three percent two point nine seven what’s three one hundred’s between friends and colleagues let’s call it three percent of gdp. Why do you believe we’ve had this fifty percent increase? Well, there are a number of reasons they’ve been growing. One is the number of non-profits continues to grow and so now we way have but that’s always been the case and we always assumed to it seemed to be a zero sum game more non-profits entered, i don’t know, fifty thousand a year, so maybe one of the professors has a better number than that. But many, many new every year, and it’s still always stuck at two percent. Well, yes, but now we have technology and so there’s so many more different ways for people to give there’s so many there’s, so many more ways for people who are raising the money to get good information and good targeting about how they’re going to solicit money so fund-raising has become much more efficient, okay? And the only moral if, if that’s if it’s related to technologies, probably more adopting technology that we’ve had for a while, except for maybe you do things like text text to give is that is that that the person that would be one of one that i one that i love is crowdfunding kind of technology where you’re using social media to raise money for a cause? And so that didn’t exist. The other thing that well, i mean, it didn’t just come into existence in twenty sixteen. No, we’ve had crowdfunding no, no, no, no, no. Several years, no and but we didn’t just jump from two percent to three percent and one year either. Okay? It’s been creeping out. So what was the percentage last year? The percentage of gdp? The percentage last year. Wass i don’t remember. Okay, but it was something less than two point nine seven it wass okay, okay. Um all right, so we’re we’re at three percent now. That’s that’s, that’s a big deal. It is a big deal. This has been stale or stagnant. Stay lt’s. Wrong word stagnant for a long time. Okay, um, let’s talk about some of the different sectors that have benefited from this this increase since since last year there four point, one percent increase. I always i’m always crease about religion because religion is you and i have talked over the past couple years has always been a shrinking proportion. It’s been the largest of all the sectors but it’s been a shrinking proportion. Yes, ten years ago, gifts to churches and congregations accounted for fifty percent of all giving in the urals. Now, it’s, what thirty would you have? A thirty one. Thirty two percent metoo and did it lose lose a percent from last year? We’re projecting that it’s going to lose a percent from this year to next year. Okay, so it stayed steady because last year it had lost a percentage. Yes, it from fifteen to sixteen and lost a percent. And i’m pretty sure from fourteen to fifteen lost two percent, so i’ve never talking about that with you. Because now it’s steady. But you’re projecting a loss for next year. Yes. Okay. But it used to be fifty. Used to be fifty now. Thirty two. Okay. And the reason why is that the united states is becoming more like western europe. It’s becoming more secularized. Fewer and fewer people are joining congregations supporting congregations. But what’s interesting is that you mentioned zero sum game? E-giving is still growing so that the gifts air going. Other places. They’re just not going to religion. Yeah, clearly right. And really one of the one of the fastest growing sector of the fastest growing sector over the last three years has been the environmental sector and it is the smallest sector. It only accounts for two percent of all giving. But at the rate it’s growing it’s, it’s, it’s astounding. And then human needs organizations have also done quite well and education. The education sector has grown. Those air the three fastest growing sectors and have been for the last three. Well, really, since the end of the recession? Um, education is explained by the way that they raise money because one of the things we found at the alice of giving is that it’s not so much about the quote economy, its factors in the economy, it’s factors of demographic that’s because about your algorithms, you’re your algorithms have found the variables, the aii factors that that car late with e-giving so are two professors air well well acquainted with the fact that most universities go from campaign to campaign and lots of campaign contributions come out of come out of aa gains in the stock market or gains in real estate. And so when the stock market does well, education does well about the environment. What what’s what’s happening there? I think that the biggest factor in the environment is awareness you can’t not. You cannot turn on any of your i once heard a guy say a few years ago that the time has come when you can pick your version of the truth through the news. Yeah, and so but truthfully, no matter what your source of news is, you can’t escape the fact that we’re always talking about the environment now, climate change, we’re talking about climate change. We’re talking about the instruments to defer climate change things like solar panel and wind power and other alternative energy sources i mean, elon musk is making ah is making billions of dollars capturing energy and batteries and using that do you see in your twenty seventeen forecast on increase in market share for the environment from larger than two percent? No, you don’t say no. You see it’s continuing to grow, it is narrowing and it’s growing faster than to grow, but not more than than its current share. Two percent not more. That’s correct. Okay. We could be wrong, though, because remember this is this forecast that we’ll talk about today. It’s just the first of eleven for forecast will do throughout the year. So we update we we update our forecast every month. And the example that i love to give is two thousand won two thousand one was bumping along to be a great e-giving your ah relatively good giving here. And then september eleventh happened. And if you were a non disaster charity what we know today having backfilled information now for fifty years is that giving dried up? If you’re a non disaster charity, pretty much for six months and then came roaring back let’s stop talking around. The forecast and let’s talk about the forecast for twenty seventeen. What do you see happening? We’re looking for growth of four point four percent nationally. Four point four versus four point one for this year. So a little bit more growth. Yes. And and what? What dollar amount? Does that come to the dollar amount over half a trillion. Right. It’s going to be over half a trillion? Yes. Okay, okay. Ah, looks like five hundred nineteen five in nineteen billion. Five hundred nineteen. Okay. Now again, we’re with the caveat. I understand this is your first forecast of eleven of eleven more to come for twenty seventeen each month. You update the annual forecasts. That is that right? We do well, so it’s a rolling twelve month forecast. So our forecast contains a forecast for next month for the next three months for the next six months for the next twelve months. And then we also update the calendar year forecast every month. Okay. What do you ah, what else do you foresee for twenty? Seventeen around around let’s. Talk about the let’s. Talk about the sources because you mentioned some of the sectors that you see sector. Growth in twenty seventeen about from sources, foundations, corporate bequest, individuals, et cetera. What do you have there for? Twenty seventeen? Well, the biggest change i see is in corporate giving and co e-giving as as many people know, is is not a large percentage of source giving in the united states, only five percent. We’re gonna talk about that when we bring the professors in, i might like to i’d like to chat a little bit about why that is to me that small maybe i’m wrong, but alright, so martignetti e-giving corporate giving this year this year just past twenty sixteen was double digit growth ten point three percent. What we’re projecting for next year for corporate giving is only one point, eight percent. All right? Uh still grow. I’m looking at that and i understand that’s growth. I’m talking about the share. The proportional share of total giving for corporations is only five percent. All right? I’ll tell you what, let’s, let’s bring in our professors because we’ve talked about the headlines let’s. Bring in doug white he’s, former professor and director of columbia university’s, master of science in fund-raising management, his most recent book is abusing donors intent, which we discussed here. I was going to tease him about that having been three years ago. And what’s happened since. But now i find out that he’s writing another book for later this year. Doug white, welcome back. Well, thank you for having me back. It’s. Good to see you again. Even with your long hair, can’t avoid it. Just call him sampson. You and karen clams. And i thought it was einstein. I prefer fabio. If you’re gonna if you’re gonna make any references. Let’s, make it fabio. Paul service she’s on he’s on the line with us from north carolina. He’s, professor emeritus at boston college, where he led the center on wealth and philanthropy. He helped to found the wealth and giving forum appear centered endeavour to deepen the philanthropic engagement of the nation’s seven thousand wealthiest families. Pull service. Welcome back. Hello. Nice to be back in a load up. Pleasure to have you all you both with us. Let’s. Uh, let’s. Give difference to the guy on the phone because he’s a slight disadvantage. Paul sharpish. What sticks out? Let’s? Start with the twenty sixteen review before we get to the twenty. Seventeen forecast which look out for you in the in the review of twenty sixteen, giving the that growth that occurred in twenty sixteen i think that the story in all of these numbers is that the amount of giving is growing twenty billion a year over the last few years and at four percent it’s going to grow faster than that. The compounding uh, this is a remarkable trendline that twenty sixteen confirms and the projections for twenty seventeen indicates the continuation of that. So you love about going the amount going charity is incredible and growing. You love this that we’re now three percent of gdp. Yes. And when we did our well transfer models, we found that if the goose’s growth and wealth and tdp the biggest growth and so after pete and so if the economy grows, we’re going to find dramatic, even greater dramatic roles in philanthropy. Doug white, let’s, let’s bring you in. But what strikes you about? Twenty sixteen? Well, what paul just said is a continuation off his studies back in the nineties and nearly two thousand with regard to what’s going to happen, and i think we’re seeing it take place. Right now twenty sixteen for me was defined by the mega gift there were so many of them and what i don’t have my fingertips is thie analysis of how the smaller gifts have grown. The number of smaller gifts have grown, but we do know that the mega gifts have have been more than they’ve ever been before. That has to be a fact er in your number’s right, rob it iss, in fact, twenty fifteen there were more mega gifts than there were in twenty sixteen, actually, so it is a factor you talk about a zuckerberg gift or another gift from the gates foundation, or or those kinds of things it’s it mega gifts are huge factor, but another factor is what we’re finding and i’d be interested in. The opinion of our two experts is what we’re finding is that millennials are a e-giving group of individuals and they’re looking for they’re not looking for cost per dollar, raised as their measurement there, looking for effectiveness and accountability on who they give, too, but they are an active force and philanthropy. The big gains that we’ve had in online giving in technology e-giving come largely from that group of people dug millennials. I totally agree with that and i think that’s one of the bigger challenges for the established charities around the united states who have become used to just the annual giving, continuing in continuing, which is fine, but i think the millennials, they’re saying they’re asking different questions, they’re not saying, am i loyal to this cause? They’re asking, even if i am loyal to this cause, how effective is my gift? And i think the question of impact we use that word, a lot of it is a topic of my new book. The question of impact is so important it should be, but now it’s important to the millennials because his roberts saying they give individually they give to causes that they can see an impact in or from paul what’s, your sense of what’s creating thiss terrific growth it’s, it’s, it’s, the dramatic growth of wealth at the very top. And what doug said is absolutely correct. Maybe gifts capture one dimension. What captures a larger slot? This is the million dollars and these air increasing and the list is getting longer, and i think, uh, that’s also helps explain the decline in religious e-giving ah, religious giving this to churches and the upper end does not give proportionately, uh, to their churches in the same ratio that the bottom ninety five percent of the population does so part of this change in religious e-giving is that so muchmore is going to education two new kinds of ventures to international to environment to social needs, and at the very top the percentage that they give to their churches is minuscule compared to how much they give the other causes. So that is part of not just the secularization which i agree with, but part of this is where the making gifts you’re going. Well, paul, how come we’re not cracking this seventy three, seventy four percent proportion that individuals account for in the total pie of giving? How come it’s it’s sticks there if we’re seeing all the us? Yeah, you? Yes, paul. We’re seeing all these mega gifts and the million dollar gifts. How come we’re not getting past the seven? The mid seventy figure? Well, one of the things is we just found out the foundation growth is is dramatic. Most of foundation growth and requests are individual gifts. And so when we’re looking at individuals, you have to understand what the is going on inside of individuals and that’s private foundations to it’s also the quest and it’s also remittances. Now, doug, i would say that report by your very astute ah research on remittances would be important. See what we’re finding out in some places that a lot of immigrants air not contributing, quote unquote to philanthropy. But the number iss between one hundred fifty and two hundred billion a year, that is sent back overseas largely to people in need buy-in immigrants recent immigrants alright, let’s, turn to let’s start to doug remittances. Well, that’s a good point that a lot of money does go back. And that’s, of course not counted in this whole process here in terms of generosity, the way we define charity, the way we defined, making the world a better place. That’s a huge part of that and it’s unfortunate. We can’t capture that. But we’re not talking about that and technical terms right now, but we really ought to, because it’s a an expression of our our society’s beneficence. And i really think that’s an important thing but there’s one other question that i just wanted to point out, or at least clarify from my own perspective, is that this really is a zero sum game. There’s only one hundred percentage points that we have to work with and so to actually ask or worry about, we’re only a seventy five percent those air living individuals, you know, on the other five percent, we have dead individuals, they’re still individuals. A question requests that’s really kind of eighty percent. I can’t. We could only go one hundred percent, but that’s on ly if nobody else gave anything, the foundations are the corporations. So i suspect it’s going to stay that way, in fact, has been their seventy five and five for the last long as i can remember. Well and paul’s point, of course, that a lot of the foundation giving is individuals directed by individuals. But it comes from the private found a it’s, just a medium. So as an expression of individual philanthropy, i think paul is correct. I would throw in the individual philanthropy into the foundation world and donor advised funds. Oh, yeah. We’re going to continue this conversation. I gotta do a little business. I have to talk about a couple of our response duitz and we’re going to get to donor advised funds after this pursuing pursuing dot com between brexit, the syrian refugee crisis and the inauguration of a new president today, the national and global climates have a lot of implications for what you can expect in your fund-raising we’re