Helen Brown Group

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A DAFinitive answer

It’s Research Pride Month, and boy oh boy do we have a celebration going on at the Helen Brown Group! If you have no interest in donor advised funds, you might want to skip today’s article and wait for next week.

But if you are, let me tell you what the party’s all about here at HBG:

A couple of years ago I got really frustrated by the lack of information about DAFs.*

It was a constant struggle for me and my team to find out:

  • Who are the people with DAF accounts?
  • When we’re researching a potential donor, how can we find out if they have a DAF so we can let our client know?
  • Why isn’t it possible to find DAFs based on their philanthropic interests? Or their geography?

So a few members of the HBG team and I began building a database of donor advised funds to use as a lookup when we did research for our clients.

And it started to grow. And grow. Ten thousand funds. Twenty thousand funds. Forty thousand funds. Fif…holy cow!

About a year ago it dawned on me that this would be helpful to researchers everywhere. Not just us at HBG, but a research resource created by prospect researchers for prospect researchers. Or for anybody, really, who is interested in DAFs and their donors.

It’s finally here and we’re ready – and super excited – to show it off to you. It’s called DAFinitive™.

What can you do here? Well, check out the search page:

  • The keyword box searches the entire database. That includes every field you see here as well as additional fields you don’t, like notes we might have found about the fund.
  • Or, you can search by the last name and first name of a donor or fund administrator.
  • Want to search for a list of DAFs in Florida that have an interest in animals? You can do that.

Is every DAF in DAFinitive™? Absolutely not, but we do have about 5% of the roughly one million DAFs estimated to be in existence, and we’re adding at least 1,000 funds every week.

We’re elbow-grease searching for those tough-to-find funds, too (you know the ones I mean…the ones held by sponsors that rhyme with Schwidelity and Billicon Salley that don’t list their funds anywhere aargh). Fair warning – if you’re thinking DAFinitive™ is going to solve your Fidelity-Charitable-is-a-black-box problem, I’m sorry, we’re not there yet. We do have a few of those funds – and growing, though.

That said, we’re happily crowdsourcing from everyone in the research community (hint hint!) who sends us a fund name and a URL to confirm it so if you want to see a fund in DAFinitive™, send it along!

Do we know how much is in each fund? No, but much to our surprise we did find a couple of sponsors that actually did list how much (or a range of how much) was in each fund account – that was a yahoo moment! And you might be as interested as we were to learn that the average fund size held in those commercial sponsors (like Fidelity and Schwab) is lower – by a lot – than in community or single-issue sponsors. (Check out the facts and figures below).

If you want to know more about DAFinitive™, there are lots more FAQs on the front page of the site (www.DAFinitive.com) – take a look to learn more.

Thanks for sharing my excitement! A heartfelt and massive thank you to the absolutely amazing beta testers who gave us honest and helpful feedback to bring DAFinitive™ to the launch pad.

Happy Research Pride Month!

*Not familiar with DAFs? Here’s a bit more information for you!

DAFs are philanthropic bank accounts that just about anyone can set up with one of the 976 sponsoring organizations in the US. Sponsors are regional community foundations, the nonprofit arm of a for-profit financial institution (also known as “commercial sponsors” or “national sponsors”) or a single-issue sponsor (like a university, religious-based community fund, etc.).

The donor gets a tax deduction when they deposit money into the account, and then they advise the sponsor to make donations from that account when they’re ready.

Lots of times information about those funds (and particularly about the donors) sits in a big black box. Many of the commercial DAF sponsors don’t publish anything about the funds they hold, and it’s hard for nonprofits to find out if someone has a DAF unless they make a gift. (And sometimes even then the nonprofit doesn’t find out who directed the gift if the sponsor doesn’t include that information with the donation!)

