Zimmerman Lehman: "Private Giving Is Up: Is Your Organization Benefiting?"

If you read the philanthropic press, you know that the Giving USA Foundation recently released figures on private charitable giving in the U.S. in 2005. These figures bring joy to Zimmerman Lehman's heart. Donations from individuals and private grantors totaled $260.28 billion (or better than $1 billion every working day). This represents a 6.1% jump over 2004 (2.7% adjusted for inflation). As always, individual gifts far outstripped grants: 83.2% of the money came from living individuals and bequests.

Let's dig a little deeper, and as we do so, think about your own nonprofit organization and whether it is benefiting from this breathtaking windfall. First, donations from live individuals jumped substantially, while bequests were down (due to a slowing death rate). What is the lesson here? As Zimmerman Lehman has preached for lo these many years, solicitation of gifts from living individuals should be the backbone of every nonprofit's development efforts. Look at the numbers: living individuals gave $199 billion, while foundations gave $30 billion, corporations $13.7 billion and bequests $17.4 billion.

Are you taking full advantage of your individual fundraising potential? Here's a little test: We'll list some techniques for soliciting gifts from individuals, and you put a check mark next to those that you have used in the last 12 months.

We're not going to grade you, but it should be obvious that if you've checked only two or three of these techniques, your organization is failing in pursuit of the most lucrative pool of philanthropic gifts.

A second important fact about private giving in the U.S. in 2005 is that corporate contributions increased dramatically-by 22.5% (18.5% after inflation)! Many businesses did very well indeed in 2005, and their philanthropic giving reflects the enormous revenue growth in certain industries. The Committee to Encourage Corporate Philanthropy conducted a survey of 62 companies entitled "Corporate Giving Standard." The study revealed a 17% increase in these companies' revenues and 15% growth in pre-tax profits. It is no surprise, then, that corporate philanthropy was also on the rise.

While much has been made of the corporate sector's immediate and generous response to the tsunami in Southeast Asia and Hurricane Katrina, nonprofits must guard against taking the wrong lesson here. What researchers found time and again was that corporate donations for disaster relief were in addition to, not instead of, other corporate philanthropic contributions.

At Zimmerman Lehman, we recommend that you poll board members, staff members, ex-board and staff, volunteers and clients to find out "who knows whom" at local companies. Businesses give to nonprofits because someone inside the company knows the nonprofit and "pitches" it internally. As with individuals, your nonprofit must take advantage of the opportunities right in front of you.

A final observation about private giving in 2005 is to Zimmerman Lehman the greatest comfort of all: average philanthropic giving in the U.S. per household was 2.2% of after-tax income, which equals the 40-year average. While economic and political pressures have some impact on giving, the bottom line is that people in this country are generous and will continue to be so. The money is there in good times and bad; make sure that you are pursuing it in all appropriate ways!

More information:
Giving USA Foundation (study and book)
AFP article
Chronicle of Philanthropy article
Philanthropy Journal article

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