going to talk about some of those events later today. The next pursuant webinar is field guide to twenty seventeen fund-raising it’ll give you strategies that you need to keep up with. Everything is going on in the world. It’s a free web in or they always are. You register at pursuing dot com go to resource is and then webinars and i’m not too keen on that word. Webinars i don’t know it’s it’s in the lexicon now we’re stuck with it, but i don’t know i never liked it from i never like to from the beginning maybe i didn’t go public, but i’m expressing now webinars i don’t know, it’s just i think we could come up with something better than webinars. I understand where it comes from way have been seminar, but i don’t like it and i was early. I just i just wasn’t public early. We’ll be spelling spelling bees for fund-raising they have a new video up it’s from a night that raised money for hfc, which is help for children. The organisation needed help for its programs for children they turned to we’d be spelling there’s one hundred and ten thousand dollars in a spelling bee night. Check out the video it’s at wi be e spelling dot com. I’ve got video interviews for you from the twenty sixteen non-profit technology conference. Twenty twenty sixteenth. God, i need an intern, so i have someone to blame the twenty sixteen non-profit the the video is titled virtual organizations and volunteers. There are four interviews in those areas, and they are on managing remote employees, managing remote volunteers where to find volunteers and leveraging your start or tech volunteers. My video from the twenty sixteen non-profit technology conference with the links to the four interviews is that tony martignetti dot com and i, uh i suggest you check out this year’s non-profit technology conference twenty seventeen and t c this is always a very smart conference. I say it often because i believe it. Check out. Ntcdinosaur washington, d c this year, march twenty third, you get the info it and ten dot or ge, and that is tony’s take two the rest of the live listen, love, you know, it’s got to go out. I mean, there’s, no question about that. Besides the ones i already mentioned, we’ve got tampa, florida we’ve got forming ten missouri welcome farming to missouri. You haven’t been with us before. Welcome and somerville, new jersey! Welcome live listener love to you, let’s. Go abroad, of course. Seoul, south korea, always checking in so loyal south korea on your haserot comes a ham nida. We’ve got kiev in ukraine. No, i don’t know the scouts just do it live listener love to ah to kiev, tokyo also very loyal multiple. We’ve got multiple tokyo konnichi wa and the podcast pleasantries to the over twelve thousand listening in the time shift so glad that you are with us whether it’s a week later, days, months later, glad to have you with us. Pledge industries toe are over twelve thousand podcast listeners and the affiliate affections fast on the heels of the live listen love in the podcast pleasantries toe are am and fm listeners throughout the country am fm stations. Let your station know that you’re listening little feedback affections to the am fm affiliate listeners. Okay, rob mitchell, you you seem to be chomping at the bit to talk about donorsearch vise dh funds e-giving first about donor advised funds. I am a big proponent of donor advice found about and i can tell you that they’ve been the one of the biggest contributors fromthe grants that they’re making out of donor advised funds, since the depth of the recession is this tract in in your algorithms is part of the individual giving. Is that where we see dahna vice funds? What? We saved an analogue kate id on allocated. Okay, okay. Don’t advise funds are are they’re not knew they came in with the tax act of sixty eight. Yeah, they they’re not new. But this company called fidelity an investment company. I saw an opportunity and the thing that i love about donor advised funds and and paul talked about this a bit. The rise of the million dollar gift i think donorsearch vice funds have a big part of that because a za contributor myself, if my daughter’s here in the studio, listening with us if our family adopted a charitable project for which we wanted to contribute. But we did not have enough money available to us to just scratch a check, we could create a donor advice fund, a add to it, let let it be invested so that it would grow so that we could meet our our charitable mission for our family in a future year. Of course, this is a subject of controversy, because there are people who have on the other side of this, and they’ve written editorials in the chronicle, as you have, who believe that there’s too much money parked in donor advised funds is not getting out to the charities it sits. The donor gets their charitable deduction immediately, but it could sit for decades or generations, theoretically in the donor of ice fund and never get to the charities that it’s supposed to be benefiting. Well, theoretically, that could be the case. But if you read the fine print, if you set up a donor advice fund with one of the big three fidelity vanguard er schwab, or with the silicon valley foundation or ah any number. Of different true charitable organizations, community community funds are our big proponents of donor advised funds they can’t carry on perpetually, and the other thing is just a mathematical, just a mathematical equation. Donorsearch foundations are required to give five percent of their assets each year, and so what do they give a little more than five percent of their assets? You know, this is the argument against requiring donor advised phone or it five contributed percentage each year donorsearch vice funds or giving over twenty percent of their assets as grants to end use charities each year. But there are people who would say, well, let’s, make it fifty or forty or forty or fifty will see an increase. All right, we’re going, we’re gonna leave this that because i want to talk about some of the want to talk more about what you’re involved in more concretely, let’s bring doug back, doug so there’s a lot going on in the world, not the least of which is presidential inauguration today. We’ve got brexit, the a great britain leaving the european union. We’ve got syrian refugee crisis in europe. How do any or these or other things that are on your mind ah, affect our twenty seventeen philanthropy? Well, about an hour ago, the new president referenced ah, a lot of america as being in a state of some carnage, that’s his word, and whether you look at it that way or not, i do believe that philanthropy is going to have to shoulder a lot more than it has in the past, but we all know that philanthropy can’t do all of the work. And so i think one of the questions as this administration grows into its maturity, will be what kind of services will be cut back where philanthropy will have to fill in even more of the gap. So i think one of the messages and one of the reasons i think that twenty seventeenth will be a great mother where’s, my damn intern will be a great year for philanthropy anyway, is that the messages will be very concrete and very strong about the needs that society faces. That a lot of government support, as we see it right now. It may not happen this way, but a lot of government support won’t be there for. So i think the philanthropic sector will have to really step up to the plate in this in this coming here. How about you, paul? What about world affairs and twenty seventeen? I am much more optimistic. You can look up the wall of fear listeners, and that will lead you, teo. Not sleep very well at night. About your money. Uh, the the issue with, uh, philanthropy making up for government spending has been does without due respect. Um, talked about when any republican has been elected. And you have to understand that the federal budget is three point eight trillion dollars a year. Philanthropy it’s five hundred billion. And most of that doesn’t go to social services, and most of it is never going to go to social service. So it’s not going to make up very much, uh, we could hope it will, but that nothing that can touch medicaid, medicare, food stamp budgets. But that is of the non discretionary part of the federal budget is all. This is two point eight trillion. Can the discretionary part is a trillion, so i don’t i don’t have that problem in the forefront of my mind that’s making up it just can’t okay let’s, turn to doug. I just want to be clear. I i probably made on incorrect impression a moment ago. I didn’t mean to imply that ah, charity would make up for what government does or does not do and you’re right. That question has been around for ever, and the answer has been around forever charity can’t can’t step in like that. What i meant to say and i apologize for saying it badly, was that this gives thie organizations and opportunity to make their case stronger, not because they will say we will make up the difference, but because the need is there and your philanthropic support is even stronger than it’s ever been, which is, i think, a slightly different way of saying what i meant to say before, because paul, you’re so right. This is this is a question that’s been around forever, and i don’t believe it’s just for republican presidents, i think no matter what we do, ah, there will be gaps, by the way that the government does. Not feel and that’s going to be a matter of policy, but that’s always going to be the case and that those gaps will not be filled by philanthropy. But philanthropy, the organization’s themselves, if we kind of shift the mirror over there, can then say, hey, we have a big job to do support us, so i hope that bridges those two comments, okay? So you’re saying it maura’s as opportunity for round and around messaging and marketing, basically for charities, but paul’s absolutely correct. I don’t think anybody would disagree that what what charity does to help society is nothing by comparison to the amount of the government could spend to do the same kinds of things pull anything else you want to? You want to add on that? No, i think doug’s explanation is just perfect. And i appreciate see that two professors in agreement. Wow, e-giving might give them a chance. Well, i’ve always in my heart is with paul he’s. Been one of my heroes for the last two decades. All right, doug, how about you with the international affairs and impacting? I’m sorry. Yes, i’m looking at robyn. I’m saying, doug, rob international affairs twenty, seventeen and beyond. What do you see? Well, first let’s talk about twenty sixteen. The first half of twenty sixteen was dramatically different in typically do not allow anarchy on the show. When i was about twenty seventeen, expecting getting there, but but, uh, you came from texas. I’ll give you the difference. Go ahead, anarchist. There was a lot of uncertainty. I mean, we had the weirdest presidential election in my lifetime. We had distraction from the olympic games. We had an increase in in terror events worldwide and e-giving was essentially flat for the first half of the year. And then it took a spike in july, flattened out again. And then the last quarter of the year after the election. What? What are algorithms show is that giving spike xero after three months of the year? So the growth in twenty sixteen was not linear? It was not. Lin. What was what was the first six months? Like it was point nine percent growth. So just basically one percent. But we got ended up with four point four. So four point one four point one. I’m sorry for point force for next year for point one. So that extra three point one three point two came on the second half came and you’re saying there was a big spike in july first in the summer? Yes, and then again in november, right after the election? Exactly. Okay, and and the spike in november continued literally. Is that my saying that correct, but it’s a word linearly. Okay, thank you for correcting me on that. But they’re two professors with this. I’ve got to be correct. We’ll have their mikes shut off. Xero it’ll be now it’s me. That was that was a linear progression. Okay? For november, october, november and december, and right now, but that’s what? It was, but there was a spike in november right after the election. November eighth. Absolutely. It was. Okay. I get just a tribute that teo stability. You know, the raucous election is over. I i think that there was some election relief involved emotionally, i think that people were people. They weren’t sitting on the sidelines, gifts were still being made. They just weren’t growing there giving at the rate they had been growing in past years. And we’re talking mostly about individuals but corporations corporate giving grew at a good rate this last year, now for twenty seventeen, um, i think there are a lot of unanswered questions, and we’ve got the expert on the phone with us professor schervish. You know, one of the one of the things that the new president has talked about in his tax plan is an elimination of the estate tax. And paul’s paul spent a great deal of his professional career talking about generational transfer of wealth, and we’ve all talked about what what would happen if the estate tax went away with what would the impact on charitable bequest giving b and so that’s one of those unanswered questions. We don’t know what the tax plan is going to be and it’s going to be a very, very interesting year, and i have more questions than i have answers. Frankly, all right, let’s, go out for a break. When we come back, we’ll ask paul about the estate tax repeal possibility on i also want to get this corporate five percent e-giving proportion, and i got another live listen to love one specific one. Stay with us. Like what you’re hearing a non-profit radio tony’s got more on youtube, you’ll find clips from stand up comedy tv spots and exclusive interviews catch guests like seth gordon. Craig newmark, the founder of craigslist marquis of eco enterprises strong’s best from donors choose dot org’s aria finger, do something that worked. And naomi levine from new york universities heimans center on philantech tony tweets to, he finds the best content from the most knowledgeable, interesting people in and around non-profits to share on his stream. If you have valuable info, he wants to re tweet you during the show. You can join the conversation on twitter using hashtag non-profit radio twitter is an easy way to reach tony he’s at tony martignetti narasimhan t i g e n e t t i remember there’s a g before the end he hosts a podcast for the chronicle of philanthropy fund-raising fundamentals is a short monthly show devoted to getting over your fund-raising hartals just like non-profit radio, toni talks to leading thinkers, experts and cool people with great ideas. As one fan said, tony picks their brains and i don’t have to leave my office fund-raising fundamentals was recently dubbed the most helpful non-profit podcast you have ever heard. You can also join the conversation on facebook, where you can ask questions before or after the show. The guests were there, too. Get insider show alerts by email, tony tells you who’s on each week and always includes link so that you can contact guests directly. To sign up, visit the facebook page for tony martignetti dot com. I’m peter shankman, author of zombie loyalists, and you’re listening to tony martignetti non-profit radio. Big non-profit ideas for the other ninety five percent. Special live listener love is right here in the studio because that’s alexey mitchell, visiting from she’s been she’s extremely well travelled twenty four year old india, thailand, germany, switzerland what am i leaving out? It’s? Amazing. Very well travelled france student at columbia university her proud father saying france. Lexie, thanks for being with us live. Listen love to you. Okay, let’s, bring paul in. Paul, you want to you want to ah opine about the possibility of the estate tax repeal and what that would mean? Well, i have done some research on that. Yeah, i’ve heard rumors to that effect. Yes, some but about the repeal on and so has the center on philanthropy. And what we’ve done is we’ve asked people in research what would be if there is in a state tax currently, what would be your distribution of your state? And it turns out that it’s, pretty much what it would be, uh, correctly, according to what is happening to distribution two heirs to charity and to taxes. But if we say what happens if you eliminate the estate tax, what will happen? People that don’t like the elimination of the state tax the issue for them is largely that less money’s going to government. The evidence is that from these studies now these are people giving