Want to know more about DAFs? Giving USA just released a fascinating report that is a must-read. Here are some key points from the report:

  • Many DAF accounts have multiple donors or administrators that make gifts from the fund. Vanguard Charitable reported in 2016 that 61 percent of their funds had both male and female donor/administrators.
  • DAFs provide much less of an administrative headache than setting up a personal or family foundation, and in recent years an increasing number of foundations have rolled their assets into DAFs.

Don’t miss the 2021 DAF Report, either, from the National Philanthropic Trust (NPT). 2021 marked their eleventh annual report about DAFs, and this edition holds some fascinating information. For example:

  • “Grants from DAFs to qualified charities totaled an estimated $34.67 billion, representing a 27.0 percent increase compared to 2019 and a new high-water mark. This is the highest DAF grant increase in a decade.”
  • In 2006 there were 160,000 donor advised funds in the United States with assets of about $31 billion. NPT reports that as of 2021 that number now stands at over 1 million funds with assets of nearly $160 billion. The majority of them are held with commercial sponsors (approximately 864,099), with another estimated 84,334 held at community foundations and 56,666 at single-issue charities.
  • The average size of a DAF account across all sponsor types is $159,019 but that average varies quite a bit between them. The average amount in a commercial-sponsor DAF is $115,901; in a community foundation it’s $543,553, and in a single-issue sponsor is $244,238.

 

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The RiF Prospect Research Handbook is out today!

Lots of times we might have a brilliant idea to nudge forward (or perhaps even revolutionize) our profession, but then we think, ugh, is it worth it? That would take forever! And we go back to whatever it was we were doing before our daydream.

Fortunately for all of us that’s not what happened back in 2019 when Ben Rymer, then chair of Researchers in Fundraising (RiF), dreamed up the bold idea to create a soup-to-nuts Prospect Research how-to Handbook. In case you’re not familiar with RiF, it’s the professional association for prospect researchers in the UK. Just like Apra here in North America, RiF has a great conference every year (theirs is in November in London) as well as gatherings throughout the year.

The RiF Handbook (available today!), called Researchers in Fundraising: Best Practice Guide and Handbook for Prospect Research has been a labor/labour of love for many of us in the prospect research community. I was lucky enough to be one of the volunteer editors for a segment or two, and I was impressed at what a well-run machine it was, and what a great job that the project’s manager Ally Lee-Dudley, founder of Adcumulo, did of keeping the operation running so smoothly.

I was interested to learn more about the Handbook and the process of creating it, so I got in touch with Ben, Ally, and Chris Davis, RiF’s current chair, to find out more. Sincere thanks to Ben, Ally, and Chris for sharing these great insights!

Helen: Ben, how did the idea come about to do a Handbook for prospect researchers?

Ben Rymer: When I sent the initial proposal to the Chartered Institute of Fundraising (CIoF) in August 2019, I’d known for a while that a handbook/textbook/how-to guide was needed. My feeling was that prospect research was still something of a trade, rather than a profession or discipline. We have a huge amount of expertise, experience and goodwill in the community, but it had never completely crystallised into a finished product so we could build on and improve existing good practice.

HB: What was your initial plan for the scope of the project, and did that change at all as it evolved?

BR: All I knew was that the main areas of research practice should be included. Basically I wanted to create something that I would’ve found practically useful in my first job in the sector. We cast the net wide in starting, with plans for 23 chapters. The big trade-off since then has been in response to volunteer availability. All the content is crowd-sourced, and so we have to work in sequence with the expertise of volunteers who come forward … Also, Covid hit a short time after project kick-off, but we pivoted to remote working pretty well, thankfully.

HB: Ally, how did you get involved with the project?

Ally Lee-Dudley: My involvement with the project began in January 2020 when the Steering Group were looking for a Project Manager to move the Handbook from a great concept to a work in progress. At this time there were not yet any structures, processes, or resources in place so this really was the beginning of the Handbook as an active project.

HB: How many volunteers were part of it?

