• November 22, 2014

Year-End Giving Yields Healthy Increases for Many Nonprofits

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The crucial year-end giving season appears to be producing big increases in donations for many charities.

In a spot check of 20 charities, all but one said they were raising more during the last quarter of the year than they did before the fall of 2008, early in the financial crisis. And online donations also show signs of a healthy giving season, according to Network for Good, an organization that is providing day-by-day donation totals to The Chronicle. Giving has risen 17 percent from November 1 to December 15, according to the organization’s comparison with giving during the same period in 2012

Rich Donors Giving More

Affluent donors appear to be stepping up their giving the most.

Schwab Charitable, which offers donor-advised funds, received $962-million from January through November of this year, an increase of nearly 80 percent over the same 11 months in 2012.

Kim Laughton, Schwab Charitable’s president, says the growth in the stock market is a key reason for the rise because many of the fund’s donors make gifts of securities.

She also says that people are giving significantly to reduce the effect of increases in tax rates for the wealthiest Americans that took effect in January.

“It is so much better for charities when the market is healthy at the end of the year,” says Ms. Laughton. “A great market and higher tax rates have driven a lot of our growth.”

Other charities that offer donor-advised funds also report a surge in year-end donations.

As of this week, the Greater Cincinnati Foundation has raised $46.5-million since January 1, an increase of $3.3-million over the same period last year. “It’s encouraging to see we are ahead,” says Amy Cheney, vice president for giving strategies. “The market being strong right now has to be a big help with people’s confidence.”

Indeed, some donors are giving appreciated securities now because they fear that recent stock-market gains won’t last through 2014, says Jeremy Wells, vice president for philanthropic services for two community foundations, the Saint Paul Foundation and the Minnesota Community Foundation, which together expect to raise about $65-million this year.

“We have seen a nice increase in new funds from donors, up by about 20 percent,” says Mr. Wells. “They think the market may at best plateau in the coming year. We are hearing that from a lot of donors.”

IRA Gifts Popular

Several organizations say a provision allowing people to donate money tax free from their individual retirement accounts is also brightening their year-end fundraising.

“We have seen a lot of major gifts coming from IRAs,” says John Osterlund, chief development officer at Rotary International. “A major gift for us is $10,000, and we are getting a lot of these from IRAs.”

Such gifts, he says, have helped drive a 10-percent increase in donations to Rotary’s annual fund since July 1, when the charity’s fiscal year began. And contributions to Rotary’s signature work to fight polio are up by 15 percent, the result of a matching gift from the Bill & Melinda Gates Foundation. That donation, announced this year, will provide $2 for every dollar given to fight polio, up to $70-million in 2013.

“We have been raising money for polio for almost 30 years, and our donor base was pretty fatigued,” Mr. Osterlund says. “This match from Gates has been helpful in energizing a fatigued donor base and attracting new donors.”

Planning Ahead Helps

It’s not just charities that rely on the rich that are doing well, however. After the Salvation Army said it expected to raise just $128-million in its traditional Red Kettle campaign, $20-million less than last year, many local Salvation Army units have found ways to increase giving.

The Kansas and Western Missouri division, for example, planned ahead to offset the shorter than usual period between Thanksgiving and Christmas this year.

Losing a week from its Christmas campaign, which provides 70 percent of the region’s revenues for the year, has so far led to a $220,000 shortfall in a Red Kettle drive that typically raises $1.6-million.

But the charity expects to more than make up for the decline by asking loyal donors capable of giving $10,000 or more to dig a little deeper this year, says Scott Justvig, the group’s divisional director of development. “We have several big six-figure asks out right now,” he says. “It is still early, but we think major gifts will be over $3.2-million this year, when we usually raise about $2.7-million.”

Mr. Justvig says his Salvation Army division is also getting a boost by selling a pin called the “season pass,” which donors can buy for $20, $50, or $100. When the pins were sold last year, they raised $27,000, and Mr. Justvig expects the idea to bring in even more this year.

But the pins are not just about raising money. They also get attention for the charity and show donors how much gifts that are bigger than the small sums typically dropped into the kettle mean to the charity.

Bell ringers who collect donations for the Salvation Army at shopping centers and grocery stores have been trained to look for people wearing the pins and enthusiastically thank them for supporting the charity, Mr. Justvig says.

“This has really engaged our board members,” many of whom have not only bought pins themselves but sold them to others, Mr. Justvig says. Another new fundraising effort is attracting more young people to volunteer as bell ringers at Red Kettles in Kansas and Missouri. The charity is offering high-school students a chance to compete for eight $1,000 college scholarships, subsidized by the charity’s board members, if they solicit donations. Awards will go to the volunteer solicitors who write the best essays on volunteering, which will be judged by a team of Salvation Army and supermarket officials.

So far the competition has drawn about 130 students who will provide 300 additional hours of Red Kettle solicitations “Every day we are getting more participants,” Mr. Justvig says. “We needed bell ringers, and volunteers always raise more money than paid bell ringers.”

Recession Still Hurts

Not every charity that relies heavily on year-end donations has recovered from the 2008 recession. At the Marine Toys for Tots Foundation, officials say that the number of donated toys has been down since the economy soured.

And even charities that are chalking up big gains say the economic downturn is still influencing their donors.

Stetson University, halfway through its current fiscal year, has already raised $13-million, up from $11.6-million in the previous 12 months, because the university is beginning a capital campaign.

But even with donations on the rise, “there is still reticence about multiyear pledges,” says Carol Julian, Stetson’s vice president for university relations. “People are committed to their favorite charities, but long-term commitments are still harder.”

Raymund Flandez contributed to this article.