their opinion is that mohr will goto philanthropy and more well, goto airs. The loser is government by definition. Now people that think that government is philanthropy are going to object to the appeal repeal of the estate tax. But even the government has shown in one or two studies earlier on that to repeal the estate tax has not led to a decline and charitable giving, and i predict because of how wealthy people are and needing to figure out for their own sake, what to do good with that body there’s not going to be a problem with the abreu teal of latex. Okay, you’re you’re pretty well recognized as as an authority, but i love that name. All right, you got robbed, mitchell’s vote and doug is doug eyes knotting. I’m not nodding off, no nodding, nodding office don’t know. I’d say no, no, no, i just wanted to clear up. If someone’s not, i’m not. I’m not gonna touch that with it can’t happen just doesn’t happen. Non-profit radio and it’s my intuition that because although i haven’t studied it as much as paul he’s absolutely correct it’s a non answerable question, but go for it. I mean, there could be other reasons to not eliminate the estate tax. And by the way, the estate taxes pretty much eliminated for most people by far because of the extremely high yeah it’s five million dollars that’s that’s. Ten million per couple. So i mean, what are we talking about here? I know i don’t think there’s been any decrease among people who are who have a states of less than that and their request terrible giving i i’ll give you an anecdotal. A demonstration of what paul’s just said our doug’s just that that is that i unfortunately lost my mother in november. We’re now dealing with her state, which is a non taxable size to state her charitable contributions to me were all striking, actually, yeah, they and she got no tax benefit whatsoever from for creating those charitable bequests. Wait that’s widely recognized people aren’t doing it for the for the tax benefit, for the most part, mint study after study, bank of america has studies of high net worth giving, and the tax benefit is like usually the third or fourth reason that people site for leaving leaving charity in their state. I want to turn to the to the corporate this is just a little bug, a boo of mind, maybe, and you’re welcome to tell me if i’m if i’m mistaken. Corporate giving is five percent of the van you’il giving, according to the atlas of giving that seem small to me. Are you doug? Is my my off base with court corporations only contributing five percent and tell me if i am? I don’t think you’re so much off base again. We have ah xero some game here, it’s one hundred percent. So what do they represent within that? They’ve been around five percent for, you know, for a while, but i think, really your question leads me to think about what their motive in charitable giving is and their place in society. They think corporations are becoming much more aware of the role they need to play in society, but at the same time they have one primary purpose, and that is to make money for their stockholders. We don’t do that in the charitable world, but corporations do that. And so there could be a huge uproar if corporations got more charitable, all right on. And i mean to distinguish that from the newly growing be corporation segment let’s get at it this way, rob, where what proportions of the different sources of fund-raising are are growing across a bequest, individual foundation, corporate missing other sources anyway, so we’ve got this now three percent gdp. Well, you have to somebody’s giving maur what proportion? Well sources e-giving you have to consider where the proportions are. So as a cz doug and paul of both pointed out, when you add individual giving to bequest giving which is actually individuals that’s, that’s, that’s a gigantic right so that’s gigantic number ok, and so that’s, where most of the growth comes from, no matter what the growth rate iss and so if corporations, as they did this past year, they their gifts grew at ten percent, which that’s the first time i’ve seen that since we’ve started the atlas of giving and it’s way above the annual growth of four point one. Exactly so, it’s it’s more than double. Okay, except that, but but paul’s exactly right. In the case of publicly traded companies there first, their first priority is to their shareholders. And if you don’t think that a shareholder of the shareholders meeting is going to stand up and challenge a charitable gift because it could have been something that enriched their shares, you’d be wrong. Now ninety five percent of the businesses in america are not publicly traded their small businesses. I i have a couple of them i give to charity dahna through my small business, but it’s much more difficult to measure those kinds of gifts than it is the large corp large, publicly traded corporations. We just have about a minute and a half left. So i want to just touch on some some state data because you track sector source and state where’s the most generous state in the country. You know, this year what we showed was this is close to you, mike. This is going to come as a surprise. Heimans north dakota. I really love north dakota. North dakota grew seven point one percent and the states that you typically look for our texas, florida, california and new york, north dakota grew family are the most populous states, those air three most popular, of course, california number one texas tune of new york is number three, so the north dakota phenomena is also a function of their population and the and the oil play that has happened and what we’re finding from the oil play, whether it’s in texas or north dakota, is that, um, there’s a delayed effect and charitable giving and the north dakota you’re saying the population’s a factor because it’s so small it’s so small, i don’t know what the population is there but it’s it’s small what? We love north dakota. All right, gentlemen, we gotta leave it there. I want to thank you very much. Ceo rob mitchell from atlas of giving alice e-giving dot com former professor at columbia university doug white. We’ll have him back when his next book is is ready. It’s on the wounded warrior project. And paul service professor mary-jo boston college, gentlemen. Thank you so very much. Thank you, tony. Thank you. Pleasure. Next week, amy sample ward, our social media contributor returns if you missed any part of today’s show, i beseech you, find it on tony martignetti dot com. We’re sponsored by pursuant online tools for small and midsize non-profits data driven and technology enabled, and by we be spelling supercool spelling bee fundraisers, we b e spelling, dot com, our creative producers, claire meyerhoff. Sam liebowitz is the line producer. Gavin dollars are am and fm outreach director shows social media is by susan chavez, and this cool music is by scott stein. Be with me next week for non-profit radio. Big non-profit ideas for the other ninety five percent go out and be great. Kayman what’s not to love about non-profit radio tony gets the best guests check this out from seth godin this’s the first revolution since tv nineteen fifty and henry ford nineteen twenty it’s the revolution of our lifetime here’s a smart, simple idea from craigslist founder craig newmark yeah insights, orn presentation or anything? People don’t really need the fancy stuff they need something which is simple, in fact, when’s the best time to post on facebook facebook’s andrew noise nose at traffic is at an all time hyre on nine a m or eight pm so that’s, when you should be posting your most meaningful post here’s aria finger ceo of do something dot or ge young people are not going to be involved in social change if it’s boring and they don’t see the impact of what they’re doing. So you got to make it fun applicable to these young people look so otherwise a fifteen and sixteen year old they have better things to do if they have xbox, they have tv, they have their cell phones. Me dar is the founder of idealist took two or three years for foundation staff, sort of dane toe add an email address their card. It was like it was phone. This email thing is fired-up that’s why should i give it away? Charles best founded donors choose dot or ge somehow they’ve gotten in touch kind of off line as it were on dno. Two exchanges of brownies and visits and physical gift mark echo is the founder and ceo of eco enterprises. You may be wearing his hoodies and shirts. Tony, talk to him. Yeah, you know, i just i’m a big believer that’s not what you make in life. It sze, you know, tell you make people feel this is public radio host majora carter. Innovation is in the power of understanding that you don’t just do it. You put money on a situation expected to hell. You put money in a situation and invested and expect it to grow and savvy advice for success from eric sabiston. 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Nonprofit Radio for January 29, 2016: 2015 Giving Report & 2016 Forecast

Big Nonprofit Ideas for the Other 95%

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Rob Mitchell, Paul Schervish & Doug White2015 Giving Report & 2016 Forecast

We don’t need to wait until June! Atlas of Giving CEO Rob Mitchell releases the Atlas’ analysis of last year’s giving and their initial forecast for 2016. Adding commentary are professors Paul Schervish from Boston College and Doug White from Columbia University.

Rob Mitchell
Rob Mitchell
Paul Schervish
Paul Schervish
Doug White
Doug White

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hello and welcome to tony martignetti non-profit radio big non-profit ideas for the other ninety five percent i’m your aptly named host oh i’m glad you’re with me i’d be hit with deacon veins teno sinusitis if if you handed me the mere notion that you missed today’s show twenty fifteen giving report and twenty sixteen forecast we don’t need to wait until june atlas of giving ceo rob mitchell releases the atlases analysis of last year’s giving and their initial forecast for twenty sixteen adding commentary are professors paul schervish from boston college and doug white from columbia university because you can’t have a report without academic commentary it’s it’s just not done we’re sponsored by pursuing full service fund-raising data driven and technology enabled you’ll raise more money pursuing dot com also by crowdster online and mobile fund-raising software for non-profits now with apple pay mobile donation feature crowdster dot com i’m very glad that the latest data brings rob mitchell back to the show and the studio he is ceo of the atlas of giving reporting on and forecasting charitable giving in the us in his past he led national fund-raising for the american cancer society they’re at atlas of giving dot com and he’s at philanthropy man dot com which could also be read as philantech roman ah that’s on twitter not philantech roman dot com at philantech roman or if you prefer philanthropy man which is probably what he prefers or we could do at atlas of giving or adverse e-giving rob mitchell don’t start talking until i say welcome robin i’m sorry welcome back i’m not going i’m not going to tolerate anarchy on the show welcome rob mitchell welcome back it’s good to have you back thanks tony it’s always good to be back very welcome and don’t correct me no you can’t you can correct me actually i’m a little off today i’ll tell you what sam why don’t you bring down a paul and doug’s mike’s because robin are going talk for a few minutes and then ah we’re going to bring paul and dug in rob mitchell before we get to the announcement the big announcement i saw the press release today and everything tell us about atlas of giving what is this thing that you’re running atlas of giving as the only measurement of charitable giving in the united states by sector source and state that has produced monthly and we are also the only forecast of charitable giving by sector source and state produced updated monthly how do you do this report and forecast well we we had a i had a situation with a boardmember when i was at the american cancer society who was looking for a benchmark on how we’re doing and he suggested that charitable giving in the united states was tied directly to certain economic demographic and event factors and if we could identify what those were we could build a benchmark so we hired a firm of twenty five phd level statisticians and analyst and we were able to and we gave them forty two years of published giving data they were able to come back to us with an out they not only found what factors were involved in charitable giving they found out what strengths for each what the strengths of those factors were relative strength relative strengths okay this is called correlation science so they came back to us with an algorithm for national giving when matched with forty two years of past history matched at ninety nine point five percent which we call a correlation of coefficient of correlation and that was great so that was that was our first algorithm ok since then we’ve built algorithm we now have sixty five algorithms we have we have one for each of nine sectors we have one for each of forced sources so individuals foundations bequest and corporations and we also have one for all fifty states plus dc okay all right cubine business the same kind of technology by the way that hedge funds use and other forecasting and analytical firm to use today different from things that were created several decades ago that were things like on econometric model perhaps so well there’s econometric data in your algorithm they’re absolutely yeah they’re having a little is but on our algorithms get better that the more the more we use them the more we’re able to find out what the strengths of the factors are and what factors are involved for example in one of our sources there is a correlation with auto parts sales now that a correlation does not necessarily mean a relationship yeah it just means that there’s a strong correlation and in that case that correlation is a very strong correlation ah we’ve also recently found that there is a strong correlation with equipment heavy equipment leasing and interesting okay correlation not cause and effect but well sometimes like you finds an effect sometimes it is but it doesn’t have to be yeah okay and there’s numbers of factors for all these different algorithms that you have for the sixty five different okay on how many years have you been doing this we’ve been doing this since two thousand ten okay all right let’s get teo to the announcement for let’s start of course with the review of twenty fifteen way had a nice increase from two thousand fourteen tio two thousand fifteen did well we did have a nice increase not as good as the one from two thousand thirteen to two thousand or two thousand fourteen to two thousand fifteen minutes we’re doing two thousand fourteen to fifteen fifteen but this was your little nervous we’ve been on non-profit radio before i’m scared to death tony is the because i told you not to be an anarchist is i don’t know it’s because it’s hot it’s hot studio today because the professor is in the room it’s micah’s off you can’t even say anything well you can but we’re not gonna hear it now and paul is listening now you just i mean we did this last year you okay take a breath take a deep breath i’m ready to go okay came from san antonio so we’ll give him a break all right eso from twenty fourteen to twenty fifteen we had a pretty nice increase did we not yes we did we had a four point six percent growth increase in total giving in the united states for a total of four hundred and seventy seven point five five billion dollars which is the largest amount ever recorded and shared will giving okay and what way just have like a minute and a half so before i go out for our first break but you know we have the hour together so no rush no rush what are a couple of the highlights from the twenty fifteen giving just named too i would i would say that summer giving was actually better than urine giving which would be a surprise to most people yes it would okay we’ll talk about that on dh what else you got thie other thing is that since the depth of the depression in two thousand nine charitable giving has grown fifty one percent through two thousand fifteen okay since the depths of the recession in no nine okay we’re gonna go out for our break and when we come back rob and i are going to continue talking about some highlights and then we’ll bring in dog white and paul schervish all for the twenty fifteen giving report and twenty sixteen forecast stay with us you’re tuned to non-profit radio tony martignetti also hosts a podcast for the