What We Can Learn from America’s Biggest Non-profits?

Philanthropy 400 is the Chronicle of Philanthropy‘s annual list of the 400 groups that raised the most funds from private sources.  For 2011, these groups achieved a median 7.5-percent increase from last year, the third straight year of median gains for non-profits in the Chronicle‘s rankings.  That’s amazing considering the depths of the recession that affected most charities.  “Giving USA” said that charitable giving overall grew less than one percent last year.  About $1 out of every $4 donated by individuals, corporations, and foundations goes to these top 400, so what can we learn from them?

The lessons are a bit hard to uncover given the wide diversity of organizations represented on the list, primarily universities, social services, and health/medical,, followed closely by religious, youth, and education.  Topping the list are:

  1. United Way Worldwide, $3.9B raised in 2011
  2. Fidelity Charitable, $1.7B
  3. Salvation Army, $1.7B
  4. Catholic Charities USA, $1.6B
  5. Task Force for Global Health, $1.1B

Museums are scattered among the 400, but you’ll quickly grasp what types of museum are attracting the most attention (it’s not historic sites):

  • 121. Huntington Library, Art Collections, and Botanical Gardens, $177M
  • 126. Metropolitan Museum of Art, $164M
  • 128. Smithsonian Institution, $161M
  • 234. Museum of Modern Art, $90M
  • 285. Museum of Fine Arts, Houston, $74M
  • 292. Art Institute of Chicago, $72M
  • 293. American Museum of Natural History, $72M
  • 305. Museum of Fine Arts, Boston, $67M
  • 321. Museum of Nature and Science (Dallas), $63M
  • 335. Whitney Museum of Art, $60M
  • 381. United States Holocaust Memorial Museum, $51M
  • 385. San Diego Zoo, $51M

According to the Chronicle, “the organizations that did the best in fundraising in the past year relied heavily on the wealthy, pursuing big gifts and promoting bequests and other planned gifts.  Many of the groups are also cultivating young people and overseas donors as well as creating inventive ways to connect with donors emotionally.”  Some extended their capital campaigns, such as the Huntington Library, and others have developed memorable experiences for donors, such as the behind-the-scenes tours at the San Diego Zoo or special out-of-town events for alumni of Stanford University.  These successes may be short-lived, however.  A survey sponsored by Bank of America reported that half of the 700+ wealthy donors who responded don’t plan to increase their donations in the next five years and 9 percent have plans to decrease their giving.  This could certainly worsen if Congress adopts a potential $50,000 cap on tax deductible donations as part of its efforts to avoid sequestration.

One type of charity that is growing like a weed are “commercial funds” or “donor-advised funds“–a program where multiple donors pool their contributions in a centrally-managed fund, become eligible to take an immediate tax deduction, and then recommend grants to be distributed to qualified nonprofit organizations.  It allows donors to maintain control over their funds while enjoying a tax deduction and professional management at a lower cost than establishing their own foundation.  In Philanthropy 400, the top commercial funds include:

Most of these commercial funds base their decisions on donor wishes, so they typically do not accept funding proposals or applications.  Instead, you need to ask a potential donor if they would like to recommend a grant from their donor-advised fund (you don’t know who has one unless you ask) or provide a box on your pledge form that says, “I intend to recommend this amount from my donor-advised fund.”  Secondly, you may want to consider how you may be able to attract donors by allowing them to be more involved in making decisions about their gifts without jeopardizing your ability to fulfill your mission and  manage your organization (how about an internal donor-advised fund for landscape preservation?).

Finally, the Chronicle mentioned a study by the Nonprofit Research Collaborative on the ten ways that boardmembers can help raise funds, such as making personal introductions, asking friends or associates to give, chairing events, and sending a thank you note.  One of the major differences between small (<$250K) and large nonprofits (>$1M) is the extent that boardmembers will make personal visitors to prospective donors, allow their name to be used in fundraising letters, host events in their home or business, and rate donors.  The NRC also identified that the most successful strategies for involving board members in fundraising are training and education, providing clear opportunities to know and experience the organization’s work, providing events that offer clear fundraising successes (such as a thank-a-thon), and customization (working with each board member to identify what he or she can specifically do to raise funds).

For more more details on Philanthropy 400, including trends, case studies, and data, visit the Chronicle of Philanthropy online or pick up a copy of the October 18, 2012 issue.

One thought on “What We Can Learn from America’s Biggest Non-profits?

  1. Laurie

    Great post, Max! The CP data seem to validate some earlier studies (by Pew, I believe, among others) indicating a clearly defined, increasingly entrenched “elite” in the nonprofit world. While the fundraising scope of most historic sites (with a handful of notable exceptions — looking at you, Mount Vernon & Monticello) is somewhat circumscribed by location (among other things) it’s also troubling to see such clear evidence that historic preservation — a national issue — has completely failed to attain a truly significant level of committed engagement with donors. Why do you think that is so?

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