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January 28, 2016 By Helen Brown 1 Comment

Cracking the 2% nut

Is there a link between income inequality and philanthropic giving stagnation?

Chris Carnie, chair of the UK prospect research firm, Factary, thinks there might be. In his recent blog post, Chris writes about middle donors, the lifeblood of every nonprofit:

Carnie pull-out quote 160128It’s an interesting point.

Over here in the United States, the middle class is shrinking to its smallest cohort since 1971. According to the Pew Research Center, that statistic actually carries a small amount of good news in that there has been a greater shift of families moving up economically than down. The down side is that there is less wealth to go around for the 80% left in the middle, lower-middle, and lowest income tiers.

And just like the UK, charitable giving in the United States is also static; here it’s been around 2% of gross domestic product since record-counting began in the 1970s. Is that stagnation related solely to economic factors? Or is there more?

In an opinion piece on the Chronicle of Philanthropy (CoP) website this week, Kevin Murphy, immediate past chair of the board of directors of the Council on Foundations suggests that the problem with stagnation of giving in our sector is simply not reaching high enough. He argues that the philanthropic sector needs to band together in support of a common goal:

“Instead of focusing on narrow tax incentives, it’s time for charities and foundations to set national goals for increasing the amount that Americans give to nonprofit organizations.

For as long as records have been kept, charitable giving has remained stuck at about 2 percent of the gross domestic product. There may be a lot of reasons that we’ve never grown that number, but one surely is that we’ve never set a bigger national goal.

As we open a year of presidential elections — and much deliberation about the state of the country — it’s the right time for nonprofits to decide we will work together to increase charitable giving to at least 3 percent of our gross domestic product in the next three years.”

But who would fund and organize (and run?) that amorphous campaign? And would it work?

History shows that the answer is no.

Suzanne Perry in the CoP article “The Stubborn 2% Giving Rate” writes:

“[E]ven in the best of times, organized efforts to get people to give more have sputtered.

Independent Sector, a coalition of charities and foundations, led a sustained campaign in the late 1980s and early 1990s to get everyone to increase their donations. Known as Give Five, it placed magazine, radio, and television ads urging Americans to donate 5 percent of their gross incomes to charity—up from the average of about 2 percent that its surveys showed individuals were giving then.

The effort attracted millions of dollars in foundation money and spawned dozens of local efforts around the country. The Advertising Council adopted the campaign, soliciting free services from ad agencies. It had a logo (a circle with a small 5-percent wedge highlighted) and slogans like “Give Five: What You Get Back Is Immeasurable.”

But it didn’t work.

“There were a few blips where it went up a little bit, but there was never any real measurable, strong increase,” says John Thomas, who was vice president for communications at Independent Sector at the time. One problem, he suspects: Giving is a “very personal thing,” and some people didn’t like being told how much they should give.”

So what’s the answer?

Jay Love, CEO of Bloomerang and chair of the AFP Ethics Committee argues that there are five pragmatic, fixable factors blocking the growth of charitable giving.

  • Hesitancy to invest in infrastructure
  • Blind adherence to legacy fundraising tactics
  • Lack of proper testing of fundraising methods
  • Lack of proper training
  • Poor donor retention

On that last point, Love says:

“[A]s long as the average nonprofit organization has an overall donor retention rate below 50%, the 2% of GDP barrier will not budge.

Just think what an overall rise in the donor retention rate of merely 10-15% would do for overall dollars raised, if all other factors remained constant. We could see the dollars raised percentage of the GDP growing to 3 or 4% over time!”

Naturally, I think prospect development has a large part to play.

There are more than 1.6 million nonprofit organizations in the US and the sector has been growing exponentially (according to the Urban Institute, the number of nonprofits in the United States grew 25 percent between 2001 and 2011).

With all of that growth, there are fewer than 5,000 prospect development professionals in our industry.  (I’m counting APRA, AASP and RiF’s membership numbers and guesstimating the number of professionals who aren’t current members). Even if you take away half of the 1.6m number to accommodate for associations and grant-giving organizations, that’s one prospect development professional for every 160 nonprofits.

No wonder we can’t get any traction!

When you consider the huge impact that prospect development has brought to organizations that have invested in it, Jay Love’s arguments 1 through 4 clearly apply. Prospect development is only one piece of the professional fundraising toolkit, but it’s as important as every other necessary cog in the machine.

In fact, I believe that it’s one of the critical pieces that will help the nonprofit industry move forward, because we can help answer those pragmatic needs.

Reading these articles and opinions, it’s clear there are multiple reasons why we’re losing ground on middle donors. But to paraphrase Chris Carnie, there is an increasing number of wealthy people out there, and a lot more people in the world who need their help.