AL-D: To date around 90 volunteers have contributed to the Handbook, some as writers, some as editors, some as beta-readers, as some as micro-volunteers. Volunteers come from 3 different continents, and around a dozen different countries making the volunteer effort an international collaboration.

HB: How many chapters are there, and how was the decision made on which topics to include?

AL-D: At launch, 8 chapters are available for readers plus a Resource Director and Glossary of industry terms and phrases. There are another 7 chapters in progress which will be published as and when they are completed and a further 11 chapters that are yet to be started. Publishing content on a staggered basis like this means we are able to start getting useful content out and into the prospect research community far more quickly than if we wait for a ‘complete’ Handbook. The original list of potential chapters was developed through discussions between the volunteers who make up the RiF Committee. Over time several additional chapters have been added to that list as a result of suggestions made by volunteers involved with the project.

HB: Chris, as the scope of the project evolved, what changes did that cause you to make?

Chris Davis: As we added more chapters to the Handbook, we found ourselves looking beyond our immediate peer group for input and advice, to those with specific expertise or lived experience. For example, in our chapter on Strategic International Prospecting, we were aware that we needed to get as much input as possible not only from researchers with extensive knowledge of international prospect research, but also from those with experience of living or working in different countries and communities. This was definitely a challenge, but I hope we got the balance right! Similarly, when we start work on the chapter on Equality, Diversity & Inclusion in Prospect Research we’ll be seeking involvement from those who are experts in the ED&I space.

HB: What surprised you most about the process, or what created the most changes or opportunities as things went along?

CD: I think I was surprised by how much content we ended up generating! I knew that the prospect research community would be hugely generous with their time and knowledge, but I was still taken aback at times by the volume of work we ended up producing. At this point I’d have to give a big shout out to our beta-reading and editing volunteers, who were a major help in clarifying and refining the chapters and getting them to where they are now.

HB: Ben, what do you think are the top 3 things that readers will find that might surprise them?

BR: 1. Reach: it is a big thing! Chapters I’ve worked on have ended up being 10,000-20,000 words long. We also have a very broad range of topics, so I think readers will be pleasantly surprised at that.

  1. What’s still to come: by the same token, there are some big chapters in the pipeline, so reader may be left waiting for those. If anyone has suggestions, please feel free to get in touch via the Handbook website, www.rifhandbook.info.
  2. Quality: we’ve put a lot of effort into making the content as good as it can be. For a wholly volunteer-generated initiative I think it is a solid product, but I’m biased of course!

HB: Chris, what do you think are the top things that you think readers will find most useful in the Handbook?

CD: I think that will be different depending on the needs and experiences of readers – throughout the Handbook we’ve tried to ensure that content is relevant for both those who are new to prospect research and for experienced researchers who are looking to innovate and upskill.

For early-career researchers or those who are setting up a prospect research function, we hope our New Researchers Guide chapter and the chapter on The Prospect Research Role will be invaluable. Within the Data & Skills Domain of the Handbook, there is some very detailed, nuanced, and in-depth content on estimating wealth and assigning capacity ratings – topics that we know are of eternal interest to prospect researchers and fundraisers alike!

Finally, we’ve made extensive use of case studies throughout the Handbook, drawn from the real-life experiences of researchers. We hope these will really bring the content the life and illustrate how the principles and techniques outlined in the Handbook can be applied practically.

HB: Chris, what did you enjoy most about the process?

CD: I’ve really enjoyed the experience of being involved in creating content for the Handbook, especially the early stages of this where you are exchanging knowledge with your peers. I’ve been working in prospect research for over a decade, but being involved with the Handbook has absolutely encouraged to rethink some of my settled views about the work that we do, and how we do it. I think the Handbook does reflect this process of peer exchange, and I hope that everyone who uses it will find something new and different in there that challenges their assumptions.

HB: Ally, What tools did you use for collaboration on this massive project and how well did they work? If you had another large collaborative project to undertake, would you use the same tools?

