Focus groups and an online survey (Hope Consulting conducted the research) tapped the opinions of more than 4,000 individuals, half of whom were from high net worth households. Their methodology, in Hope Consulting’s words, “investigated behaviors, not simply stated preferences” and “forced individuals to make trade-offs to mirror real life decisions and minimize pro-social responses.”  Based on this research, the report develops six different donor segments and provides advice for reaching each one.

The survey’s key findings overturn some conventional wisdom in fundraising:

• Donor demographics, in particular, age and gender, are not reliable predictors of high net worth donors’ actions
• While donors care about the quality and performance of nonprofits, few take the time to research them
• High net worth donors are not behaving differently from other donors

And some less surprising findings:

• Donors, once connected to a nonprofit, are very loyal to it
• Donors feel they are being asked for support too often

The Money for Good project is funded by the Rockefeller Foundation, the Aspen Institute of Development Entrepreneurs, the Metanoia Fund, and the William and Flora Hewlett Foundation. Click here to download the full report.

First, let me start with a perspective on how big philanthropy and the nonprofit sector are. For the past three years, giving in our country has topped $300 billion. The largest foundation in the world (in assets), makes up one percent of total giving in America. Last year approximately 10 percent of all money given was given by individuals to foundations that will invest it and, over time, it will trickle down to charitable programs. While investments in foundations and advised funds has slowed a bit due to the recession, the amount of funds set aside for philanthropic purposes has steadily been growing. The nonprofit sector is today about 10 percent of our overall economy. For more information, review Giving USA at www.givingusa2010.org

If the top billionaires in our country and world committed 50 percent of their fortunes to philanthropy, the ripple effect of others giving more and the increased confidence in results could mean a significant uptick in giving, possibly even doubling in the next generation.

Here’s my perspective on the leading change elements, and I invite your ideas and welcome your counter-comments.

*  Major funders are investing in issues rather than organizations, and channeling their investments through providers with strong track records: This trend has been gaining steady momentum over the past 15 years, and has resulted in a change for federated giving programs, such as United Ways, across the country and has also been adopted for the channeling of government funds into community programs. Individual donors and grant makers have demanded accountability and have stepped up significantly to fund compelling issues with proven results. Nonprofits that are well-positioned as preferred providers, and with the willingness to enter into collaborative partnerships and be rigorous about evaluation, have been the channels for new social impact philanthropy.  The trend has enabled some lesser-known providers to grow significantly, while others with high recognition and large donor bases have been left out.

The Bill and Melinda Gates Foundation’s grantmaking has followed this direction for the past decade. They have prioritized a limited number of issues where they want to create significant and lasting change, and they are investing heavily in promising ideas and proven approaches.  Similar to both venture capital investing and scientific inquiry, they are willing to make mistakes and change course if results are not achieved.

This past week there was a gathering in New York of 400 nonprofit leaders and grantmakers, convened by the Robert Wood Johnson Foundation, to help charities with proven approaches solve social problems and get the funds they need to sharply increase the number of people they serve. Gone are the days when “doing good” or “promising results” was enough to secure significant and ongoing funding.

*  Investors are looking for both financial returns and social impact: The federal government’s Social Innovation Fund and several for-profit private equity firms are making investments to help entrepreneurial nonprofits find the capital funds they need to expand. Some nonprofits, such as Kiva, are directly connecting investors willing to make a loan with program recipients. Others are serving as the “holding entity” for investor loans, and a financial return is expected.  Last week in Seattle, Global Partnerships launched this innovative capital generation vehicle, and many others nonprofits, primarily in the global development arena, are preparing to follow suit. The National Nonprofit Finance Fund and for profit firms, such as Sea Change Capital Partners and Affinity Partners, are looking for creative ways to achieve social impact and financial returns. Gone are the days when nonprofits could get by with strong visions and a weak business plan.