chronicle of philanthropy fund-raising fundamentals is a quick ten minute burst of fund-raising insights published once a month tony’s guests are expert in crowdfunding mobile giving event fund-raising direct mail and donor cultivation really all the fund-raising issues that make you wonder am i doing this right is there a better way there is find the fund-raising fundamentals archive it tony martignetti dot com that’s marketmesuite n e t t i remember there’s a g before the end thousands of listeners have subscribed on itunes you can also learn maura the chronicle website philanthropy dot com fund-raising fundamentals the better way kayman duitz welcome back to big non-profit ideas for the other ninety five percent okay rob let’s let’s start with this summer e-giving very interesting so we’re talking ah june july august bigger than october november december actually it was it was may june and july okay andi what do you think accounts for this well as you remember i said we’re working off of economic factors and one of the biggest economic factors were working off of force some of our algorithms is the value of the stock market yes which was down in december way down in december and then secretary yellin of the fed announced a rate increase yeah hi didn’t help either high interest rates bad forgiving high interest rates bad forgiving and there they are a harbinger of inflation coming o k we should say hyre i mean a stark values go interest rates are still low quite low very low but hyre okay spell it out for us why why does the higher interest rate i mean ah likely decline and give charitable giving well you have to consider the fact that seventy three percent of all charitable giving in the united states comes from individuals and so it’s all about disposable income so if you’re paying more money i know that you’ve just bought a new place if you’re paying more money for your mortgage you have less money to give if you’re paying more money for your car payment you have less money to give it if the interest rates are hyre you’re going to be paying more and inflation comes into effect in much the same way you’re paying mohr for the items that you usually pay for and so you have less disposable income okay and when seventy three percent of the pop of the charitable of all charitable giving comes from individuals but that makes a huge difference and the higher interest rates you said suggest inflation they suggest coming in coming inflation okay there are there a predictor of they are predicting a leading what we say what’s the call that a harbinger but yeah that that that’s not the technical term we’re going is not propagated we got the fancy leading leading indicator is the leading indicator is that right yeah okay i only have a bachelor’s degree in economics but and rob is alluding to the fact that i’m buying a home in north carolina actually on the beach in north carolina that’s what he was talking about my home purchase um okay so wait so i assume way i presume from all this we saw a decline in charitable giving from november to december yes we did and that’s what that’s what hurt the fourth quarter and so may actually started it i actually started from october to november and then it really took a dip in december so did we see a decline from september to october yes we did and then october and then november was lower than october yes uh yeah i’m not sure about that look at your looking uh maybe i remember wrong look at your charts no november was all slightly higher than lightly okay but yes smaller decline i’m sorry smaller increase and then no and then december was down from november correct okay um all right so that accounts for our fourth quarter not so good not so good okay and we’ve had other fourth quarters that haven’t been so good to thousand won is an example charitable giving was looking good until we had september eleven yes and then if you were a non disaster charitable organization non disaster related charitable organization you’re giving dried up for six months and we’re gonna get to actually is right now that not that that was a recession in two thousand one but we’ve recovered very nicely since you said two thousand nine in the in the midst of the recession yes it’s been it’s been a remarkable recovery fueled mostly by the stock market and and for us as we analyze the data it’s not so much about it’s not so much about um what’s going on it’s where your money comes from how do you raise money colleges and universities raise money very differently from a very large chair nationwide charitable organization or a church that relies on lots of small gifts from lots of donors and when unemployment is high one thing that we know very very specifically is that when unemployment is high it really hurts those large organizations that rely on those small gifts than those those events that rely on small gifts and it takes as many as two years after one becomes reemployed or finds a new job for them to reach for them to resume their giving and if they have a hint that they’re going to lose their job they stopped giving even before they lose their jobs there in twenty fifteen i presume unemployment what would’ve been helpful fight would have been a positive factor absolute employment was declining absolutely so that was a great spot for twenty fifteen okay and you said were up fifty one percent i think from two thousand nine from two thousand ninety okay um let’s talk about as a percentage of the gross domestic product now gdp abila e-giving says three and a half percent of gdp for charitable giving a real real gdp okay make the distinction please inflation adjusted okay thank you um the conventional Wisdom is 2 percent a lot of people out there saying two percent including e-giving yusa and a lot of others that’s the that’s the pretty common number uh is everything else wrong and atlas e-giving is right at three and a half you’re absolutely correct what’s the distinction this’s because we’re talking billions and billion many billions of dollars difference between three and five percent and two and a half percent two percent what’s really amazing tony is if you look back forty years over e-giving use a data they always come up with the same answer always two percent two percent yeah well they they and a lot of others they’re not they’re not the sole ones that they’re not outliers but there have been a it’s two percent and it’s been that for decades i believe but there have been some major things happen that haven’t that that aren’t accounted for for example technology i mean think about think about technology twenty years ago we didn’t have we didn’t have technology to support special events we didn’t have technology to support um donordigital bases we didn’t have this kind of stuff it sophisticated you’re saying the world has changed the world has changed dramatically plus where we’ve we have added a million and a half charitable organizations so not all of them are going to make it but there are a few that are going to make it and make it really big and that makes a difference also all right so the these air factors that would lead one to conclude they would they would suggest that intuitively that e-giving might have would have increased as a percentage of real gdp but that’s but that’s our intuitive sense i mean we need data that shows it’s three and a half versus two if you’re goingto ifyou’re the out you’d hear the outlier at three and a half percent so we have to we need more than just intuition okay well if you look a tte our Numbers 4:2009 they were at two percent but because of what’s happened since the recession and taking to account how how we measure um it’s it’s near three and a half percent now of gdp you’re seeing it rise you’ve seen it right now since two thousand i thought you’ve been doing this since a two thousand eleven i thought two thousand ten two thousand ten but we’ve also back wait built back at your base that goes back for sector source and state that goes back to nineteen sixty actually had the ninety nine point five percent accuracy ok just don’t keep you honest here please well there’s a professor not prohibited but that’s the least of our concerns this is non-profit radio that should be not columbia university and boston college non-profit radio should be your leading concern um okay so you’re you’re saying that since two thousand nine you have and the stoploss e-giving large has seen increases you know we’ll get to the factors okay but you’ve seen increase from two percent two three and a half percent of riel inflation adjusted gross domestic product absolutely edible giving as a percentage thereof yes okay speaking like an encyclopedia okay what are some of the fact that technology has improved mobile giving was i don’t know if we had mobile giving in two thousand nine i can’t remember but it’s certainly has become quite a bit more prevalent since two thousand nine two thousand ten what other factors do you attribute this um we wanted to have percent growth in we’ve had crowdfunding we’ve had prize philanthropy we’ve had that was the last one crowdfunding and what prize philantech price falling through what is that mrs jordan i’m putting you in george in jail prise philanthropy what is priced philanthropy i’ve never prize philanthropy a few years ago starbucks offered a four million dollar prize to the organization that could get the most votes on dh they brought okay broke it up so that your social media to get the votes and so prize philanthropy entered the equation okay other factors is a seventy five percent increase in as a percentage of gdp from two to three and a half absolutely well look at what the stock market did since two thousand ten it’s been it’s been on a terror now this year was different but it it definitely made a difference and another thing that has made a significant difference is donor advised funds if you look well fidelity fidelity announced this week just out today how many billions of dollars went toe twenty fifteen three and a half three and half billion i think help one hundred sixty six thousand one hundred sixty six thousand grants helping one hundred thousand roughly charities or so those air ball partners but the three and a half billion it was in the chronicle today now don’t advice funds are being criticized it was just also just two weeks ago or so in the chronicle there was a commentary op ed piece that enough money is not flowing out of them and very very harsh about against dahna advice funds too much money basically the the writer said parked in donor advised funds not being distributed to charities donorsearch vise funds have added more to the charitable economy than anything else has in the last i would say in the last five years and it’s because now for the commentator you’re talking about that that that did the opposite for the chronicle he provided no data and yet we have data from donor advised funds that show that donor advised funds have provided as much as four or five times as much in in terms of percentage for grants to other charitable organizations as have private foundations four to five times as much from dahna advice fundez provoc foundation absolutely all right uh not specifically on that point but we may get to it let’s that spring in our eyes our academic team doug white is here in the studio again welcome back he is director of operations at columbia university’s master of science in fund-raising management program he also teaches board governance ethics and fund-raising his most recent book is abusing donors intent chronicling the historic lawsuit lawsuit brought against princeton university by the children of charles emory robertson we covered that book with doug on non-profit radio dahna welcome back thank you for having me tony it’s good to see you thank you it’s a pleasure i love that deep deep radio voice wonderful let zoho general before we get to the details of dahna advised funds and improvement from the recession what strikes you about the twenty fifteen report from atlas of giving a lot of things first of all i think you’re right to focus on how different it is from what we’re hearing from giving yusa and what strikes me within that is we as a philanthropic community very much pay attention to what giving us a says and not very much attention to the alice of giving and i’m thinking that should change okay uh well way actually did a face off with atlas of giving and giving us a rob rob was on that show and there were representatives from the from the board and the academic team at indiana university the senator on philanthropy there and that was maybe a year and a half or two years ago so we had them we had them meeting and i’m not sure we uh well yeah i don’t think anything conclusive came of it they both believe that they’re the most accurate doug you think that atlas is more accurate well i don’t know for a fact but what i’m hearing makes a lot of sense i’m not a statistician and i think my life is better for that but i would say that the news that i’m hearing from atlas of giving that is so different from giving yusa is a little akin to me a cz if someone had told me that the way we measure the stock market growth is wrong it’s that fundamental because we rely on those numbers for so many things and it’s very much a part of our dna and our community our charitable community but i think we need to really do some investigating and find out really who’s right here and so far rob sounds like he’s got a lot of information that i think i’m hearing that e-giving yusa does not is that true rob is that what’s going on here it is true atlas of giving well e-giving yusa created their econometric model more than forty years ago they have tweaked it a couple of times um as i said they always come up with the same answer which is giving its two percent of real gdp so you’re claiming that they’re using an algorithm that’s forty years old and the factors within that algorithm algorithm have changed dramatically over that period of time and those you are on top of that’s what we’re on top come on let’s be fair that we got to be fair to giving us a sure not sure not here to say how their algorithm has evolved over and i’m not taking process has involved i’m not taking the side i just need to get out of the question i would say this is the major difference between the atlas of giving and giving yusa e-giving yusa is will not come out with their two thousand fifteen results until late june we have to wait till june right late june it’s not monthly it’s not contemporary and it contains no forecast yeah the june is a big problem because if you’re a big problem because if you’re basing your fund-raising projections and plan on what you what what happened last year although i mean i hope you have other factors besides his besides history but you have to wait till the middle of the year to get the review of last year and then there isn’t a forecast well there’s one other fundamental problem that they have and that is that they’re using irs data that is more than two years old to come up with their number for what happened in the year there measuring now i don’t know about you but i don’t know how you can predict the news or measure the news with a new york times from two thousand fourteen on this date to say what what happened today okay all right we’re going we’re going to try to leave that there we’ll see what paul service has to say i’m not comfortable going to much further because again the atlas is not here to latto defend itself essentially let’s bring in paul schervish he’s a professor emeritus and retired as professor of sociology and as director of the center on wealth and philanthropy at boston college with john havens he co authored the very well known nineteen ninety eight report millionaires and the millennium which predicted the now well known forty one trillion dollar wealth transfer from baby boomers he’s currently writing aristotle’s legacy the moral biography of wealth and the new physics of philanthropy welcome back paul schervish hello tony hi doug i’m happy to be here thank you paul what what i’ll ask the same question i asked doug what strikes you as a as a highlight of this twenty fifteen report from atlas of giving the a larger amount of giving that is chronicled by the atlas elearning in contrast to the e-giving yusa numbers um e-giving usa has about a total giving of about three hundred ah forty billion and the atlas of course is what is it uh for seventy something for seventy seven point five five seven years well yeah that’s right but paul isn’t that the that’s the twenty fourteen e-giving use a three hundred forty billion right that’s twenty fourteen they haven’t released their twenty