AL-D: The Handbook was always intended to be primarily a remote project, so in that sense we were lucky and the pandemic didn’t significantly affect our plans. In order to help ensure both accessibility of tools at no cost for volunteers and to help embed project sustainability by keeping the financial burden of the project low for RiF, we’ve largely drawn on tools that are available for free. As a Steering Group, our project management hub is a tool called Freedcamp, and this enables us to plot and track actions, deadlines, and milestones and assign task accountability at a strategic level.

For the Handbook’s wider volunteer community, the free version of MS Teams is our collaborative workspace. Teams provides us with a place to create, share, and store documents such as meeting agendas and action plans, and to work collectively on producing and editing content in real-time whilst being able to communicate quickly and easily with each other. Within Teams volunteers can access the web versions of MS Word and Excel so we’re all using the same tools to ensure compatibility plus there is in-build versioning history and storage back-up for those ‘just in case’ moments.  We’ve recently made the switch from using Zoom for our regular meetings to using MS Teams’ video calling service; it doesn’t quite have all the same features as Zoom but it does come at zero cost rather than requiring a subscription to hold meetings for small groups for up to an hour at a time.

The Handbook itself is created using a custom-made WordPress website. We chose the route of e-publishing over hard copy for several reasons and the WordPress platform, with its almost unlimited flexibility and versatility, is the best fit to meet the Handbooks needs both now and in the future. As an e-publication it is not only much easier to keep the Handbook content up to date, it is also far simpler to ensure its availability to readers around the world who can access the content from any device with a web browser.

Overall, aside from the usual occasional IT glitch, (we’ve done the equivalent of turn it off and on again once or twice), the tools we’ve chosen have been effective and created not only a conduit for remote productivity and development, but also a space to come together a a community and experience that sense of being part of a team working towards a common goal that is so important to the Handbook.

Many thanks again to Ben, Chris, and Ally for sharing the inside scoop on the RiF Prospect Research Handbook, and for all of the hard work and coordination that went into creating it! Check out the Handbook website at www.RiFHandbook.info. If you would like to be a volunteer writer or editor for future chapters, please visit this page to learn more.

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Resilient nonprofits can face anything

Heather Willis

HBG Senior Consultant Heather Willis

It hasn’t been too difficult to find articles in the press about the success or failure of companies to survive (or, indeed, thrive) during the past 18 months, but what about nonprofits? How have they fared? And for the ones that have been successful, what has been their secret? This week my colleague Heather Willis does a fantastic job of walking us through a series of reports from the Charities Aid Foundation which has surveyed nonprofits across the globe multiple times during the Covid19 pandemic to discover and share the game plan for resiliency in our sector. ~Helen

When the World Health Organization declared COVID-19 a global pandemic in March 2020, Charities Aid Foundation (CAF) America set out on a mission to document the impact of the crisis on nonprofits worldwide. CAF has produced nine surveys and reports since, which represented the voices of 3,500 organizations operating in hundreds of countries and representing 15 causes.

These reports take account of charities around the world that have been performing their duties under extreme pressure. While many organizations have had to close in the last year due to new problems posed by the COVID-19 virus, others that have remained open have showed amazing tenacity and persistence in the face of new challenges.

What CAF found through this research is encouraging and uplifting. There was an expansive picture of persistence, humility, compassion, and empathy. The pandemic has had the counterbalancing impact of bringing the worldwide community closer together for a purpose that transcends borders and cultures, at a time when many people are feeling socially isolated.

In the Beginning

The vast majority (94.84%) of the respondents’ countries imposed coronavirus related restrictions that had an immediate impact on the organizations.

CAF reported in the first survey that 67.93% of the respondents saw a decrease in funding and reported difficulties in reaching donors, while 33.97% indicated an increase in operational costs. More than half were unable to fully meet the expectations of those they serve due to staffing limitations (48.58%) and system-challenges (37.57%). Restrictions on travel, a key programmatic element for many organizations, affected 63% of the respondents’ operations.