Go deeper: See more news and ideas about year-end fundraising.

By Holly Hall

The crucial year-end giving season appears to be producing big increases in donations for many charities.

In a spot check of 20 charities, all but one said they were raising more during the last quarter of the year than they did before the fall of 2008, early in the financial crisis. And online donations also show signs of a healthy giving season, according to Network for Good, an organization that is providing day-by-day donation totals to The Chronicle. Giving has risen 17 percent from November 1 to December 15, according to the organization’s comparison with giving during the same period in 2012

Rich Donors Giving More

Affluent donors appear to be stepping up their giving the most.

Schwab Charitable, which offers donor-advised funds, received $962-million from January through November of this year, an increase of nearly 80 percent over the same 11 months in 2012.

Kim Laughton, Schwab Charitable’s president, says the growth in the stock market is a key reason for the rise because many of the fund’s donors make gifts of securities.

She also says that people are giving significantly to reduce the effect of increases in tax rates for the wealthiest Americans that took effect in January.

“It is so much better for charities when the market is healthy at the end of the year,” says Ms. Laughton. “A great market and higher tax rates have driven a lot of our growth.”

Other charities that offer donor-advised funds also report a surge in year-end donations.

As of this week, the Greater Cincinnati Foundation has raised $46.5-million since January 1, an increase of $3.3-million over the same period last year. “It’s encouraging to see we are ahead,” says Amy Cheney, vice president for giving strategies. “The market being strong right now has to be a big help with people’s confidence.”

Indeed, some donors are giving appreciated securities now because they fear that recent stock-market gains won’t last through 2014, says Jeremy Wells, vice president for philanthropic services for two community foundations, the Saint Paul Foundation and the Minnesota Community Foundation, which together expect to raise about $65-million this year.

“We have seen a nice increase in new funds from donors, up by about 20 percent,” says Mr. Wells. “They think the market may at best plateau in the coming year. We are hearing that from a lot of donors.”

IRA Gifts Popular

Several organizations say a provision allowing people to donate money tax free from their individual retirement accounts is also brightening their year-end fundraising.

“We have seen a lot of major gifts coming from IRAs,” says John Osterlund, chief development officer at Rotary International. “A major gift for us is $10,000, and we are getting a lot of these from IRAs.”

Such gifts, he says, have helped drive a 10-percent increase in donations to Rotary’s annual fund since July 1, when the charity’s fiscal year began. And contributions to Rotary’s signature work to fight polio are up by 15 percent, the result of a matching gift from the Bill & Melinda Gates Foundation. That donation, announced this year, will provide $2 for every dollar given to fight polio, up to $70-million in 2013.

“We have been raising money for polio for almost 30 years, and our donor base was pretty fatigued,” Mr. Osterlund says. “This match from Gates has been helpful in energizing a fatigued donor base and attracting new donors.”

Planning Ahead Helps

It’s not just charities that rely on the rich that are doing well, however. After the Salvation Army said it expected to raise just $128-million in its traditional Red Kettle campaign, $20-million less than last year, many local Salvation Army units have found ways to increase giving.

The Kansas and Western Missouri division, for example, planned ahead to offset the shorter than usual period between Thanksgiving and Christmas this year.

Losing a week from its Christmas campaign, which provides 70 percent of the region’s revenues for the year, has so far led to a $220,000 shortfall in a Red Kettle drive that typically raises $1.6-million.

But the charity expects to more than make up for the decline by asking loyal donors capable of giving $10,000 or more to dig a little deeper this year, says Scott Justvig, the group’s divisional director of development. “We have several big six-figure asks out right now,” he says. “It is still early, but we think major gifts will be over $3.2-million this year, when we usually raise about $2.7-million.”

Mr. Justvig says his Salvation Army division is also getting a boost by selling a pin called the “season pass,” which donors can buy for $20, $50, or $100. When the pins were sold last year, they raised $27,000, and Mr. Justvig expects the idea to bring in even more this year.

But the pins are not just about raising money. They also get attention for the charity and show donors how much gifts that are bigger than the small sums typically dropped into the kettle mean to the charity.

Bell ringers who collect donations for the Salvation Army at shopping centers and grocery stores have been trained to look for people wearing the pins and enthusiastically thank them for supporting the charity, Mr. Justvig says.

“This has really engaged our board members,” many of whom have not only bought pins themselves but sold them to others, Mr. Justvig says. Another new fundraising effort is attracting more young people to volunteer as bell ringers at Red Kettles in Kansas and Missouri. The charity is offering high-school students a chance to compete for eight $1,000 college scholarships, subsidized by the charity’s board members, if they solicit donations. Awards will go to the volunteer solicitors who write the best essays on volunteering, which will be judged by a team of Salvation Army and supermarket officials.

So far the competition has drawn about 130 students who will provide 300 additional hours of Red Kettle solicitations “Every day we are getting more participants,” Mr. Justvig says. “We needed bell ringers, and volunteers always raise more money than paid bell ringers.”

Recession Still Hurts

Not every charity that relies heavily on year-end donations has recovered from the 2008 recession. At the Marine Toys for Tots Foundation, officials say that the number of donated toys has been down since the economy soured.

And even charities that are chalking up big gains say the economic downturn is still influencing their donors.

Stetson University, halfway through its current fiscal year, has already raised $13-million, up from $11.6-million in the previous 12 months, because the university is beginning a capital campaign.

But even with donations on the rise, “there is still reticence about multiyear pledges,” says Carol Julian, Stetson’s vice president for university relations. “People are committed to their favorite charities, but long-term commitments are still harder.”



Raymund Flandez contributed to this article.

Send an e-mail to Holly Hall.

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