fifteen they won’t until june that’s correct but they’re not going to go up to four seventy five ah and so ah that contrast is dramatic now we have done some research when looking into the independent sector study we were hired by kellogg foundation and by independent sector to evaluate their survey that was the benchmark for giving from the early nineteen uh nineties through about two thousand and we actually went to various households that were interviewed by the gallup organization and what we discovered as we sat there with the um uh with the interviewer and then sometimes talk to people separately was how muchmore giving when you asked the question uh more detail people are going to report so people understand more about what you’re asking and prompt them both in the in two ways one with bae is what sector they gave to you let’s say now what did you give to education and then you would prompt them again and say what would be the amount that you gave to that to education bye ah people coming to your door by being asked by an organization by answering and responding teo mail solicitation teo email solicitations and so on and we found out and this was actually research done in co ordination with i wrote it with patrick rooney and at centre on philantech being we found out that the more props you give the hyre e-giving its and the problem is invoked survey research you don’t get a chance to ask those prompts and secondly for the independent sector we found that it was underestimating e-giving and when you ask more carefully to the people that they had interviewed so some of our own behavioral research indicates that there is probably more giving than what is being picked up by the center on philanthropy which is the better which is the giving us a report you supplement the irs data with their uh center on philanthropy panel study for people who are you uh e-giving at lower levels who don’t itemize so they do have some additional data but i think that we’re missing a lot in giving okay well good that so i think that uh the atlas uh is probably more accurate and there’s some other factors we can talk about later about how we’re even even the atlas maybe under estimating e-giving okay all right we have tio take a little pause from our conversation sam maybe you can just doug’s mike because i feel like he’s you know it’s so comfortable you okay they’re all right mike mike was drooping okay don’t have droopy mic syndrome um and we’re going so we have more on this conversation coming up first pursuant they’re cloudgood based tool is one of their card based tools velocity designed to specifically help gift officers e-giving the gift officers the analytics that they need and that you need as an organization stay on task and raise more money data like number of active proposals that air out average close rate your average time to close and the all important dollars raised it’s a simple problem solution statement you need to raise more money velocity helps you it’s one of the pursuing tools at pursuant dot com i also have to give a shout out to crowdster they have their new one of a kind apple pay mobile donation feature which helps you increase your mobile donations crowdster gives you crowdfunding campaign sites that have back office simplicity but for outward for donors outward facing elegance so your donors are seeing a very pretty and very simple site and you’re back office also has a very simple site to work with and they are at crowdster dot com you could use crowdster and velocity together crowdster for your outward facing campaign and velocity for your analytics and and back end time now for live listener love we’ve got live listeners they’re all over the world it’s unbelievable seoul south korea on your haserot tokyo japan ni hao and also nigata japan ni hao coming up coming into the u s st louis missouri new bern north carolina stamford connecticut tuscaloosa alabama live love live listener love tto all the live listeners those and others affiliate affections gotta send affections out to the am and fm station listeners throughout the country our affiliate stations playing the show whenever they fitted into their schedule no you’re not listening live but your station has worked us in we’re very glad to be a part of your station timetable affiliate affections to the am and fm listeners and the podcast pleasantries over ten thousand people listening wherever whatever whatever time whatever device painting a house washing dishes driving subway ing training planing podcast pleasantries to be over ten thousand podcast listeners okay let’s go back to our review and uh and forecast paul i’m going to ask you about donorsearch vise funds what and then very shortly we’re gonna get to the forecast for twenty sixteen but paul service what’s what’s your take on donor advised funds i know you read that chronicle of philanthropy op ed that was critical i mean i don’t know you did but ninety nine percent likelihood of course you did okay um what’s your sense of donor advised funds eyes too much money parked in there was that a fair assessment of donor advised funds i don’t think it is um first of all we have money parked in every university endowment we have money parked in um in every charity that has an endowment and what people are doing with donor advised funds is complimenting there private foundations are like my wife and i do we park money there a little bit each year so it accumulates we make gifts from there but over the years we’re hoping to make a larger contribution to something that is very important to us and by being able to contribute each year more than we distribute from the donor advised funds we have a pool for a larger gift and i think uh that’s once after that’s very important for the wide range of people who have dahna advice funds and not just well hold uh secondly i think what’s good for the goose is good for the gander if we’re going to talk about donorsearch advice funds and it was correct doug was correct that the donor advised funds the fidelity report indicated he gave three point one billion dollars last year and if you look at the gates foundation it gives about two billion and it adds the one point but i am doing that it has to keep a way of from warren buffett each year that’s uh a three point five billion now that’s more concentrated more focus so does a little accomplish major changes across the world but in terms of sheer amounts of money this is rivaling the the the gates foundation okay doug white let’s start too you don’t know and doug also there was there’s a suggestion that donor advised funds should have ah requirement to give maybe it’s five percent the way private foundations do now from each donor advice fundez right doug what’s your what’s your sense of dahna advice funds and what do you think about putting ah mandatory donation requirement doug well if you do that you’ll be way behind the curve because the national philanthropic trust which gathers up data on all sorts of aspects of the donor advised found world reports that the average that on average sixteen or seventeen percent per year is being given out from metoo azan average as an average you know anybody who’s showing up saying that we should have a minimum will probably say five percent because that’s what the foundation minimum is s so i’m thinking okay you can make it a five percent minimum but that’s not going to really affect the real world and going after a minimum in this particular case is really the wrong argument i think we’re really wasting a lot of time on this that chronicle editorial was something i do disagree with i think there could be some mohr education on the part of donors and charities on how to distribute and what kind of organization should be getting that kind of a money that kind of broader education is a lot more important to me than having some arbitrary payout rule that’s going to be a lot less than what’s going on in reality anyway there is some there is one more thing though about that average that can aggregate average yeah but if you were to average things and take what percentage i give away so if you did the average for each fund-raising and that’s one of the arguments that made made in congressional hearings and so on right on the other side of that argument it isn’t sixteen percent that’s the aggregate average because there’s a lot of people giving away a larger percentage of what they hold but if you did an average of each fund we would be down toward six five percent okay hold on hold on paul let’s hear from doug and i totally agree with that but i think that that that point and i’m going to buy into a one hundred percent it’s still not an argument they have a mandatory minimum okay the number one but also i don’t know e i don’t know if you meant to say this paul a moment ago but you just gave a very good reason for not distributing you’re actually putting away latto smaller chunks every year based on your ability to do that so that you can aggregate it to a point at some time in the future when you can actually do something very major with that that’s not a bad argument yes thank you i’m confused about the five percent versus sixteen or seventeen doug can you sixteen years seventeen was what the national philanthropic trust that is the aggregate outlaw outlay of donor advised funds last year okay that paul’s pointing out that if you do it fundez fun there are a lot of funds that don’t come up to that number they maybe five or six percent which means a lot of them are thirty or forty percent you know it’s going to be that way so so all i’m saying is that the argument the conversation is a total waste in my view of having a minimum that’s the bottom line for me all right let’s move on gents we’re going to move to the twenty sixteen forecast which is as robb pointed out unique for the atlas of giving rob return it to you what can we expect for twenty sixteen not as good as twenty fifteen we are now keep in mind before i say what i’m about to say that we update our forecast based on based on economic demographic and event factors as they occur each month each month so this is the initial forecast this was the initial forecast for twelve months the calendar year for two thousand sixteen and our first forecast is that charitable giving will grow but only at a rate of two point six percent two point six versus the what we have four point two percent from fourteen to fifteen did you report it four point six four point six thank you okay also a two percent difference all right so let me ask you this back-up how much did your twenty fifteen forecast in january of last year differ from what we’re now reporting completely different completely completely and what well i imagine politics was a part of that the political campaign were the presidential what else what else stock market doc mark hood was hugh couldn’t predict what was going to start with anything else those those were two main okay doesn’t mean they’re not like to say well aside from the stock market in the presidential election what else you got way we’re not we were expecting we’re expecting a stock market correction earlier in the year were expecting it to be fairly sizeable ah janet yellen was also talking about raising interest rates in the first quarter of the year and she put that off until the last quarter of the year so that that made a difference to okay but way were updating the forecast every month so it kept getting it kept getting better okay the presidential election cycle yes year how does that factor in well we’ve talked about disposable income and when you talk about disposable income you talk about individuals you might be talking about corporations but if money is being channelled to political campaigns out of disposable income from individuals and corporations there is less for charity and so one of the things i’ll tell the listeners now is that we are actually working on a study going back several decades toe look at the impact of political campaigns on charitable giving from the past and we intend to release that in june okay all right so for the time being we would expect is it is simple as you know tend to be well simple minded is it as simple as we’ll see a decline in like august september and october of twenty sixteen because of the imminence of the election in november the timing i think is going to be spread mostly throughout the year okay more even okay okay um let’s see we just got about two minutes before a break uh doug you want toe not before we’re done but for a break doug you want to weigh in on ah presidential factor president presidential election is a factor of charitable giving i totally agree i think a lot of people were talking about it disposable income it could go one place or another and this has been such a an excited presidential cycle that a lot of money has gone there when we talk about that though my my mind is more on the dark money and the way c four’s air being used wrongly in my view and so a lot of money is being siphoned through our sector just not through the five o n c three portion of our sector and that is to me a very big concern all right let’s go out for a break early sam and when we come back we’re gonna continue this conversation focusing on the twenty sixteen forecast will bring paul service back in stay with us like what you’re hearing a non-profit radio tony’s got more on youtube you’ll find clips from stand up comedy tv spots and exclusive interviews catch guests like seth gordon craig newmark the founder of craigslist marquis of eco enterprises charles best from donors choose dot org’s aria finger do something that worked and naomi levine from new york universities heimans center on philantech tony tweets to he finds the best content from the most knowledgeable interesting people in and around non-profits to share on his stream if you have valuable info he wants to re tweet you during the show you can join the conversation on twitter using hashtag non-profit radio twitter is an easy way to reach tony he’s at tony martignetti narasimhan t i g e n e t t i remember there’s a g before the end he hosts a podcast for the chronicle of philanthropy fund-raising fundamentals is a short monthly show devoted to getting over your fund-raising hartals just like non-profit radio toni talks to leading thinkers experts and cool people with great ideas as one fan said tony picks their brains and i don’t have to leave my office fund-raising fundamentals was recently dubbed the most helpful non-profit podcast you have ever heard you can also join the conversation on facebook where you can ask questions before or after the show the guests were there too get insider show alerts by email tony tells you who’s on each week and always includes link so that you can contact guest directly to sign up visit the facebook page for tony martignetti dot com i’m dana ostomel ceo of deposit a gift and you’re listening to tony martignetti non-profit radio big non-profit ideas for the other ninety five percent full service let’s bring you back in what’s your thoughts on twenty sixteen i think that one of the major factors that is missed in a lot of this is the growth in wealth that is independent of the staff markets the privately held firms and the amount of money that is generated by privately help firms and the contributions that are made by the people that owned firms when you get over one hundred million according to federal reserve data that we analyze fifty percent of the equity that is owned of the assets that are owned by of their net worth they’re owned by the upper end isn’t a privately held this and so the stock market is one important factor and we know that there are just dozens and dozens of variables that rob puts into the model but i think that we’re goingto have a sustained reliability and it’s going to be higher than the two point six percent and i um uh the hot medicine that i have your key recently came out with the projection probably teo reflect what uh doug what rob is doing uh they came out with the projection of about six percent growth in the coming year that’s a problem we’ll find the center and philanthropy and so my view is that we’re going to find sustained giving at a higher rate and it’s because a large proportion of the e-giving is accomplished by the very very very a small number of hyo households five hundred thousand six hundred thousand seventy thousand and the best depending on whether you do it either income or by their wealth that group gives between twenty and twenty eight percent of all the charitable giving that’s less about one that’s about a half a percent of the households in the nation and so i expect that that wealth is going to continue