Despite the serious challenges, 90.10% of respondents continued to serve their communities. Although they had to suspend certain activities, almost two thirds of the organizations surveyed (61.87%) continued their operations remotely and 28.23% maintained full operations (11.03% working in office and 17.20% working remotely).

Mid-Pandemic

Volume 5 reports that the majority of responding organizations, 97.16%, were able to maintain their operations, and another 2.84% were not operating at that time. While the data suggests a marginal improvement compared to the Volume 3 survey in June when 92.47% respondents were operating, the organizations that had to close down during the past months were poorly represented among current respondents.

Of those that closed operations or some programming, the majority indicated the incompatibility of their services and programs with online delivery as their principal reason.

                                                                       Reasons for closing operations or programming

In one three-month time frame, 9.98 percent of surveyed organizations did not receive any money, and many were struggling to meet rising demand for their services. Individual donations continued to be the primary source of income for more than 70% of the organizations surveyed. Since the previous study, the number of groups receiving corporate funding climbed by 10.41%. Subsidies from the government also helped to mitigate the crisis’s harmful consequences. Since the previous survey, the number of groups getting government funding also climbed by 12.50 percent.

Charities had to adapt quickly to constantly shifting demands and donor interests promulgated by the pandemic. Normal fundraising channels such as special events and annual campaigns were closed off due to social distancing regulations. Charities that were nimble enough to shift all or most of their fundraising to online portals at their websites fared better.

In a decidedly challenging task, the Volume 5 survey asked respondents to rate the most critical skills for success during those months.

In answer to the question “What skillsets were most useful to your organization during the months impacted by the coronavirus pandemic?” respondents ranked skill sets as follows:

  1. COMMUNICATIONS (telling your story, connecting with your stakeholders)
  2. FUNDRAISING & DONOR RELATIONSHIP MANAGEMENT
  3. FINANCE (effective fiscal management, strategy, contingency planning)
  4. TECHNOLOGY (creating virtual networks, developing apps)
  5. EXECUTIVE MANAGEMENT & BOARD OF DIRECTORS
  6. NETWORKING

To deal with the new problems, an overwhelming number of responding organization were able to design and implement creative ideas and activities. Ninety-seven percent of responders agreed that innovation is necessary.

Large organizations (with 21+ employees) were roughly twice as likely to report that they were surviving or thriving than small organizations (1-5 employees). Smaller organizations were more likely to face limited staffing resources due to illness and lock-downs. Organizations with five and fewer employees are 56.5% were more likely to say that they were “struggling” as a result of the COVID-19 pandemic, as opposed to all other larger organizations surveyed.

Currently – Unfortunately not Post-Pandemic

Charities responding to the survey had many things in common, but three strong themes emerged: smaller organizations have had a more difficult time; the way charities fundraise has had to fundamentally change; and many organizations have adapted to view disaster and crisis planning as a core part of good charity governance.

Given their tenacity during the epidemic, over 64% of respondents are confident in their capacity to continue operating indefinitely under present conditions.

Organizations were asked the question “How confident are you in your organization’s ability to successfully face the next crisis?” Their answers were:

Surviving to Thriving

Over the course of CAF America’s research, they summed up their observations in Volume 8 and have detected six thematic areas to a charity’s ability to survive such a significant interference with their operations, finances, and staff.

Technology

There is a direct correlation between organizational resilience and the ability to adapt to online tasks that will remain the case post-pandemic. Key areas of improvement in resilient organizations included fundraising through digital technology, identifying digital tools to better connect with stakeholders, formulating digital strategies, and enhancing online programs and service offerings.

Communication

Improved communication is necessary for fundraising and storytelling to entice more support, engaging impact reporting, communications with non-digital and other stakeholders, and video presentation to improve outreach. The trend towards more cost-effective communication on social media channels and through online newsletters and reports is likely to continue post-pandemic.