*  Partnerships are essential for growth and even survival: As evidenced by the gathering this past week in New York and Bill Gates and Warren Buffett’s joint appeal to other billionaires to invest in philanthropy, significant wealth is in and will be transferred into foundations that will then have the challenge and opportunity to make smart investment with high social returns. The major foundations across our country are partnering for maximum results, and expect nonprofits to work collaboratively to do the same. Significant investments have been made in evaluating effective grantmaking and it will continue. Nonprofits working in areas identified as top community priorities and with proven results have the opportunity for growth and increased social impact. “Going to scale” can be achieved many ways and partnerships with other providers will likely occur at a faster pace than in the past. Gone are the days when funders (and even loyal individual donors) will have the willingness to invest in “boutique” organizations intent upon survival that lack capacity through their partnerships to create true social impact.

For the third year in a row, giving exceeded $300 billion even though overall giving declined 3.6 percent in current dollars. As expected, giving increased in sectors providing services to those most in need: human services, health, and international affairs.

So now that we know what happened last year, what can we anticipate moving forward?  The folks at Giving USA say that giving will recover, but it will be slow going. We can expect at least a three- to five-year period until giving returns to pre-recession levels. It was a hard year, but not as bad as we thought. The loyalty of the majority of donors should be applauded.

This year, the Giving USA Foundation is generously offering a free copy of the executive summary for anyone interested.  Click here to download it.  To order a copy of the full 2010 Giving USA report, click here.

If you’re unsure where to start when it comes to tracking the success of your online messaging or fundraising check out the recently released 2010 eNonprofit Benchmarks Study from M+R Strategic Services and the Nonprofit Technology Network.  The report is available for free download here and includes benchmarks for email messaging, online fundraising, and online advocacy segmented by sector.  It’s a great resource to help your organization start thinking about ways to track and analyze your online activities.

I am a TNC member, affiliated through Washington State. I receive the Washington TNC publications and my communications from the organization have, until now, been localized.

While many nonprofits don’t have the scale of TNC, most have the capacity to send “plain talk” updates to donors on issues that relate to their missions. TNC, as a whole, is demonstrating that the gift I have already made has helped them respond quickly and given me confidence that they are at the forefront with the science needed to limit the disastrous impacts of this environmental crisis.

May 1, 2010

Dear Aggie Sweeney,

Thank you for the outpouring of concern during this time. The first waves of oil started to come ashore here on Friday around noon, approximately 45 miles south of New Orleans on the Mississippi River.

Conditions along the coast since Thursday’s nightfall have not been conducive to doing a lot of preventative work — the seas are running six to eight feet high, and that plus an abnormally high tide has made it basically impossible for the responders to deploy the booms that would contain the slick.

I think about how last week’s Deepwater Horizon oil spill off the coast of Louisiana is going to affect one of the most treasured ecological landscapes in North America and the people who depend on it and my heart sinks.

We are putting to work all of The Nature Conservancy’s best knowledge and expertise in this region. Thanks to the support of caring members like you, we have tremendous science expertise and data to lend to efforts in Louisiana, Mississippi, Alabama and other states surrounding the Gulf of Mexico.

We have placed our shellfish restoration team at the disposal of the U.S. Department of Interior and other federal agencies to try to prevent impacts where we can, assess damage where it’s occurring and figure out how to restore as many of these natural areas as possible.

View this map to learn more about the relevance of shellfish ecosystems and the essential role they play in providing a healthy marine ecosystem for our natural world and for so many local fisherman and businesses.

Although it’s just hitting the coast and will be weeks before we’re able to fully assess the impacts of this oil spill, I want you to know we’re doing everything possible to contribute to an effective response.

Thank you again for all your concern and support. I hope you will read our blog and visit our web site to keep updated on our latest progress.