to grow now it does reflect the economy what happens to these private businesses but the amount of money that’s being accumulated at the very top is something that we have to consider as independent of the stock market paul that wealth that you’re concerned about in the privately held companies does that end up typically being inherited wealth to the next generation or what happens to all that wealth well it’s that’s the debate isn’t at the giving pledge is that they’re going to give at least fifty t percent and lifetime or to their state of their these air people in a billion and more yeah ah ah and some of them are ten twenty and thirty billion dollars they’re going to get out of that are more to charity now that’s in the offing and as a group ages we’re going to find some of that coming through the states if they don’t give it through their foundation to their foundation to a foundation and through a foundation so i think that we’re going to find this continuing to be a major factor in full after pete philantech pretty is very very very top heavy and so i expect there to be ah greater than two places percent but i give the atlas great credit last year we talked about a five percent drop at this point and it corrected it as the year went on when it got more information so i think the yearly prediction is less valuable than what we’re going to find out each month along the way more accurately okay excellent um rob let’s let’s go back to you for twenty sixteen what do you see from the the sources of giving so you’re looking at corporate foundation bequest and individual individual being by far the largest do you see that staying mostly stable from twenty fifteen to twenty sixteen well one of the disturbing fax is that corporate giving has continued to decline as a percentage of all giving oh and that that that’s one of the trans little continue in two thousand sixteen what have you been seeing over the past couple of years so what percentage is that we’re seeing in the decline well from five percent to three point three percent growth that i think significant growing without a smaller rate is that running a smaller right ok the other the other thing is that and this is the elephant in the room is church giving ah fewer and fewer americans are associating themselves with churches their congregations of any kind and if you look back two e-giving yusa reports from fifteen years ago church giving amounted to fifty percent of of all gifts now we’re down to thirty three percent yeah it’s been you and i have been doing this together for two years it’s been this is our third year sorry it’s been declining like a one percent a year did you see the did you see it declined from twenty fourteen to twenty fifteen yes you did okay is like a percent percent a year so slowly declining what paul did you want to weigh in on that but what can i say what that was just at the upper end doesn’t he have a great proportion of their e-giving two churches and the more top heavy wealth gets the greater total proportion of e-giving churches is going to be down just as a matter of statistics but also it’s absolutely correct that church participation is down and what the relative amounts that are going to education and health are skyrocketing and that’s in the atlas on dh er that’s in a report from the center for the study of education on kaplan’s group that showed that e-giving as is actually covers two years because twenty fourteen some of the reports are are in a fiscal year ending in june or an obvious so it’s really covering twenty fourteen and twenty fifteen and that’s dramatically up this year thie amount that’s going to higher education rob good that represents the upper e-giving and so they’re proportion of the total amount of giving two churches has to go down when you have not only congregational participation slipping but also so much more of the total amount of money going from high end groups they get the education and other cars and one of those other causes this is a very interest this has been a very interesting thing to watch is that in twenty fifteen the greatest growth and giving occurred in the environmental sector which is the smallest sector has been the smallest sector of giving for a very very long time so the proportion of the pie is being redistributed less to religion mohr to environment human services and education as paul pointed out those those things are it’s it’s you know we like to say we’re we’ve got our finger on the pulse of american philanthropy and nothing nothing is going to know nothing’s in stone everything can change at any time and that’s why we we produce a monthly report we would love to produce one that’s weekly but we haven’t figured out how to do that yet dug anything you want to add about twenty sixteen well i’m sitting here in fascination that paul service is thinking that rob mitchell is being conservative because we’re talking about how how far out on the limb thie alice of giving is and yet ah hearing rob described how that’s put together is very valid to me and i think we oughta have this debate again that you were describing happened two or three years ago because i’m like i think it’s important that we get to the bottom of the fish off yeah yeah and then paul’s bring in some factors here that he’s saying that maybe the alice hasn’t yet considered the behavioral aspects of it and what he says makes a lot of sense to me i will say i’m going to wrap it up gents we did invite the atlas and giving us a to another face off it was several months ago wasn’t it wasn’t for this show today but several months ago and didn’t hear back from giving us a robbers willing but giving us a way also didn’t come through you also extended an invitation to blackbaud for the blackbaud index toe do another face often we never heard about it yeah it was very generous of me all right and they didn’t respond either we have to leave it there paul service doug white and rob mitchell thank you so much gentlemen thank you turned in a great flood here thank you thank you paul next week gene takagi returns he’s our legal contributor and the principle of neo the non-profit and exempt organizations law group if you missed any part of today’s show please find it on tony martignetti dot com where in the world else would you go i’m still not sure about that for twenty sixteen taking my time to to make that decision we’re sponsored by pursuing online tools for small and midsize non-profits data driven and technology enabled pursuant dot com and by crowdster online and mobile fund-raising software for non-profits now with apple pay mobile donation feature crowdster dot com our creative producer is claire meyer off sam liebowitz is the line producer gavin doll is our am and fm outreach director shows social media is by dina russell and our music is by scott stein thank you for that scotty be with me next week for non-profit radio big non-profit ideas for the other ninety five percent go out and be great what’s not to love about non-profit 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Nonprofit Radio for January 30, 2015: 2014 Fundraising Report & 2015 Forecast

Big Nonprofit Ideas for the Other 95%

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Rob Mitchell, Doug White & Paul Schervish2014 Fundraising Report & 2015 Forecast

The Atlas of Giving released its fundraising review for last year and initial forecast for this year. How’d we do in 2014? Plus, you need to hear the 2015 prognosis. Atlas CEO Rob Mitchell reveals the numbers. Professors Doug White and Paul Schervish opine.


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Hello and welcome to tony martignetti non-profit radio. Big non-profit ideas for the other ninety five percent. I’m your aptly named host. We’ve got a new affiliate, very excited. Km you z one hundred point seven fm in salem and keizer, oregon non-profit radio for the capital, and kaiser and other parts of the mid willamette valley. Welcome km, jozy very, very glad to have you with us. I got a listener of the week, bobby de l’art, the auctioneer in tempe, arizona. You’ve got to hear this, wait. That’s all this is for the weak bobby ellard auctioneer he heard the show on auctions and did a valuable video with more ideas. He blogged the show and he sent me a really thoughtful personal video, which was not that personal is g g rated personal video, and he loves non-profit radio he’s at bobby d auctions and bobby de auctions dot com i’ll send you a video of the non-profit radio library you pick a book and i’ll send it to you. Congratulations, bobby de l’art, our listener of the week i’m glad you’re with me i’d come down with a bad case of order, correa if i rubbed up against the idea that you missed today’s show twenty fourteen fund-raising review and twenty fifteen forecast. Yeah, lots of giving released its fund-raising review for last year and initial forecast for this year. How’d we do in twenty fourteen plus, you need to hear the twenty fifteen prognosis atlas ceo rob mitchell reveals the numbers professor’s doug white and paul schervish opine on tony’s take two your best bequest prospects responsive today by fund-raising from the heart a workshop with lin twist right before valentine’s day in new york city i’m very pleased that the twenty fourteen review and twenty fifteen forecast bye atlas of giving bring rob mitchell back to the show. He’s, the ceo of the atlas he’s at philanthropy man or philantech roman, if you prefer. I liked it that way. On twitter and also at atlas of giving, you’ll find them at atlas of giving dot com rob mitchell, ceo welcome back to the show, tony it’s, great to be with you. Pleasure what let’s let’s acquaint listeners before we get to the headline let’s acquaint listeners with what this atlas is all about. Sure, the alice of giving at the alice of giving we measure the velocity and trajectory of charitable giving in the united states. We do it monthly we so each month we produce a free monthly report that shows e-giving by nine sectors health, education, religion, the arts, environment, etcetera, four sources, individuals, foundations, corporations and bequest, and then by all fifty states in the district of columbia. And what are these numbers based on what we what we did, tony, was we originally back in two thousand ten, we took forty two years worth of published e-giving data and the hypothesis wass that giving in the united states it correlates it’s, a specific economic demographic and event factors. So we hired a team of twenty five phd level analysts and statisticians toe look at this, they examined more than seventy five different factors, and they were able to come back and identify indeed what factors our have strong correlation with charitable giving in the united states. And then we were able to build our first algorithm, which corresponds with the national giving total based on those factors and the strength of the correlation and each of those things. So it would include things like unemployment, interest rates, values of the stock market, etcetera and each of those each of those things that correlates to charitable giving has a relative strength. And so those strengths were built into the algorithm, and what we were able to come up with was an algorithm when matched up with those forty two years of previously published annual giving numbers matched at a rate of over ninety eight percent. So it’s it’s a fantastic thing. Since then, we’ve developed six sixty for additional algorithms, one for each of the nine sectors one free to the four sources and one for each of fifty states plus dc. And interestingly, the factors that are involved let’s say an individual giving are different than the factors that are involved in corporate giving or foundation giving. Similarly, how organizations raised money and who they raised it from makes a difference, and so sectors are different. The factors that affect those sectors are different, so the factors that affect gifts toe education are different from the from the factors that affect gifts to churches as an example. Okay, and we’re going toe. Hopefully we’ll have some time to talk about different macro economic factors with with our two professors that will join us shortly. Um okay, let’s. Um, thank you for explaining what? What the basis of the the review for twenty fourteen and the beginning, of course. Get to the twenty fifteen forecast. Thanks for explaining what, what they’re from and how they’re derived. Um, let’s, get to the headline. What is, uh what? What is the e-giving number for twenty fourteen? Twenty. Fourteen was a great year for giving tony ah us charitable giving in our estimate top four hundred and fifty billion. In fact, the total was four hundred fifty six point seven. Three billion, and that is a nine point, three percent increase over two thousand thirteen, and this this extraordinary number was fueled by a verona by several favorable economic factors that dr e-giving yeah, okay, now we’re not we will be able to go into all the factors, but i know you have no employment and the stock market had to have been influential. The stock market has been great since the recession, and unfortunately, the value of the stock market for some sectors is very good, while in other sectors not so good. So organizations like churches, like large national charities that rely on lots of small gifts from lots of donors, those organizations air greatly impacted by high unemployment and those organizations have not fared as well since since the recession, as organizations like colleges and universities where donors aaron campaign are the organization’s air in campaign mode or they’re they’re receiving gifts that air based in stock real estate and ask kinds of e-giving those organizations, because of the stock market increases over the last few years, have done quite well. Okay, let’s, let’s look att donor advised funds to had how as a source of giving, how influential were they this year or last year? Well, donorsearch vice funds since the recession have been, i would say, the biggest story and charitable giving in the united states donorsearch advised funds have done extremely well, and that is that’s in large measure due to the ramp up in stock values. In two thousand fourteen donorsearch advised funds accounted for twenty nine point four billion and giving, and if you think about the total e-giving over four hundred fifty billion donorsearch advised funds, now this is gifts going into the funds and grants coming out of the funds to other organizations, but donorsearch advised funds accounted for six point, four percent of all giving in the u s in two thousand fourteen. Okay. Oh, but that’s that you’re counting giving into funds and also out from funds. But to give the money into the funds doesn’t necessarily make it to a charity in twenty fourteen. No. But you remember a donor advised funds like a fidelity of vanguard charitable are schwab charitable those air five? Oh, one c three organizations on their own. Okay, okay, not were we not your typical? Charity okay, let’s, go out for a break a little early, and of course, when we come back, rob and i are going to keep talking about twenty fourteen, twenty fifteen forecast, and we’ll be joined by professors doug white and paul schervish. Stay with us, you’re tuned to non-profit radio. Tony martignetti also hosts a podcast for the chronicle of philanthropy fund-raising fundamentals is a quick ten minute burst of fund-raising insights published once a month. Tony’s guests are expert in crowdfunding, mobile giving event fund-raising direct mail and donor cultivation. Really, all the fund-raising issues that make you wonder, am i doing this right? Is there a better way there is? Find the fund-raising fundamentals archive it. Tony martignetti dot com that’s marketmesuite n e t t i remember there’s, a g before the end, thousands of listeners have subscribed on itunes. You can also learn maura, the chronicle website philanthropy dot com fund-raising fundamentals the better way. Welcome back to big non-profit ideas for the other ninety five percent. I’m going to send podcast pleasantries first for everybody listens in the time shift. Very, very grateful to have you over ten thousand of you. Thank you so much. Live listener love. Oh, my goodness, we’re exploding. This is a very, very popular, very, very popular live show. San jose, california. Shakopee, minnesota. Korbel, indiana live. Listen. Love maspeth, new york land o’lakes, florida, dallas, texas campbell, california, atlanta, georgia live listener love to each of you and there’s more. We have a lot of live. Listen, love. Okay. Um, let’s. Bring in let’s. Bring on our one of our professors. Pull