Fundraising

The pandemic has highlighted the fundraising issues that smaller charities confront when their entire workforce is focused to meeting the growing requirements of their recipients. Sixty-five percent of the nonprofits unable to devote resources to creating and implementing new fundraising activities had fewer than twenty staff.

Finance

Areas critical to charities’ long-term success include building and sustaining financial reserves, strategic planning, contingency planning, and developing a risk management framework.

Leadership

While the majority of charities have faith in their leaders, they still need to enhance their skills and strategy. Nearly 60% of the charities polled said they wanted to improve their change management skills both during and after the crisis. Strategic planning, developing crisis-resilient teams, organizational mental health and well-being, and effective internal communication and staff engagement are among the other abilities that need to be improved.

Diversity, Equity and Inclusion

To strengthen their long-term strategy and build resilience, charities recognize the importance of incorporating DEI into bigger talks about global philanthropy. The pursuit of DEI to develop more effective organizational and programmatic outcomes is essential for social progress.

Donors are showing an increased commitment to flexibility while nonprofits now understand that impactful philanthropy requires collaboration, flexibility, commitment, and streamlined progress measurement strategies.

As never before, non-profits are being asked to put resilience into practice. Nonprofits will move forward from being aware of the new normal to clarity of renewed purpose, and then to taking deliberate action, as a result of the dialogues taking place today between staff and boards. They will be focused on instilling energy, encouraging renewed spirit and re-dedication to mission, and exhibiting, in word and deed, an increasingly positive attitude toward mission.

Further reading

Nonprofits show resilience and initiative during second year of pandemic, University of Washington News, December 14, 2021

Is your organization thinking about continuing working remotely? Some things to ponder are listed in this Nonprofit Times article, “Remote Possibilities – What Comes After Zoom?”

 

 

 

 

 

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Crypto, DAFs and Fundraising – Oh My!

We’ve talked a bit in recent months about both cryptocurrency and DAFs here on The Intelligent Edge, and this week my colleague, Kenny Tavares, pulls the two together in a thought-provoking piece. What do these two vehicles have in common, and how do they impact fundraising and prospect research? Read on…

Kenneth Tavares

                      Kenny Tavares

Let me start with a disclosure: I’m a skeptic. When the media starts to buzz about new investment approaches and how it might benefit nonprofits, I see red flags. So, you can imagine how I must feel these days with a drumbeat of favorable stories about cryptocurrency (crypto) and donor-advised funds (DAFs). It’s not that I don’t support new ideas. However, I do worry about the consequences of not being more thoughtful about these changes.

In July 2021, Paul Sullivan of The New York Times, in a story about nonprofits handling gifts of cryptocurrency, noted that Fidelity Charitable Gift Fund, the largest donor-advised fund (DAF) in the United States, had already received $150 million in crypto this year, an increase of more than 435% so far. A number of other donor-advised funds, including those run at colleges and international institutions, have announced that they also accept crypto.

Blockchain technology, which cryptocurrencies run on, have made some transactions easier to track and more cost effective, providing more money for the nonprofit organization. But the skeptic in me wants to know why crypto gifts to donor-advised funds are surging. How will the growth of these two vehicles affect fundraisers and researchers? First, I think we should look at why each of these might be attractive to investors. [Read more…]

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European-style foundations come to the United States

Bethlem Hospital, London, 1677. Engraving.
Credit: Wellcome Library, London. Wellcome Images (http://wellcomeimages.org)

Foundations have existed in Europe for over 600 years. The oldest is likely Bethlem (aka “Bedlam”) Royal Hospital, which has been taking care of the mentally ill without interruption since the 1400s in London. Even though it’s a charitable organization, it’s called a foundation because that’s the legal way it was set up.

