Tips from the Science of Charity

Posted by Laura Otten, Ph.D., Director on June 23rd, 2016 in Thoughts & Commentary

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For the second consecutive week I’m blogging on research findings about money.  Ever since the science of charity became popularized in the 1990s, the nonprofit sector has been interested in understanding the how, what and why of us, and that inevitably results in lots of research.  Too bad, we don’t always pay attention to that research.

And that is a mistake—particularly when it comes to all of the research surrounding money:  where it comes from, why we get it and why we don’t, and more.  In fact, the research on giving is a double-edged sword for development staff, as it makes their lives both harder and easier.  Harder because it means a lot of reading; easier because if read, synthesized and acted upon, their strategies should be better and reap bigger rewards.   But I’m happy to cherry pick what I think is interesting in two recent releases of research findings.

For the last 15 years, The Committee Encouraging Corporate Philanthropy, in conjunction with the Conference Board, has done an annual survey of corporate giving and its CSR (corporate social responsibility) program.  Earlier this month, the most recent iteration of the survey results came out and the data paint an interesting picture.

There were 272 multi-billion dollar companies participating in this year’s survey (an enormous increase over the 17 that responded to the first survey in 2001; 62 are Fortune 100 companies.  In total, they gave $24.5 billion.  Yes, this pales compared to the $373.25 billion Giving USA 2016 says individuals gave and the $58.46 billion foundations gave, but it is still nothing to ignore.  (By the way, Giving USA reports only $18.45 billion in giving from corporations.  This difference is one of the reasons why it is important to understand the research you read, paying particular attention to the source of the data.  Both sources appear to count both cash and in-kind donations.)

Here are some interesting takeaways upon which to chew.

  • Between 2013 and 2015, almost half (47%) of the companies saw their total giving increase anywhere from 2%-10% (12% of the companies) to more than 25% (18% of the companies).
    Tip:  don’t ever assume that what is happening in one corporation is happening in all, or even at others.  Reach out and risk the no or welcome the yes.
  • With one exception (communications industry), cash donations from a corporation and/or its foundation, was the primary source of giving for all industries. Only three industries (communications, consumer staples and health care) gave 1/3 or more of their total giving through in-kind donations.
    Tip:  despite what they say, corporations are still giving more in cash than volunteer hours.
  • Of the $24.5 billion in giving, $861 million came through matching employee gifts.
    Tip:  if you don’t push company matches when you solicit funds, you may be leaving a tidy sum on the table.
  • The majority of respondents indicated that winning the trust of consumers and stakeholders was an articulated goal (17%) of their social engagement activities, “mostly yes” an articulated goal (13%) or “somewhat.” This no doubt plays into what data have shown for years that employees want to work for socially responsible companies, and consumers want to buy products from socially responsible companies.
    Tip:  While helping any nonprofit can be used to demonstrate corporate responsibility and civic engagement, have a clear story that separates you from the pack and plays to the corporation’s own mission.
  • Contrary to what one might think (which is why hard data is so much better than assumption), employees on the organizational charts with titles such as President, Vice-President and Director had lower median giving than those lower on the organizational charts with titles such as Administrator, Analyst, Associate, Coordinator, Specialist, etc.
    Tip:  Those of you who want your board members to bear titles such as VP and President may be losing out (and not just when it comes to dollars).
  • Corporate commitment appears correlated with corporate giving, as those companies with a dedicated CSR/Corporate Citizenship department gave the most and had the larger pools of employee volunteers.
    Tip:  Research a corporation, as all are not giving equally.  Spend your resources more wisely by targeting those companies that announce their commitment through a department dedicated to making sure civic engagement of all kinds happens.

Fidelity Charitable, a manager of donor advised funds and self-identified as the second largest grantmaker in the country, takes an annual look at charitable giving through the lens of its more than 80,000 donor advised funds.  In its 2016 Giving Report, Fidelity Charitable donors are looked at discretely and in comparison to the general population of donors.  Ponder this:

  • Contrary to what many think about donor advised funds, 61% of the accounts at Fidelity Charitable have balances under $25,000 and the average grant size was $4,179, down a bit from the 2006 high of $4,430. The average number of grants per donor advised fund has gone up in that same 10-year period, from 5.3 to 9.2.
    Tip:  Would you please, finally let go of the myth that you need wealthy people on your board to raise money?  You need people who understand philanthropy!
  • Despite the size of the average grant, the reality is that almost 2/3 of all of the grants made were $50,000 or more, with gifts of more than $1 million comprising 27%.
    Tip:  Read the next tip.
  • Despite the fact that Fidelity Charitable is not a community foundation which encourages giving locally, half of all the grant dollars went to nonprofits in the donors’ home states.
    Tip:  Some things should be built in your backyard—like relationships with donors—of all sizes.
  • There may be something different about those who give through donor advised funds, or just those whose funds are at Fidelity Charitable, but 85% of the latter group give to six or more charities, whereas only 36% of wealthy donors from the general population give to six or more charities.
    Tip:  Given that donors don’t walk around with placards announcing where they keep their charitable dollars, never answer for anyone else.  Always share your story.
  • 2/3 of both Fidelity donors and other affluent donors spend five hours a month or more on “philanthropic activities”—volunteering, researching nonprofits, etc.
    Tip:  We know those who volunteer give four times as much money to nonprofits as those who don’t volunteer, so make sure you provide a positive volunteer experience.  And, harkening back to the research of last week’s blog, make sure the content you give donors when they do their research—your website, your print literature, etc.—is delivering what donors need and want—not what you want to tell them.

A little data point, if read and considered, can cause a huge ripple effect.

The opinions expressed in Nonprofit University Blog are those of writer and do not necessarily reflect the opinion of La Salle University or any other institution or individual.