schervish he’s, the professor of sociology and director of the center on wealth and philanthropy at boston college he’s been selected five times to the non-profit times, power and influence top fifty. We got lots of somebody else just a couple weeks ago, henry tim’s lots of power and influence on non-profit radio with john havens. Professor of service co authored the nineteen, ninety eight report millionaires and the millennium, which predicted the now well known forty one billion trillion trillion dollar transfer of wealth and got enormous popular press. His next book will be aristotle’s legacy, the moral biography of wealth and the new physics of philanthropy. Paul service. Welcome to non-profit radio. Pompel e-giving this great intro when he’s not there. Let’s, go to doug white. He’s, also a professor. I am here. I am here. Okay. That’s. Okay. You muted your phone. What kind of inauspicious entrances? That’s a non-profit radio let’s. Do it again. Yeah, i hardly ever muted and it’s hard to mute me. You’re a professor it’s, not it’s. Understood. Welcome to non-profit radio. Thank you very much. Pleasure to have you do it. You, tony. Thank you. Hello, doug. And rob. Hello to you too, it’s. Good to talk about football now we all know each other. Hello, paul. What stood out for you in the twenty fourteen fund-raising numbers from atlas of giving hyre the question i have for rob because and what stuck out is nothing new. But is a question that he’s going to be asked him? It needs to explained because back-up our institute also tends to get hyre increases in giving, eh, dahna e-giving yusa does. But i wanted to ask robin what struck me. Rob was, um no. Why is that one hundred billion dollars larger? Not only a larger trend, but a hundred billion dollars larger. Uh then e-giving usa. And where is that money coming from? I know you asked me a question, and i’m not supposed to answer a question with a question, but rob, i i think that would be informative where’s that money coming from and why is that one hundred billion more, according to what we’re finding with the atlas? Sure, it’s a great question, paul, and the the answer, but in large measure is due to a couple of things. One is that to build the alice of giving to build the out now sixty five algorithms that we have, at least initially, we relied on forty two years of published data from e-giving yusa, and what we relied it relied on it for was to determine what factors actually correlate. Teo e-giving and once we determine those factors we no longer needed e-giving use a data, and so the the atlas numbers took on a life of their own, so to speak, right there, some things that that giving yusa, uh there, there, in my opinion, there’s, some there’s, some things that that need to be asked of giving yusa and our current giving environment that i don’t think that they’re keeping up. With one is donor advised funds, they make no estimate on donor advised funds, and we’re estimating that in two thousand fourteen dahna advised funds were over six percent of the giving total. The other thing is that e-giving yusa is relying on tax data that is more than two years old to make a determination about the year that they’re measuring. And as you well know, the year two thousand nine in terms of tax data very, very different from the year two thousand eleven. So, uh, tryingto trying to use tax data from two years ago to make a determination about about the year you’re measuring isa bit like reading a newspaper from this day two years ago and trying to determine what happened in the news today. Another thing that another weakness is that there is no and giving us a will say in fact they did on this show last year, they said they don’t use surveys dahna they use tax data. Unfortunately for churches, churches are not required to file any tax data, and if they’re not using surveys, we’re talking about a third of the charitable giving total, and i’m not sure where they’re extrapolating their number from but if it isn’t from a survey, it can’t be from tax data and that’s that is a huge difference. That’s uh, that’s a third of the charitable giving economy right there. All right? Uh, yeah, i think it is important to look at these trends and donor invites fundez they’re huge, and i think the listeners should know that they banned foundations that don’t give directly to charity. That was tony’s initial question when people give to a foundation that’s when the charitable gift this registered it’s a charitable gift when a foundation that gives it to a active on direct line charity, it doesn’t show up in these statistics again, same with donor advice once when you give to the donor advice once the atlas, other groups have nicer charitable giving count that it’s the gift they don’t double count the gift to what’s going on out in the world, but the growths and donor advice hyre and foundations our huge over the last ten years, and they project to be continued to be huge, as people, um, give while living can ah lot of foundation formation or a lot of the money that went into force that goes into from patients is actually showing up there earlier. Our research shows instead of waiting for the final estate when of bequests to charitable bequests creates or leads to the largest amount of money for a foundation. No, the debate that’s going on in your listeners are probably well aware of this is are these donorsearch vice funds and foundations housing too much money that he oughta be passing forward more quickly and in larger amounts to today’s needs. And that’s also been debated in congress. Yeah, you have. Yeah. I want to bring in. I want to bring in that one of the points that i think is very important as we see foundation e-giving e-giving two foundations e-giving two donor advised funds increasing as part of this package of growth in philanthropy. Go ahead. Yeah, i want to thank you. I know this guy’s a professor. Go ahead, but the anarchist anarchist is what he is. You have anarchist after your name? No. Just only know only phd. All right, i want to bring doug white. Is that okay? If we bring doug white and paul right now? I’m kidding with you all. Right. Okay. Okay. Thank you. Know, yeah. You should know. I’m joking with you while you have been on before, so maybe you don’t know. That’s. Good. Okay. Doug white, director of the master of science in fund-raising management program at columbia university. He’s been responsible for efforts that have raised more than eight hundred million dollars and he’s written four books. His latest is abusing donorsearch tent. The robertson family’s epic lawsuit against princeton university. We talked about that on non-profit radio last may. Dog. Right. Welcome back to the show in the studio. Thank you for having me, it’s. Good to be here. And it’s. Good to see you again. And it’s. Really good to be on with these two guests that you have. Not really a lot of fun. I agree. Cold. I’m glad you shared that. What? What is significant for you in the twenty fourteen fund-raising review? Well, i was glad to hear the explanation of what the difference is between giving yusa and the atlas. I still would like to know more about how that comes about because it is such a huge amount that and i know that everyone down dallas is going. To have to talk about this a lot, but it is such a huge amount that it almost challenges indiana university to its own methodology, and i think you were saying that earlier, rob and so i’m wondering if at some point there’s going to be some sort of ah, revelation is tow the specifics about how this is really done. For the record, i’ve always been wondering about tthe e-giving yusa numbers anyway, i think that did the d a f the dafs money going in, and also the church estimates are really suspect, and so i’m glad to see other factors being brought into that algorithm, and if it really does mean that we’re raising more than about one hundred billion dollars more per year than we’re being told otherwise. That’s good what i also note is and i think you also mentioned this earlier up, is that education e-giving is increasing, and that would be one of the areas where the stock market is helping. There was a report out this past week about the top ten universities in the united states and how they have increased their giving by about twenty percent has a portion of all of the university e-giving so what that tells me is that more and more wealthy donors are giving to to the larger universities, the wealthy universities, the wealthy organizations and my question or my concern it’s not a question for now, although i’d love to hear anybody’s response to this, but my concern is that a cz we as i look at our program and we’re educating people to go out into the non-profit world to become leaders and fund-raising and leaders and non-profits i’m wondering if we’re seeing a forgive the phrase a de democratization of fund-raising in other words, we usedto work on ah, system, where eighty percent of the people gave twenty percent of the money and vice versa, and so we would spend more and more of our time on that twenty percent of the larger donors i’m afraid that number is closer to ninety or even hyre and ten percent, in other words, what i’m worried about is that as we look for these larger and larger and larger gifts from seoul individuals, are we starting to lose the idea that philanthropy is for everyone and the e-giving report in the atlas strikes me. As being a continuation of that issue, i don’t know that that’s a bad thing in terms of the money going to the charity, i think that’s that’s a separate question what i do wonder about is how charities are reaching a sze yu would say on your show here, tony, the other ninety five percent and how do we make them feel included? And our philanthropic objectives so you’re concerned about either call it a deed, democratization or concentration on the on the flip side of e-giving yeah, i would actually prefer de democratization because i think it is a negative trend, okay, i’ll take i’ll take a bit of a stab at that, doug, i think they’re and this also gets to the question of why the big difference in giving us an estimate and ours, and that is one of the things that’s happened over the past twelve years, that’s the number of non-profits in the u s has grown fifty percent and that that is a huge number because those non-profits regardless of whether they’re you know what their expenses are, they’re raising money and that that is a that’s, a gigantic number of new non-profits entering that, the fund-raising marketplace and then technology has been super fantastic. The effectiveness and efficiency of fund-raising techniques is increasing every day, and to your point about the democratization of charitable giving. There are some great signs of things like bonem well, crowdfunding is one example prize for philanthropy is another example where, where grassroots donors are getting involved online to make significant contributions, and i don’t mean by that major gifts, but make contributions to charitable organizations at the grassroots level. Well, that’s a good point, and i just wanted to ask you, when you say the fifty percent number and no it’s for five months say three’s, did you mean all five a onesie? Threes you’re talking about public charities within that i am talking about five o one c three specifically, ok, so that would include the foundations as well as because there’s been a growth and family foundations to over the years that makes sense. And and i i’m sorry. Good look like talking about okay top heaviness pompel a terrible giving, depending on whether you do it according to federal reserve numbers, by income or by wealth is very topic just to give you an idea back-up about four hundred eighty six thousand household of a million that they have a million dollars in income each year. Bonem they make eleven percent. Hyre excuse me, twenty one percent of all the charitable giving. And when you get to five hundred thousand or more and income for a household, not for individuals, you get thirty percent of the charitable giving. So it’s, very top eddie. But let’s say ninety five percent of the giving is done by households under two thousand two hundred thousand dollars just because of that numbers to those people. So while there is this question of democratization of charitable giving, ninety five percent of terrible giving is still done by households under two hundred thousand and income. Now, if you want to go to back-up one hundred twenty five alison, then it’s, about ninety percent is given by people under one hundred twenty five thousand. So a lot of still going on it’s going on in the church’s, everybody would say that’s, where a large proportion of the church money comes from. But it’s important to understand that there is a vibrant, charitable life that is lower than that, and it is a risk. I think we have to be very careful that we allow people, and this is one of my cases were donorsearch advice, so that the upper affluent can’t put money aside over a period of time to make larger contributions and concentrate on impact for an organisation for which that will make a larger difference than simply a five hundred dollar gift for one hundred dollars. Give teacher paul, we have to. We have to take a break. We’re going to come back. We’ll continue the conversation. Of course, we’ll get to the twenty fifteen forecast. Also. Well, it, uh, doug white, think about what paul just said, and we’ll return to the doug white and paul schervish non-profit radio very shortly. Stay with us. Uh, thank you. We don’t go away for break. I keep talking. Um, fund-raising fund-raising from the heart. It is a workshop in new york city, coming up on february twelfth and thirteenth, right before valentine’s day, lin twist. She used to head fund-raising at the hunger project for twenty years. Her book is the soul of money, and now she coaches and trains fundraisers around the world and she’s doing the teaching at fund-raising from the heart. There’s quite a bit. To learn from her. You can get more information and register at t h p dot or ge slash f, f, th that’s, foxtrot, foxtrot, tango, hotel, lin twist and fund-raising from the heart. Tony steak to my video this week is your best bequest prospects. There are two very simple criteria for identifying the best potential donors for gift by will and ah, i walk you through them by candlelight it’s a candlelight video, not a candlelight vigil, candlelight video and you’ll find that at tony martignetti dot com and that is tony’s take two for friday, thirtieth of january fourth show of twenty fifteen doug, wait, you, uh you wanna respond? Teo paul’s ah, response about your your concern about de democratization? Well, i’m thinking of a more from the perspective of the alumni or the development office, and i think that paul’s, right? In fact, i am sure that the numbers bear out because i’ve seen those as well, that there is a very vibrant e-giving culture going on in the lower economic levels. In fact, the poorest people in the united states tend to give more of their income than the richest people do. S o in terms of people being associated or attracted to charity that’s not my concern so much, i think we’ll always have people who will be i’m thinking of it more from the other direction. From the development office and why we need to continue to pay attention to those smaller donors and not pay all of our attention, although certainly a lot of it is deserved for the larger donors. So, paul, i take your point, and i appreciate your putting it into perspective, i really do. And so i just clarify what i was thinking about from from the fund-raising perspective, not so much the fund, the donor result where the fund-raising result perspective, i’d like to take off my atlas hat and put on my practitioner hat as a fund-raising practitioner for more than thirty years, and doug’s point is a great one it’s about type line it’s the small gifts and small givers are very, very important to the pipeline because the twenty six year old individual who’s giving you, uh, ten or twenty five or fifty dollars, a year now could very easily be the next richard branson in a few years. And you’ve got to keep the pipeline stuffed so that the major gift opportunities and planned giving opportunities come up later. Now, of course, not everybody becomes richard branson, but assed people as people grow and mature and their economic conditions change it’s it is imperative for organizations to keep acquiring new donors at all age levels and and at all income levels as they go forward, because those are your prospects for the future. And, as i say, mostly major gifts and planned gifts or campaign gifts in