Sincerely,

Keith Ouchley
Louisiana State Director
The Nature Conservancy

Key findings from the survey include:

• Nearly 90 percent expect 2010 to be as difficult or more difficult than 2009; only 12 percent expect 2010 to be financially easier for their organizations
• While 80 percent of nonprofits anticipate an increase in demand for services in 2010, just 49 percent expect to be able to fully meet this demand level
• 35 percent of organizations ended 2009 with an operating surplus;  Only 18 percent of organizations expect to end 2010 above break-even
• 61 percent of organizations have less than three months of cash available; 12 percent have none.

Hopefully, the Labor Department’s monthly report on employment – expected to come out later this week – will show the significant national job growth that many economists are predicting, and give all of us a sign that recovery is on the way for the many people who rely on the nonprofit sector during this period of economic uncertainty.

The most significant element of this study? Why people give. Across the board, personal asks carry the greatest success – but what about those dusty direct mail letters or text-to-give numbers that seems to be everywhere?

You’ll have to read to find out, and when you do, take note of the different ways in which different ages react to online communications. Do you think it warrants a one-size approach?

Let us know or share your stories in the comments below.

But my hope for the farm family grew substantially when I recently had the opportunity to tour the Orting Valley Farms with donors and staff of the PCC Farmland Trust.  The Farms, set on 100 acres along the Puyallup River in the shadow of Mount Rainier, are a preservation success story. The fertile farmland is among the Puget Sound’s best, but its close proximity to newly developing communities makes it also valuable for new development. Furthermore, it’s home to riparian wildlife as well as a healthy and robust herd of elk. The PCC Farmland Trust was able to negotiate the sale of the properties and place permanent easements on the properties to keep them in organic farming in perpetuity. In doing so, not only was the Farmland Trust able to protect the properties, but it was also able to establish a wildlife corridor adjacent to the properties which is part of a continuum that stretches from Mount Rainier to Tacoma’s Commencement Bay.

To achieve this, the Farmland Trust partnered with the former property owners, Pierce County, the Washington State Recreation and Conservation Office, and the organic farmers who will farm the land. And perhaps most exciting is that the partnerships don’t stop there. The Farmland Trust will continue to work with its farmers to help give them the training and tools not only to be successful in their work, but to be long-term stewards of the lands they farm. The Farmland Trust will help farmers comply with environmental and policy regulations in a manner that will benefit farm while still ensuring that farming can be a sustainable way of life for the farmer. 

The PCC Farmland Trust served a critical role in helping connect all of these partners together so that they can all achieve their desired good. These models of successful partnerships make it all seem so easy – but it never is. It took more than two years of nail-biting work to make it into the successful working farm that it is becoming today, and it is worth the hard work. In looking at the intelligent, hardworking farmers who will till the soil and care for the animals that will bring us healthy food for our table – I think of my family of old farmers and become optimistic again.

Check out the Farmland Trust’s Facebook profile (and see pictures of our tour) online at: http://www.facebook.com/pccfarmlandtrust

In addition, during 2009 half of the museums surveyed for the AAM study reported that their revenues either grew or remained steady.  Giving from individuals, in addition to earned income, helped many museums close the gaps created by freefalls in public support, corporate giving, and endowment revenue. 

Click here to read the full report – “Service Despite Stress:  Museum Attendance and Funding in a Year of Recession”.

Washington State leads the Northwest region in terms of online giving. Seattle and Bellevue both made the top 10 list, coming in at sixth and ninth respectively. Three other Washington State cities also made the list: Tacoma was 54th, Vancouver was 56th, and Spokane was 94^th. Other states in our region also made the list: Portland, OR was ranked 36th and Boise, ID came in at 95th. Anchorage, AK was 118th and Billings, MT was 149th.

The top three cities were all back East. Alexandria, VA; Cambridge, MA; and Arlington, VA, topped the list as the nation’s most generous large cities based on per capita giving during 2009.

The Northwest region continues to push ahead and explore more and better ways to giving. Will online giving soon supersede the classic ask letter?

Click here to view the complete rankings of large cities.