We need to borrow fundraising tactics, like prospect development, from others that are working, be courageous, and forge new paths for others to follow. Maybe if we do, 2016 will be the year we crack the 2% nut.

Filed Under: Campaign Success, Non-profit trends, Strategic planning Tagged With: Chris Carnie, Chronicle of Philanthropy, Jay Love, Kevin Murphy, Pew Research Center, Suzanne Perry

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Josh began his career in development as the Phonathon Coordinator at Keene State College. He then worked at non-profit consulting firm Schultz & Williams in Philadelphia.

He started his research career at the University of Pennsylvania as a Research Assistant in 2005. He then moved over to the Wharton School of Business, where he became the Associate Director, Research and Prospect Management. Josh joined the Helen Brown Group in 2016.

Josh is also a Colorado licensed Realtor and graduate of Lehigh University.

In March 2017, Kristina joined the Helen Brown Group as a Research Associate. Before joining HBG, she was the Research Manager at Pratt Institute in Brooklyn and an Associate Manager of Prospect Research at City Harvest, a food rescue organization. Kristina started her non-profit career as a legal assistant at the Metropolitan Museum of Art in 2004.  She is a member of Apra and Apra Greater New York. She was Apra Greater New York’s Director of Programming from June 2014 to May 2016. Kristina graduated from The University of Chicago and the Bard Graduate Center.

Grace began her career in development in 2001 as Executive Assistant to the Chief Development Officer with Brigham and Women’s Hospital (BWH), a Harvard Medical School-affiliated academic medical center.

In 2003, she became a prospect researcher for the BWH principal and major gifts team and spent the next 11 years in various research positions with BWH, culminating as Assistant Director of Prospect Research. She has been affiliated with The Helen Brown Group since January 2014.

Heather began her career in 2002 as a prospect research coordinator for the Rocky Mountain Elk Foundation and then moved to Carroll College in 2004.

In 2005, Heather began working on her own as a freelancer and eventually started her own consulting firm, Willis Research Services, in 2007. She joined The Helen Brown Group in 2012.

Heather is a member of the Association of Professional Researchers for Advancement and the Montana Nonprofit Association.

Jennifer began her career in development at her alma mater, Wheaton College, where she was an administrative assistant for the major gifts department.

She joined The Helen Brown Group in March 2008. She earned a master’s degree in library science from the Southern Connecticut State University in May 2009. Jennifer is a member of APRA and NEDRA.

Rick has been a member of the Helen Brown Group team since 2005. Prior to joining HBG, Rick was director of research at St. Paul’s School in Concord, New Hampshire. Rick has worked in development since 1996, both in prospect research and major gifts fund raising. His experience includes the University of Vermont, Phillips Exeter Academy and St. Paul’s School.

Rick is past president of NEDRA and is a member of and frequent volunteer for APRA.

Josh began his career in development as the Phonathon Coordinator at Keene State College. He then worked at non-profit consulting firm Schultz & Williams in Philadelphia.

He started his research career at the University of Pennsylvania as a Research Assistant in 2005. He then moved over to the Wharton School of Business, where he became the Associate Director, Research and Prospect Management. Josh joined the Helen Brown Group in 2016.

Josh is also a Colorado licensed Realtor and graduate of Lehigh University.

Mandi has worked in prospect research and management since 2006. She began her development career as a research analyst in development research at City of Hope, an NCI-designated comprehensive cancer center in Los Angeles. From there, she became the manager of prospect development at Huntington Memorial Hospital, a community hospital in Pasadena, CA. Most recently, she was the associate director of prospect research and management at Occidental College, a private liberal arts college in LA.

Mandi has a BA degree in print journalism from Southern Methodist University and a master’s degree of library and information science from UCLA.

She joined the Helen Brown Group in May 2019.

Kelly began her career in development in 2008 as an administrative assistant in Major Gifts at Wheaton College.

In 2010, she became a research analyst at Dana-Farber Cancer Institute in the Division of Development & Jimmy Fund as part of the prospect identification team. Kelly joined The Helen Brown Group in 2013.

She is a member of APRA and NEDRA.

Jayme began her career in development in 2008 at the Rutgers University Foundation, where she spent the next seven years, first in prospect management and then prospect research. She spent several years at Monmouth University as their senior prospect research analyst, working with the fundraising staff, university president, and top leadership. She has worked as both a volunteer and consultant for non-profits in the areas of research and writing.

She earned a bachelor of arts degree from Drew University and a master of communication and information sciences from Rutgers University. She is a member of APRA.

Jayme joined The Helen Brown Group in April 2019.

Julie has managed finances for The Helen Brown Group since its founding.

