Category Archives: Major Gift Solicitation

Life aside, art imitates our economy

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By JEFFREY BYRNE

Only a handful of performing arts centers have opened in recent years across the country. Last fall the $366 million Kauffman Center for the Performing Arts debuted in Kansas City, Missouri with back-to-back sold out performances.  An early pledge over $100 million through Julia Kauffman contributed to fulfill her mother Muriel’s original vision.

Two months later Crystal Bridges Museum of American Art opened in Bentonville, Arkansas. The last time a museum opened with this caliber of an American art collection was a half century ago. Once again the money came from private sources, namely Alice Walton, heiress to the Walmart fortune, who funded the museum and its acquisitions, Walmart, which is sponsoring free admission for the foreseeable future and the Walton Family Foundation, which endowed $800 million—the largest cash donation on record to a U.S. art museum.

What is even more remarkable than the theater and museum being constructed during a recession and opening in cities many in the art circle consider the most unlikely of places is the fact that the arts are being funded again. Life aside, art imitates our economy.

According to the Giving USA™’s report on 2011 charitable donations, overall giving increased for a second year in a row. Giving USA estimates total donations at $298.42 billion in 2011, reflecting similar gains across the economy. The numbers represent a 4 percent growth in current dollars and .9% in inflation-adjusted dollars. Giving USA categorizes charities into 10 sectors. All but two sectors, religion and foundations, experienced gains.

“America’s charities have been traveling down a very rocky road in recent years, as evidenced by the data in our annual estimates and reports from those working in the field,” said Jim Yunker, Ed.D., chair of Giving USA Foundation™. “Our Board members are cognizant of that reality but also see a bright spot–charitable giving, like other spending categories in the average American household budget, seems to be climbing out of the trough that resulted from the Great Recession, much like some other indicators measuring the state of the economy.”

Traditionally patrons of the arts are high net worth individuals and Kauffman and Walton could arguably epitomize the definition of high net worth. Granted the Kauffman Center and Crystal Bridges are extreme examples. Of course economic hardships do not impact the wealthy’s daily lives like they affect most of us, not even close. However, a recent study shows we regular folk have something in common with high net worth families when it comes to charitable giving.

The 2010 Bank of America Merrill Lynch Study of High Net Worth Philanthropy, which tracks shifts and trends in the giving behaviors of our nation’s wealthiest donors, revealed that economic uncertainty affects their financial decisions too. The study found 71.2 percent of wealthy households report they give when they feel financially secure.

Charitable donations overall took a double digit hit from 2007 to 2009. Service-based organizations were stretched to the breaking point just to provide basic essentials as demand skyrocketed. Funding the arts seems frivolous when people are losing their homes and livelihoods in record numbers.

Giving to arts, culture and humanities, the least funded philanthropic sector during a recession, increased 4.1 percent in 2011. Research at the Center of Philanthropy at Indiana University also suggests a correlation between charitable giving and the economy. In an abstract way the Kauffman Center, Crystal Bridges and the estimated $13.12 billion donated to the arts last year signals a stabilizing economy and better times right around the corner for the 99% living on Main Street.

Jeffrey Byrne is Founder & CEO of Jeffrey Byrne & Associates. Since 2000 his firm has assisted nonprofits across the U.S. in raising nearly one billion dollars. Jeffrey is a thought leader in philanthropy and his firm is a member of Giving USA, the fundraising and philanthropic arm of the Giving Institute:  Leading Consultants to Nonprofits where he is Second Vice Chair. 

 

 

Obesity Rates Continue To Rise, Opportunity for Collaborations?

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For those nonprofit organizations who deal with adult and childhood obesity the negative societal trend continues to expand. This article “Obesity Rate Up in PA”  in the Pittsburgh Post Gazette today shows the current data for Pennsylvania which mirrors the rest of the nation. More and more people through all walks of life are realizing the enormity of the problem. Organizations like the YMCA are trying to deal with this epidemic head on.

This is one of the hot issues in terms of case development today. We are seeing increasing support and contributions from donors to do something about it. Seeing that this issue is directly correlated to health care costs, increasing diabetes, etc., nonprofit organizations have a greater opportunity to collaborate with other organizations to address this in their local communities. At JB&A we specialize in public/private partnerships and collaborations.

“Why Don’t Board Members Do What They Are Supposed To Do?”

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In May and June of this year, I facilitated a webinar nationally, titled “Why Don’t Board Members Do What They Are Supposed To Do?”  The webinar topic turned out to be very popular and relevant.  I am including the link to the recording (voice and power point together).  If you were not one of the nonprofit organizaitons who had the opportunity to participate in the webinar, this is a great way to do it. I would recommend this as a resource for anyone who works with boards on financial development.  To access the link, please click here:  Webinar Recording 6-30-11,  then wait a few moments for the connection from Webex.com to bring up the recorded webinar.  It is 52 minutes in length.

Top 10 Fundraising Ideas

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I regularly receive the monthly newsletter from Guidestar.  Each month there are articles on topics related to financial development and fundraising. This month’s article is Top 10 Fundraising Ideas. These fundraising ideas are taken from a book titled ”Nonprofit Management 101: A Complete and Practical Guide for Leaders and Professionals”, by Darian Rodriquez Heyman. I found it to be interesting reading.

