Tag Archives: growth

Giving USA Numbers and Beyond

TAG group photo2Photo: Alford Group staff at As Good as It Gives: America’s Philanthropy Today on June 17, 2016 at Mesirow Financial in Chicago.

 

The Alford Group co-sponsored As Good as It Gives: America’s Philanthropy Today with Mesirow Financial in Chicago to share this year’s Giving USA numbers and discuss what the numbers mean for not-for-profit organizations.

Here are the main takeaways:

  1. Giving is on the rise

The Alford Group’s Executive Vice President Sharon Tiknis and Senior Consultant Diane Knoepke presented to the room and reported that 2015 was America’s most generous year ever, as donors collectively gave over $373 billion. Slide 7Giving is on a two-year increase, as 2014 was previously charted as the most generous year of giving. Since the Great Recession ended in 2009, giving has increased by 23 percent. Individuals continue to represent the majority of giving in America at 71 percent of total giving in 2015.

 

  1. Today’s donor looks less like Ned Flanders and more like Montgomery Burns
Flanders-Burns

Dr. Daniel Hungerman from the University of Notre Dame spoke to us about long term giving trends. Even though giving to religion-affiliated organizations currently makes up approximately one-third (32 percent) of all giving, the trend is that as religion declines in the U.S. so does giving to religious organizations (fewer Ned Flanders donors).

[Simpsons characters Ned Flanders (left) and Montgomery Burns (right).]

At the same time, there is a rise in the inequality of giving. Dr. Hungerman reviewed the findings in his research showing what has long been the 80/20 rule now looks more like a 90/10 rule in philanthropic giving where 90% of the funds raised come from just 10% of donors (more Montgomery Burns donors).

Disheartened by this news? Don’t be. Despite this fact, philanthropy continues to be quite democratic in the United States, according to Dr. Patrick Rooney at the Lilly School, and when you consider that there are more American donors than American voters, those small gifts add up to make a meaningful difference.

  1. The way forward is through mission alignment

What does this all mean for you and your organization? The most effective way forward is to think strategically about mission alignment. This means aligning your operations with the outcome-focused vision from which your organization was built.

Specifically, this means aligning your strategy and tactics with your mission to ensure you are efficient and effective. This also means aligning your impact measurement with your mission to measure the outcomes of your work versus the outputs of your work. Finally, this means aligning donor messaging with your mission so that you are appealing to the donors’ passions rather than only the organization’s needs. The key is to always have your mission and your donors in mind.

To go even deeper and tackle these topics and more, please join us for The Alford Group Summer Webinar Series where we will explore bold strategies to advance philanthropy. We hope you can join us!

Giving USA: The Annual Report on Philanthropy is the seminal publication reporting on the sources and uses of charitable giving in the United States. The production and release of Giving USA is the result of the collaborative efforts of Giving USA Foundation, a public service initiative of The Giving Institute, and Indiana University Lilly Family School of Philanthropy. The Alford Group is a founding member of the Giving Institute.

A New Year….and New Unknowns

This is a fun time of the year when you get to reflect on the past and look forward to the future.  Over the holidays I read article after article summarizing the growth made during 2010, taking our country out of recession (ever so slowly) and into more future opportunities.  And then there were the articles projecting economic growth for 2011, offering both positive and not so positive views of what the future might hold.

One has to consider what this all means for the not-for-profit world and the prospects for the organizations and institutions that serve our communities every day, day in and day out.

Here are a few economic tidbits for your consideration:

  • The DJIA increased 11% during 2010 hitting 11,577 on December 31st.
  • The DJIA first closed at the 11,577 mark on January 7, 2000, 11 years ago
  • The S&P 500 increased 12.8% during 2010 hitting 1,258 on December 31st
  • The S&P 500 first  closed above the 1,258 mark on January 6, 1999 nearly 12 years ago

Since the first of the year, three weeks ago, the market has had some nice gains with the DJIA over 11,800 and the S&P 500 at 1,280.  Above I mention an 11 and 12 year difference in the numbers.  Now it is down to a 5 year difference as both indexes first hit this mark in 2006.  Because of the market recovery toward its all time high of 14,167, we are returning to a period of more investor confidence which will be important for contributions in the sector going forward.

Another factor is the savings rate.  Since the 4th quarter of 2008 the savings rate has been above 5% for 8 consecutive quarters.  Rather than being a nation of spenders we are becoming a nation of savers.  As savings assets increase we may also see an increase in the stock market.  Money market funds which are earning approximately .25% (yes, a quarter of one percent) have grown to nearly $3 trillion.  This does not count checking accounts, savings accounts and short term CDs which would add to the cash available for investing and/or spending.  Prior to the previous 8 quarters, the savings rate during all of 2006, 2007 and most of 2008 was in the 1% to 2% range.  This is a significant shift for America.

Though I do not have the complete statistics here, Americans are also paying down credit card debt, which is also at its lowest levels since 2008.  For the past 18 months, consumer credit card debt has continued to decline easing the burden on American families.  The amount of debt over that period has fallen from $975 Billion to $852 Billion.  Still a lot of money that is owed, but a significant drop none the less since the debt was growing up until that time.

Americans are still being cautious with their resources – but there is room for them to become optimistic.  What messages are you sending your donors and constituents about the needs your organization is meeting every day, day in and day out?  With the gains during 2010 and anticipated gains for 2011, there is reason to believe things will continue to improve across the nation and for the not-for-profit sector.  However, one item looms large for many not-for-profits – and I will write about it next week – the impact of state government cutbacks as nearly 40 states may be on the brink of bankruptcy and thus unable to meet their financial obligations.

As always, I look forward to any additional insights and comments you may have on this topic.

All the best,

Tom