Trends Supply Knowledge, Facts, and Power

Trends matter, and so does our awareness of them. That was one of Jimmie Alford’s clear messages 
delivered at the Alliance for Children and Families Fund Development Conference this past April. Alford, former president 
of the Alliance board, current president of the Families International board, and chairman of The Alford Group, Evanston, Ill., 
provided the keynote presentation, “Critical Issues Impacting Trends in Philanthropy,” and he made it quite clear that we all need to be aware of the critical economic, demographic, and revenue trends impacting the United States. 

With that awareness, we should understand the marketplace in which 
we work while also improving our 
fund-development strategies. A group of trends assists us in developing strategies 
to be more persuasive in articulating 
our cause, as familiarity with facts and 
figures brings credence to our case. 
Best of all, with knowledge and facts 
come the power to meet our competition head on–and prevail.

Consider the realities of the nonprofit sector for a moment. First, its magnitude and significance: There are 1.4 million organizations registered with the IRS, and these organizations employ more than 12.5 million people. Our sector now accounts for 8.3 percent of all wages and salaries paid in the United States, and comprises more than 5 percent of our Gross Domestic Product. Add to that the more than 61.2 million people who volunteered at a nonprofit organization during 2006.

What are some of the major giving trends according to Giving USA Foundation/Giving USA 2006 that Alford shared with us? Some of the most powerful were on who is actually doing the giving. Individuals account for more than 76.5 
percent of all giving, while bequests account for 6.7 percent.

When you combine those two 
categories, it shows that 83.2 percent of the $260.3 billion given in 2005 was from 
individuals. That is staggering and well worth paying significant attention to in our planning. The fantasy for many is that corporate and foundation giving is the key to success. With corporate giving at 5.3 
percent, one might characterize corporate America as something other than “key” when it comes to philanthropy. Found-ations, which are at 11.5 percent, also are not the major factor.

Of course, the role foundations and 
corporations can play in assisting national associations, research hospitals, and 
universities make a difference. But, for small- and modest-size local providers of child and family services, they are 
obviously not the dominate player. For 
the local agency, a relationship with a solid base of individuals who share our 
values and aspirations remains the bedrock of philanthropic health and the best 
long-term opportunity.

There is much good news contained in the latest trends for human services. In 2003, we received less than 7 percent of the total giving in the United States. But, as of 2005 we have moved up to almost 10 
percent. The very good news for us is that children, senior, and family issues are rising in importance for America’s donors. They hear you and they are responding.

In a previous article, I highlighted the Bank of America-funded study by the Center on Philanthropy at Indiana University. Published in 2006, that study adds significant information for us to work with and from which to focus our 
strategies and tactics. Most important is the finding that 66 percent of all household 
giving (individuals) is from the wealthiest 3 percent of households (defined as having incomes of $200,000 or more and/or 
investment assets of $1,000,000 or more excluding primary residence).

What is motivating this generosity in the affluent? It is the desire to “give back.” Leaving a legacy is important, but giving back and making a difference is a real and 
primary driver with donors today. In fact, giving back, combined with meeting critical needs and a feeling that those with more should give to those with less accounted for more than 86 percent of the motivation for giving. Again, great news for us, and our message can be found in this trend.

My personal and professional favorite trend suggests a simple fact that I believe is at the core of philanthropy: relationships matter. It is not about the capacity to give the money. It is about the relationship and shared values and vision. The study explores the myth that people of affluence just want to write a check. In fact, the level of giving to charity increases significantly (massively) in relation to the number 
of volunteer hours contributed. What 
wonderful affirmation of what we strive to accomplish for others.

The data shows the average gift of a 
volunteer who spends more than 200 hours a year involved with us increases by four times over the volunteer who spends one to 50 hours with us. In other words, the more they know, the more they 
understand, the more they share our 
passion, and the more they donate. The 
studies also suggest that our most generous donors will be the entrepreneurs of 
society–those who invest and seek a return on that investment. Again, this is important news for crafting our messaging and positioning our appeals. Those donors whose wealth was achieved through real estate or simple savings tend to be more cautious donors, but still significant ones.

The data offer important insights into technology and philanthropy as well. In 2004, more than 8.6 million households donated more than $3 billion online in the United States. Of those donors, 35 made half of their total gift amounts online 
while another 22 percent made all of 
their donations online.

Furthermore, 65 percent of all donors now visit an organization’s Web site before they make a donation, and 75 percent of these visitors say that their visit made a 
difference in their giving. The current 
statistics about online giving versus 
direct mail are powerful. A 100,000-piece direct-mail campaign effort will return about $0.60 on $1, while the online 
effort will return approximately $42 on a 
$1 dollar investment, often achieving a response rate of 8 percent, much better 
than the 2 percent achieved by the typical 
direct-mail campaign.

As with wine and cheese, age matters when it comes to donors. It is most important to recognize that the motivators for each generational cluster are quite different, as are the vehicles for communication and donations. Most of us have strategies that were developed on the norms of the Greatest Generation and few of us have considered the changes required to speak with and appeal to the “Gen Next” group. 

When one thinks about the numbers alone, it is clear that we need to do some thinking and planning. The break out is as follows: Gen Next (1981-2002) account for 84.5 million individuals compared to Gen X (1963-1980) at 68.3 million; the Boomers (1946-1962) at 69.2 million; 
the silent cohort (1925-1945) at 44.3 
million; and the Greatest Generation (1901-1924) at a mere 14.9 million. Needless to say the loss of numbers in the 
Greatest Generation is quite significant and accelerating and the magnitude of the Gen Next cohort quite significant. 

It is not possible to summarize all the useful data Alford provided at this 
wonderful plenary session in April. Thanks to the Alliance’s Severson Center, the entire presentation is available to you on the Web site at www.alliance1.org/Conferences/
RDS2007/workshops.htm.

In addition to Alford’s keynote 
presentation, the Fund Development Conference offered a number of 
provocative and useful workshops and opportunities for networking. Some of the many topics covered included: demystifying endowments; prospect research; the details of managing the development process; the basics of board partnership in communication, a toolbox for beginners; how to reenergize the endowment; telling our best stories; and a roundtable with Ilene Mack of the William Randolph Hearst Foundation. 

It was a very informative and productive conference on philanthropy in the child, senior, and family serving sector, and more than 85 development colleagues 
participated. Mark your calendar for the third annual conference April 17 and 18, 2008, in Milwaukee. It promises to be even bigger and better. I hope to see you there.

Bob Jones is chair of the Alliance’s Resource Development Services Advisory Committee. He is president and CEO of Alliance member Children’s Aid and Family Services, Paramus, N.J., and a former member of the Alliance Board of Directors.

Article PDF: 

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