the future, rob i’d like to i’d like to focus a lot more on the on the review before we get to the twenty fifteen forecast. Can you just run us through a couple of the sectors? How religion, education, environment does have some of those sectors fared in twenty fourteen? Sure, the sectors that did the best tony are those sectors that rely on people who are giving out out of assets rather than out of income or both. And so the the sectors that did particularly well in two thousand fourteen worthy human needs disaster services sector was up twelve point seven percent the environmental sector, which is still a very small sector of the e-giving pie, but that was up eleven point eight percent, and gifts to education were up eleven point five percent. On the downside, though nothing no sector lost ground in two thousand. Fourteen religion or gifts to churches is on ly growing at half the rate of gifts to things like education and the environment, and that the principal reason for that as fewer and fewer americans heir identifying themselves as church members and participating regularly in church activities didn’t know them it’s more of a demographic issue than it is a financial issue. So so religion didn’t lose any market share from twenty thirteen to twenty fourteen, we have religion losing one percent of market share twenty thirteen, twenty four and as i recall that there was also twenty twelve to twenty thirteen yes reported the same thing this time last year, okay, yeah, and, you know, the double whammy for church e-giving also was that when you wrote that in the environment that we’ve been in for the last few years with high unemployment, churches rely on lots of those small gifts from individuals, and when individuals fear becoming unemployed, they are unemployed are only recently employed reemployed they don’t give and that that is a that is a that’s been troubling part of church, giving a troubling part of church e-giving reality for the last couple of years, doug white that does that sound accurate to you? It sounds totally accurate. In fact, the trend is even more dramatic when you look at it. Over the last thirty years, there was a time when church giving constituted about fifty percent of that more than fifty. When was that back in the nineteen eighties, see that’s what is a result of the growing level of wealth and the e-giving areas that wealth holders tend to give to they don’t give the same proportion to their churches because they’re in churches with people like themselves. Once their churches built, they’re not making large contributions to their congregation. And so what duck pointed out earlier about education being more affected by the stock market and growth in the stock market is also a proxy war wealth holders making those large gifts to education bonem and i think that i would agree with that, but rob would agree with it. And, doug, i have to go back on one thing because we won our first research award on showing that the lower income groups do not give a greater proportion of their income than hyre income groups, that is a myth that was recently spread again by the false study in the chronicle of philanthropy. How america gives yes, yes, and when the federal reserve started asking about wealth and income, you’re able to show that at the low end what’s going on is that people are who are giving larger amounts to charity. Our retirees go to church and are giving from their wealth, and so when you look at percentage of income, you could have very low income people making continued substantial gifts, especially to religion. And so behind those numbers is the problem of how you have a very well income denominator and a large charitable gift, and you really don’t have a growth. Well, people slash little income people at that end, boosting that percentage so that’s important to realize that once you conceive of people’s, wealth and income and age at that lower end, the lower and does not give a greater percentage of income except for retirees, they’re well. So the study in the chronicle was faulty in the sense that it didn’t incorporate the study was a a master shame, and we got to do a program on it. They missed twenty percent of all the e-giving by the upper end by the methods that they used that we warned him against you, there was another story. Yeah, and that is another story, it’s a great one, but just one last comment on that there was a great book about twenty five or thirty years ago called wealthy and wise and for the first time, and i forget the author right now, but he did a fabulous job, yes, thank you, claude rosenberg and he did a fabulous job of explaining what you just said in a moment a moment ago and it’s something we need to take into account when we look at e-giving more than we do, we’re going to move to the twenty fifteen forecast from the atlas. Rob, why don’t you acquaint us with what you what you’re seeing for the future? Well, the first i’ll give a caveat and that is that what i’m about, what i’m about to give you as the initial twelve month forecast for twenty fifteen, i will change it always does that’s why we update each month, but our initial forecast for twenty fifteen is particularly bleak. The forecast suggests that giving could drop more than three percent in two thousand fifteen to four hundred forty two billion dollars. You know the projected decrease is largely function of unexpected correction in the stock market and we’ve seen some way have we have not yet we’re not in a bear market we haven’t experienced to correction, but we are seeing some weaknesses in the current bull market on expected increase in interest rates in the second half of twenty fifteen when interest rates go up, it puts pressure on discretionary income on the part of all donors, be the individuals, corporations, foundations, et cetera. Um, the eurozone trouble in weakening economies in germany, france and italy, particularly forty percent of all publicly traded stock company sales are to the eurozone in a weak eurozone economy is going to negatively affect the ability of u s corporations to make charitable gifts at the level they’ve been making them and then the unemployment has improved and is improving. There’s a problem of compensation compensation levels today for people who are in employed have not yet returned to pre recession levels and there are a huge number of americans who are still under employed. That’s that’s a problem as is rising competition, particularly from asia, for us companies, so i i would i would hope though this forecast this initial forecast is bleak our for our initial forecast for twenty fortin was not not so strong as what we ended up experiencing and that’s good news so we can hope for that again this year and perhaps the stock market won’t correct that’ll make a huge difference and some of these other things can be resolved and we’ll have another great e-giving year in twenty fifteen but right now it is it doesn’t look good for twenty fifteen help me explain something, rob, how is it that unemployment helped the twenty fourteen numbers because it had risen, but in twenty fifteen that increased employment is going to hurt the terms of what you think so far? I understand compensation is low, but compensation was low in twenty fourteen also, and we had under employment in twenty fourteen. So how does it cut upward in twenty fourteen and downward in twenty fifteen? The gains that were made in in employment in twenty fourteen were dramatic, and they won’t be so dramatic in twenty fifteen, and so the under compensation problem will be more will be more pronounced in twenty fifteen than it was in twenty fourteen. Let me just say about unemployment again, when people fear becoming unemployed or they’re unemployed, or they’re just recently re employed, they don’t give, typically and, uh, but when someone become what we have, what we’ve been able to observe is that when someone becomes reemployed after a period of unemployment, it takes a cz many as two years before they resume their previous levels of giving before they became unemployed. All right, we’re going to ponder that for a couple minutes. We have to do have to go away. This time. We do stop talking this time, and we’ll come back and continue the conversation. Stay with us. 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Hi, this is claire meyerhoff from the plan giving agency. If you have big dreams but a small budget, you have a home at tony martignetti non-profit radio. In south korea, we have sole and an young listening on your haserot in the netherlands, we have new coupe, we have our bill, iraq and suruga. Shima, japan, konnichiwa, live listener love going to all those countries abroad. I’m sorry barcelona, spain and also turkey, but we can’t see which city you’re you’re masked in turkey, but we know you’re with us live, listener, love, bring it back to the u s quarters villa, georgia, atlanta, georgia. Lancaster, ohio. Lynchburg, virginia live listener loved to you also mass with new york. New bern, north carolina. Bethlehem, pennsylvania. St louis, missouri. Tyler, texas. Los angeles, california, honolulu and washington, d c it’s remarkable that’s a lot of live listeners. We usually get roughly half that live, but that podcast audience never forget the podcast pleasantries because they are critical for us as well. Pleasantries to those listening at other times. Paul service how does that twenty fifteen forecast strike you? I wouldn’t have you said it was bleak? I think that’s too strong a word i might have said. A challenge, you see, because what rob is talking about is twelve percent ship from a nine point something up to a three point something down, and i think that, yes, a huge crisis, but the variables at each site on ly, if they all accumulate, might we have the twelve percent ships that he’s talking about? I would have probably, uh, sighted all of the influences, he indicated. I would have sighted some positive ones. As well. But i might have talked about a chance that instead of a nine percent growth, we might be between a two and a five percent growth, given the same data. You mean to five percent growth from twenty thirteen to twenty fourteen? Yes. Yeah. Okay. Now, if we have the perfect storm dahna and bleak might be the right word. But we only have some clouds on the horizon and some insecurities. And we’re far out at sea, given everything from terrorism. And we do know that economic information and data and growth in the economy is hurt by insecurity and and worry and that we do have all right, let’s, bring if you ever look up the wall of worry about all the things that could go wrong for the economy that is listed a good number from but i think there’s some positive influences, and i think we may be too strong until we know more outwards. Okay, uh, i might have said, uh, challenging all right, rob mitchell. Paul service doesn’t see nine point three percent growth from twenty thirteen to fourteen. He says more like two to five percent. No, no, no. I see. That i don’t see it reversing in twenty fifteen. Okay. Percent. Okay. Okay. What could you could you, briefly, paul, police be brief. What are a couple of positive factors that you see for twenty fifteen? Well, it’s, what you hear on the news something’s cut both ways. One is will we have? We already incorporated the higher interest rates into bilich into the stock market and its expectation, have we found that the oil price reductions bonem are going to encourage consumer spending and standard of living united states? Are we going to find that even though we hear continuously about bob dahna wages and so on, total compensation has gone up when you put into the mix tensions and health care as part of a total compensation? That doesn’t mean people have the money to expend, but it doesn’t mean that they are the enforced to spend it all out of their pockets. Coming from companies lousy thie obama around buy-in assurance program has helped some people with their discretionary income in solo those air some positive things that i think may be up doug, right? Twenty fifteen doug white well, i tend to agree with both people. I know that rob said something, and paul is being a little bit more optimistic, and i think either way, it’s, good news and rob is also very clear about saying, look, this is just a snapshot, and so next month we’ll have more experience and we’ll have debt, better data for the predictions, and so we were kind of nurture that through the year and given both, even if it were to be a perfect storm, and we had a drop over the next year. I don’t think that’d be the end of the world. I mean, we still have a very, very strong philanthropic society, so three percent or four percent drop over what would be this this year, which was a huge increase, i think would not be the end of the world that we should stay on top of it. We should follow this and we should analyze it and dissected, but i’m not worried. Rob and doug just made this point, you know, you have the atlas will have monthly. Is that right? Monthly revisions, teo forecast we update we update the forecasts. First of all, we provide a free report updated each months and it’s usually comes out around the twenty fifth of the month. It’s it is e-giving it’s it’s an estimate of giving for the current giving year the calendar year um and it’s a look forward as much as twelve months and the further we go along and and we’re like any forecast, the the nearer we are a month to month r r our accuracy rate is nearly one hundred percent. The further out you get, the less accurate it becomes. But all of that being said, i think both paul and make some great points. I especially like calls comment about oil prices and the effect on americans at the pump it’s like giving everyone in america and including corporations, by the way, a tax cut and sew it frees up more discretionary income, and we can only hope that that will continue. So i think i appreciate the the advice that bleep maybe too big a word also like doug’s doug’s analysis that, hey, when you’re coming off a four hundred and fifty billion dollars e-giving record giving year, and to have even a modest decline is not the end to the world, i think that’s really important. And the last thing i’d say on this subject is that the importance of keeping up with the the forecast monthly i take you back to two thousand, won two thousand one was shaping up to be are really was shaping up to be a good giving here. And then the events of nine eleven occurred. And we know now that e-giving for naan. Disaster charities basically dried up for six months, so it had a huge impact on giving for the calendar year of two thousand won and also in effect on giving in two thousand two. So it was so that those are reasons why events can make a huge difference. And why we why we like to say we’re trying to keep our finger on the pulse of american philanthropy. We have to leave it there. Rob mitchell, ceo of atlas of giving. You’ll find them at atlas of giving dot com doug white, director for the master of science in fund-raising management program at columbia university. And pull schervish professor of sociology and director of the center on wealth and philanthropy at bc boston college gentlemen. Thank you all very much. Thank you. Thank you. Pleasure. Thanks, tony. Thanks, paul. Thanks, doug it’s. Been a great pleasure. Yes, next week, a show from the archive and a rich archive it is today is our two hundred twenty fifth show, but doing this since july two thousand ten once a week. If you got a favorite, let me know what it is. Tony at tony martignetti dot com. If you missed any part of today’s show, find it at tony martignetti dot com. Fund-raising from the heart, february twelfth and thirteenth, taught by the very smart lin twist information in registration at thp dot or ge slash ff, th foxtrot foxtrot tango hotel km, jozy salem, keizer, oregon. Welcome again, our creative producer is claire meyerhoff. Sam liebowitz is our line producer shows social media is by susan chavez, susan chavez, dot com and the remote producer of tony martignetti non-profit radio is john federico of the new rules. This terrific music is by scott stein of brooklyn. You’re with me next week for non-profit radio. Big non-profit ideas for the other ninety five percent. Go out and be great. What’s not to love about non-profit radio tony gets the best guests check this out from seth godin this’s the first revolution since tv nineteen fifty and henry ford nineteen twenty it’s the revolution of our lifetime here’s a smart, simple idea from craigslist founder craig newmark yeah insights, orn presentation or anything? 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