News You Can Use
Issue 143/November 2014
Board Engagement: What’s the Norm?
Executive Vice President
Editor’s Note: CEOs and Executive Directors often express concern that their Boards are not fully engaged. Even the most active, professional Boards typically have one or two members who may be fully supportive of the organization, but do not demonstrate that commitment.
We are often asked: How can I keep my Board engaged? And even more common: How can I get my Board to fundraise?
In the following months we will continue to explore various strategies for Board engagement. This is the second article in a series on this topic.
A recent panel of Kansas City’s leading institutional funders was asked to address the issue of nonprofit sustainability.
Their conversation quickly turned to the role of the Board. It is worth noting the panel did not focus on the elements of a specific request for funding or its program effectiveness. Rather they said their decision regarding whether or not to fund an organization (not program) is determined in large measure by their evaluation of the governing body.
How does your Board of Directors compare to these statistics?
- Forty percent of all Boards have between 11 and 20 members.
- Sixty percent require Board members to make a financial contribution to the organization. The smallest organizations were least likely to make this requirement.
- Ninety percent of organizations that require a contribution report that they tell a prospective Board member about that expectation at the time of recruitment.
- Only 35% set a minimum gift amount for Board contributions.
- The average annual Board gift is just under $5,000. Education organizations report the highest average gift at $12,520.
- Only 11% of responding organizations in the religion subsector reported a minimum gift amount, but their average gift is not lower than averages in most other subsectors.
- Sixty percent of organizations track the amount Board members help raise.
- Board members are most likely to get involved by allowing use of their names (79%), asking friends or associates to attend events (78%), and making personal introductions (76%).
- Only 52% of Board members will host events in their home or business.
- Board members are least likely to develop the fundraising plan – 52% do, and rate prospective donors – 42% do.
There is no longer an excuse for Board members not to be engaged in fundraising in some capacity for your organization. It is now a widely-accepted best practice that strong organizations have Board members who are actively engaged in supporting the organization. Serving as wise counsel is no longer sufficient.
To further discuss Board effectiveness and how to energize your Board around fundraising, please contact Judy at firstname.lastname@example.org.
2014 U.S. Trust Study of High Net Worth Philanthropy:
Consistent Trends and Significant Shifts Paint a Bright Future
Editor’s Note: The 2014 U.S. Trust® Study of High Net Worth Philanthropy, in partnership with the Indiana University Lilly Family School of Philanthropy, reports the giving patterns and priorities of America’s wealthiest donors and provides valuable insights into the strategies, vehicles and approaches that can make giving more effective. This Study is a continuation of the 2006, 2008, 2010 and 2012 reports.
Conducted between April 2014 and September 2014, the Study consisted of mail and web surveys randomly distributed to 20,000 households in high net worth areas of the U.S. Only households with incomes greater than $200,000 and/or net worth more than $1,000,000 (excluding the monetary value of their home) were included in this analysis. Results are based on a nationwide sample of 632 responding households. The Study offers comprehensive information on the charitable giving and volunteering activities of high net worth households that will apply directly to our philanthropic endeavors.
This past June, JB+A partnered with U.S. Trust and the Indiana University Lilly Family School of Philanthropy to present Giving USA 2014:The Annual Report on Philanthropy for the Year 2013. We are pleased to continue to share valuable information that complements Giving USA data and can be used by nonprofit professionals, donors, volunteers and others interested in promoting philanthropy.
The Good News
The Study reveals consistent trends in the giving behaviors of high net worth individuals and households as well as some departures from past trends. Overall, the giving forecast is bright, supported by several findings:
- More households gave: in 2013, 98.4% of high net worth households donated to charity, an increase over the 95.4% who gave in 2011. This is also the highest rate of high net worth participation in charitable giving since the Study’s inception in 2006. According to The Center on Philanthropy Panel Study in 2009 by Indiana University, 65% of the U.S. general population donate to charity.
- These households gave more: the average amount given by wealthy donors increased 28% from 2011 to 2013: from $53,519 to $68,580 respectively. Average giving as a percentage of household income decreased by 1% however, as increases in income levels slightly outpaced increases in giving levels among high net worth households.
- Time is also treasure: these high net worth households also demonstrated their commitment to charitable causes through volunteering. Seventy-five percent of the respondents volunteered with at least one nonprofit organization; 59% of them gave more than 100 hours and 34% served more than 200 hours. Volunteering is also tied to giving: wealthy donors who volunteered gave 73% more on average than those who did not ($76,572 compared to $44,137).
- These households plan to give as much or more in the future: 85% of high net worth donors plan to give as much (50% of respondents) or more (35% of respondents) in the next three to five years than they have in the past. This is up from 76% who said they planned to give as much (52%) or more (24%) when surveyed in 2012. Why the plans to increase their giving? The top reasons cited are “increased financial capacity” (85%) and the “perceived need of the nonprofits or causes” they support (48%).