The way foundations are set up in Europe is different in the law than the way foundations (as we know them) are set up here in the US. (At least, until now – I’ll get to that in a minute). [Read more…]

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Interview with a prospect development crypto miner

This week we have a real treat of an article: HBG’s Associate Director for Consulting, Tara McMullen-King, interviewed Amy Begg, former NEDRA board president and an Ann Castle Award recipient. Amy is also an active cryptocurrency miner (with a heart of gold!). Tara and Amy had a fascinating discussion about crypto mining, and Amy generously shared her knowledge and experience about what it means to mine cryptocurrencies. Huge thanks to Amy for taking the time to explain it all for us! ~Helen

tara

Tara McMullen-King

It is clear that the demand for cryptocurrency and crypto mining is not subsiding any time soon – as of August 2021, the combined value of the world’s cryptocurrencies stood at about $2 trillion. Not only are more people investing in crypto, but an increasing number of donors are using cryptocurrencies like Bitcoin to fund their charitable contributions. According to a recent article in the New York Times, there has been a significant increase in cryptocurrency donations to donor-advised funds – for example, Fidelity Charitable received $150 million in cryptocurrency in 2021, up from $28 million in 2020 and only $13 million in 2019. And in May 2021, it was reported that a $5 million anonymous gift in the form of Bitcoin had been made to the Wharton School at the University of Pennsylvania – the largest cryptocurrency gift ever made to the University.

Amy Begg

While many nonprofits are still not set up to accept gifts of cryptocurrency, more and more are beginning to put the internal infrastructure in place to do so, or signing up to accept crypto gifts through donation platforms like The Giving Block – in part because of some of the benefits. Donors can benefit from tax write-offs since cryptocurrency is classified as property (which means no capital gains tax and a fair market value deduction). They are also cost-efficient for organizations involved in international transactions since they eliminate the usual costly associated international banking fees. And with close to half of Millennial and Gen-Z investors owning cryptocurrencies, making the choice to accept crypto donations will also potentially provide an opportunity for nonprofits to engage with a new generation of younger donors in the future.

But how does cryptomining work? How do people get started in the field? And what even IS cryptocurrency? To try to get some answers to these questions, I sat down for a conversation with Amy Begg, Managing Director of Prospect Management at Harvard University, who is a miner with a wealth of knowledge and insight about all things crypto! [Read more…]

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The overlooked generation

There’s a puzzle that I’m trying to figure out. Maybe you’ve got some insight and can help me.

When I got started in my career in prospect research, it didn’t take me long to figure out that we were concentrating on people (okay, mostly men) who were in their 40s to 70s. These were the donors who were in their prime earning years or recently retired, finally able to spend their spare time on volunteering and their spare cash on donating.

We didn’t ignore their kids, of course, but since there’s only so much time in the day, it was the Boomers that got the majority of our prospect identification and research attention. It’s just Sutton’s Law.

So, okay, those Boomers are aging out of prime giving now. Most are now fully in retirement mode, so it makes sense that we look to the next generation who are in their prime earning years or recently retired.

In the press (fundraising and general audience), you can’t open a newspaper or magazine without seeing articles like Millennials And Charitable Giving: A New Approach To Philanthropy, How Millennials Are Changing Philanthropy, and How to Appeal to Millennial Supporters.

Which is great.

But that’s not the next generation after the Boomers. Gen Xers are. [Read more…]

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Making remote work work

They’re calling it “The Great Resignation.” Millions of folks who have worked from home productively through the pandemic aren’t ready to give up their new quality of life for employers who will require them to go back to an office. According to the US Labor Department, a record 4 million people quit their jobs – and that’s just this past April.

For some professions it’s really not an option. It’s difficult for a surgeon and her team not to be in the presence of the patient, although not impossible, apparently.

But for fundraising, it’s a no-brainer. Old school ways of insisting that everyone has to be in the office all the time are losing their credibility. And for good reasons.