The Fundraising Climate And Donor Warming

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The following article was written by Jeffrey D. Byrne, President and CEO of Jeffrey Byrne & Associates, Inc.

Since the fall of 2008, nonprofit organizations, fundraisers and donors alike have kept a watchful eye on the economy. I’d go so far as to say that I’ve had few fundraising conversations where the state of the economy didn’t come into play. More often than not, people are trying to get an accurate prediction for the future. It’s completely understandable. However, fundraisers are not psychics.

Fundraisers have been forced to don financial analyst hats over the past 2½ years. As we transition into the “new normal” of our economy, our clients expect us to be able to overcome economic uncertainty among their donor ranks. Psychic ability aside, this takes meeting donors where they are and supplying them with hard facts. Not to do so is not doing our job.

Good or bad, we have to own the economy. Of course, meeting campaign goals is easier in a good economy. But the needs of nonprofits and charitable organizations wait for no economic upswing. They intensify. Couple spiking need with a collective insecurity in consumer confidence and you could end up with an uphill campaign battle in which doom and gloom overshadows the spirit of generosity.

Blackbaud’s 2010 State of the Nonprofit Industry Survey reports, “A majority (more than 70 percent) of respondents reported they expect demand for their organization’s services to increase this year [2010] and next year. Approximately a quarter expects demand to stay the same.”[1]

Parallel to a growing need for services is an expected increase in all types of funding. The current fundraising climate is improving. And donor warming is evident. According to Blackbaud’s survey, respondents receive funding from a variety of sources. Funding sources cited most frequently by respondents are total individual donations (98 percent), individual donations from major giving (92 percent), memberships (89 percent), government grants (88 percent), individual donations from recurring giving (86 percent), individual donations from planned giving/bequests (86 percent), and so on.

When asked about expected changes in funding sources, respondents reported, “The sources most likely to increase in 2010 are total individual donations (55 percent), individual donations from major gifts (45 percent), special events (42 percent), and individual donations from recurring giving (37 percent).” We’ll soon discover whether or not these expectations were accurate when The Center on Philanthropy at Indiana University’s publishes its Giving USA 2011 report in June.

But even if statistics swing the other way, it is still possible to run a successful fundraising drive. One area it takes is to surround the campaign with smart, motivated, forward-thinking individuals who aren’t afraid to take responsibility for addressing what is on the donors’ minds. Right now, what’s foremost on their minds is an excruciatingly slow economic rebound and uncertain future.

Given that we fundraisers are pros at wearing a variety of hats, financial analyst being just one of them, we must arm ourselves with facts and sources to ease donor anxiety.

The Center on Philanthropy, which will release Giving USA 2011 in June, is regarded as the primary leader in philanthropic study and research. The Center’s research finds that short-term, mid-year stock market volatility is not indicative of what happens to overall giving. Change in the Standard and Poor’s 500 Index at the end of a year is one of several predictors of giving (others include change in personal income, tax rate changes, and recent changes in actual itemized deductions).[2]

For total giving, Giving USA estimates have fallen “within 2 percent of the final numbers once the actual data are available for all years since 2001 except 2005, when the Katrina Emergency Tax Relief Act inspired additional giving. The relationships between charitable giving and broader economic trends are less certain when people change their giving because of an infrequent event—such as a tax law change, very high rates of mortgage foreclosures, or a natural disaster.”[3]

Dropping unemployment rates and a rising stock market are reported across the media. It’s encouraging news like this that Rich Bailey, Director of Philanthropy, Nature Conservancy, Kansas Chapter, intends to call to his donors’ attention.

Bailey explains, “We’re anticipating a smaller 2- to 3-year bridge campaign to fill the gap between our last and next major fundraiser. We’re cautiously optimistic because the stock market has bounced back and unemployment is down. Though we’ve stayed in touch with our donor base, raising $5 million for conservation in Kansas is going to require addressing economic concerns and financial uncertainty. Along with pointing out the rising stock marketing and dropping unemployment, we’re offering flexible donation options: delaying and extending pledge periods.”

The economy dictates the fundraising climate like no other factor does. Fundraisers and organizations have absolutely no control over the economy. But we can use the resulting climate to bring about donor warming. All it takes is accepting the fact that we are not only fundraisers, we’re also financial analysts for the time being. Our contribution to donor warming should be redirecting our expertise in making sense of our clients’ organizations’ facts and figures to putting donors at ease with the larger economic trends and statistics, which are available from resources readily available to us. You just have to know where to look.

 [1] Blackbaud. (n.d.) 2010 State of the Nonprofit Industry Survey. Retrieved from http://www.blackbaud.com/files/resources/downloads/Research_SONI_NorthAmericanResults.pdf.

[2] The Center on Philanthropy at Indiana University. Retrieved from http://www.philanthropy.iupui.edu/Research/GivingAndEconomy.aspx.

[3] Retrieved from http://www.jeffreybyrneandassociates.com/docs/2010GivingUSAMediaKit.pdf.