In her spare time, she is an editor for the PBS series Masterpiece at WGBH. Julie was nominated twice for an Emmy award for her work on the PBS show Zoom.

Heather began her career in development in 2001 as a prospect researcher for National Wildlife Federation (NWF). She was with NWF for more than thirteen years, including nearly five years as director of research and analytics. Heather is a former secretary of the board of directors of APRA-Metro DC.

She joined The Helen Brown Group in October 2014.

David began his career in development at The Gunnery school in northwest Connecticut in 2011, where he worked in database management and prospect research. Subsequently, he joined the College of Saint Rose as a development research analyst before leading Albany Medical Center Foundation’s prospect research efforts as Associate Director of Prospect Research. He has a Bachelor’s Degree in Sociology from Siena College and is a member of APRA and CASE.

Michele began her career in development in 2012 when she joined the UC Berkeley corporate and foundation relations team as a development analyst. She spent a year and a half at Cal before returning to UC Davis as a prospect analyst. She was with the prospect management and relations team at UC Davis for almost three years prior to joining the research and relationship management team at George Washington University as a Senior Prospect Analyst in 2016.

Michele received her BA in creative writing from Florida State University and her MA in higher education leadership from CSU Sacramento. She currently resides in Northern Virginia, is a member of Apra International, and serves as the social media chair for Apra Metro DC. Michele joined The Helen Brown Group in July 2018.

Kenny has worked in development since 1999 and has been involved in prospect research since 2002. Prior to joining The Helen Brown Group, he was the director of

Prior to joining The Helen Brown Group, he was the director of donor and prospect research at the United Way of Massachusetts Bay. Kenny is a member of APRA and NEDRA.

Angie has worked in development since 2002, partnering with a wide range of nonprofit institutions. She began her professional career at Vanderbilt University in research and prospect development.

She has also worked with a number of community nonprofits in front-line fundraising, grant-writing, and event management. Angie holds an MPA in Nonprofit Management from the Indiana University Lilly Family School of Philanthropy and a BS in Journalism from Middle Tennessee State University. She resides in Nashville, Tennessee, and is a member of AFP Nashville and APRA MidSouth, where she has been active on the executive team.

She joined The Helen Brown Group in October 2015.

Tara began her career in development in 2002 on the major gifts team at Simmons College, where she ultimately served as assistant director of prospect research.

Since that time, she has worked as a senior research analyst at MIT, as associate director of prospect management and research at the Harvard Graduate School of Education, and most recently as director of development research at Combined Jewish Philanthropies (CJP). Tara originally joined the Helen Brown Group team in 2007 and served as a research associate and ShareTraining coordinator until 2008 – she rejoined the company as a senior researcher in 2013.

Tara currently serves as vice president of the New England Development Research Association (NEDRA), where she chairs the Website and Technology Committee and formerly served as editor of NEDRA News. Tara has also been involved with the Membership Committee, Chapters Committee, and Bylaws Task Force of the Association of Professional Researchers for Advancement (APRA).

Maureen has been a part of the non-profit world since 1991. She started out in annual giving at Harvard Law School and continued her career as director of annual/special gifts at UC Santa Cruz.

In 1999 she made the switch from front-line fundraising to serve as director of prospect research/management at Bentley University and in 2001 began her role as administrator for the North American Foundation for the University of Manchester. She became part of the HBG team in September of 2011.

Helen has been a development professional since 1987. Her previous experience includes The University of North Carolina at Chapel Hill, the Albert Einstein Institution, Boston College, the Harvard School of Public Health and Northeastern University.

Currently she works with a variety of clients to establish, benchmark and re-align research departments; identify major gift prospects; and train researchers and other fundraisers through on-site and web-based training services.Helen is a former member of the board of the Association of Professional Researchers for Advancement (APRA) and is past president of the New England Development Research Association (NEDRA). In 2006 she received the NEDRA Ann Castle Award for service to the prospect research community.

Helen is Special Advisor on Fundraising to the North American Foundation for the University of Manchester and is a member of the board of directors of Factary Ltd. (Bristol, UK). She is a member of NEDRA, APRA, the Association of Independent Information Professionals (AIIP), Women In Development, the Association of Fundraising Professionals (AFP) and Researchers in Fundraising (UK).

Helen is a frequent speaker and has led seminars for a number of professional associations, including Action Planning, AFP, APRA, the Council for Advancement and Support of Education (CASE), NEDRA, RIF, the Planned Giving Council of Central Massachusetts, the Georgia Center on Nonprofits, the International Fundraising Congress and Resource Alliance.

Helen is also co-author (with Jen Filla) of the book, Prospect Research for Fundraisers (Wiley & Sons, 2013).

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