Motivations to Give
While there is an assortment of reasons motivating high net worth philanthropy, the following were cited as the top motivators for giving in 2013:
- Believing their gift can make a difference – 74%
- Personal satisfaction – 73%
- Supporting the same causes annually – 66%
- Giving back to the community – 63%
- Serving on a nonprofit organization’s Board or volunteering – 62%
Only 34% of the respondents cited tax advantages among their top motivations for giving.
Why Giving Stops
Unfortunately, sometimes donors stop giving and the top reasons cited for doing so among high net worth donors vary:
- Solicitations were too frequent/was asked for an inappropriate amount – 42%
- Changed philanthropic focus/decided to support other causes – 35%
- Organization was not effective – 18%
- Organizational change in leadership or activities – 16%
“This year’s Study reinforces that knowing your donors is a must,” says Jeffrey Byrne, President + CEO of Jeffrey Byrne + Associates, Inc. “If you don’t get to know your donors, you won’t be able to develop relationships with them. It is well worth the time and effort to understand your donors and learn what they value. This leads to more meaningful solicitation and stewardship and ultimately, greater impact on those you serve.”
Knowledgeable + Engaged = More Giving
More Giving + Greater Fulfillment = Even More Giving
“This year’s study reveals that when wealthy donors are engaged in their giving and find a meaningful purpose, they give more and are more impactful with the organizations they support,” said Lewis Gregory, CAP, Senior Vice President, Institutional and Private Client Advisor for U.S. Trust in Kansas City. There were strong ties between a high net worth donor’s knowledge of giving and giving behavior. It also indicated that greater fulfillment leads to higher giving levels:
- Respondents who rated themselves as “expert” in terms of charitable giving (14%) gave a significantly higher amount in 2013 ($150,229) than those who described themselves as “knowledgeable” (72% / $64,599) or “novice” (14% / $19,013)
- Fifty-three percent monitored or evaluated the impact of their charitable giving. Those who do so give a much higher amount ($104,625) than those who do not ($28,543)
- Seventy-three percent of wealthy donors reported achieving personal fulfillment through charitable giving. Those who report personal fulfillment donated more than five times the amount of those who were not fulfilled (approximately $80,500 compared to $15,100)
Other Key Takeaways
- Ask and you shall receive: A direct request from an organization to volunteer inspired the highest proportion of volunteerism (50%) in contrast to when high net worth individuals initiated the volunteer opportunity (17.5%). This is a direct reversal of 2011 trends, in which more high net worth individuals reported volunteering through their own initiative (42.8%) as opposed to being asked (30.7%).
- And the winner is: education. While many of the nonprofit subsectors benefitted from increased contributions from high net worth donors in 2013, education was the clear frontrunner.
o Eighty-five percent of high net worth households gave to education
o Education also received the largest share of dollars (27%) – more than religious causes (12.2%), environmental
causes (5.4%), basic needs (3.3%) or the arts (3.5%).
o The highest share of high net worth households also prioritized education as the most important current policy issue (56%) ahead of poverty (34.6%) and healthcare (33.8%).
- New research: giving pledge participation. Introduced by Warren Buffett and Bill and Melinda Gates, “The Giving Pledge” is a commitment by a group of individuals and families dedicated to giving at least half of their wealth to philanthropy. At the time of the Study, there were 127 households in 13 countries – 108 supporters in the U.S. – as signed supporters. High net worth households were asked about their hypothetical response if asked to participate in a similar pledge.
o Would not participate – 65%
o Don’t know – 22.4%
o Would participate – 12.7 %
To access the full 90-page report, visit www.ustrust.com/philanthropy.
We’ve all heard of Black Friday and Cyber Monday and know that they are synonymous with holiday gift-buying. And now, in its third year, there is #GivingTuesday.
The idea behind the first #GivingTuesday on November 27, 2012 was not to create new nonprofits to support, but to inspire philanthropy and encourage bigger, better and smarter charitable giving during the holiday season.
#GivingTuesday is for all of us – adults, children, volunteers, donors, businesses and nonprofits. The ways to participate are practically endless. And everyone can help spread the word. Visit #GivingTuesday to see all the creative ways people are giving back to their communities and helping create a better world.
In 2012, online charitable donations processed by Blackbaud were up 53 % over the same day in 2011. But even more impressive, on #GivingTuesday 2013 donations were up 90% from 2012!
What will happen this year?
How can you participate?
Spread the word, support a cause, make a gift, share your story… The ways to be a part of “#GivingTuesday are practically endless. And #GivingTuesday is an excellent and timely way for nonprofits to go out and make an ask.
“The opportunities for nonprofits with #GivingTuesday abound,” says Jeffrey Byrne, President + CEO of Jeffrey Byrne + Associates, Inc. “We have an abundance of data and case studies illustrating how organizations are having great fundraising success when incorporating #GivingTuesday into their year-end fundraising efforts.”
Check out the JB+A #GivingTuesday toolkit for tips on how your organization can benefit from the #GivingTuesday boost this year. Go to http://www.givingtuesday.org/ for additional information and be sure to visit http://www.givingtuesday.org/join/, to join the movement as a partner organization and/or as an individual social media ambassador.