Keeping great staff [Read more…]

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Hope and Charity

In the Before Times, we were more at leisure to have philosophical discussions about the nature of philanthropy and income inequality and taxation and due diligence and ethics and the confluence (or colliding impact) of all of those things.

With the daily grinding worry of every sorry aspect of the COVID pandemic starting to recede for many of us (in countries with leisure classes), those discussions have started anew – but with the added grit-filled lens of 20/20 in our hind-sight.

It’s a time of social upheaval we’re living through right now, and maybe we’re lucky to be living through it, because after the awfulness, we can hope that good things will come. World wars, influenza pandemics, suffrage, civil rights, gay rights – you can’t say that those were good times for the people who moved them forward, but they were working with hope for a better future. And better things did happen.

Philanthropy is about nothing if it’s not about hope. I have said that phrase so many times over the years and it has only ever had one meaning to me. But looking at our sector now I see with more clarity that it’s actually about two things.

It’s about when philanthropy is about nothing. And when it’s about nothing but hope.

I have two things that I want to tell you about that led me to that realization, because I was struck by how philanthropy can actually be about nothing.

Earlier this month, the Boston College Law School Forum on Philanthropy and the Public Good released a report called “Impact of the Rise of Commercial Donor-Advised Funds on the Charitable Landscape 1991-2019.” (Honestly, take a look. It’s not a boring report. Ray Madoff and James Andreoni wrote it, and there are awesome visualizations by Helen Flannery).

Here are some meaty takeaways:

  • Since 1981, charitable giving in the United States has stayed steady at about 2 percent of disposable income.
  • Fidelity established the first commercial donor-advised fund (DAF) sponsor, Fidelity Charitable, in 1991. At that time, about 5% of giving went to foundations with the rest – 95% of giving – going directly to charities.
  • By 2019, 13% of all giving went to donor-advised funds and 15% went to foundations, so that means only 72% went directly to nonprofits.
  • Private foundation assets have grown over 500% over the past 30 years, from $165 billion in 1991 to $996 billion in 2019. From 2007-2019, total donor-advised fund assets grew over 300% from $32 billion in 2007 to $142 billion in 2019.
  • Madoff and Andreoni, in collaboration with analytics firm Data Lake LLC, crunched numbers from Giving USA and form 990s to find out what would have gone directly to charities if it wasn’t for DAFs and foundations. Their calculations show that between 2014 and 2018, nonprofits missed out on about $300 billion.

Three. Hundred. Billion. Dollars.

So there’s money moving into “philanthropy” but it’s not going to the nonprofits that do the work. This is when philanthropy is about nothing, and certainly not about hope. This is about amassing assets and control. It’s the business of philanthropy.

A really interesting overview

The second thing I wanted to point you to today is a piece from BBC Radio 4 in the UK called “Tainted Money.” It’s well worth your 27 minutes and 45 seconds.

It’s presented by Dr. David Cannadine, a specialist on the history of business and philanthropy and professor of history at Princeton.

Cannadine distils the concerns and struggles within the charitable sector today – the growing importance of due diligence research, ethics in fundraising, income inequality, and the nature of unequal power in philanthropy.

Along the way he interviews or features audio clips from several people who are well-known within philanthropy circles including Dr. Beth Breeze, Prof. Rob Reich, Anand Giridharadas, and billionaire philanthropist Stephen Schwarzman, among others.

The segment brings up some great questions, including:

  • If we put on our nonprofit’s no-fly list anyone who could possibly be (or have been) tied to some form of tainted business, at what point is there no one left for us to ask?
  • What causes should billionaires (not) be allowed to influence with their largesse? Who decides?
  • Are tax evasion/avoidance, income inequality, and the business of philanthropy inextricably interconnected or are they separate but concurrent problems?

These are fascinating and difficult issues for us to be aware of and we all, from our unique perspectives, have a part to play in figuring out how we move forward, whether that’s in our own department, our own nonprofit, as leaders within our regional and national professional associations, and as caretakers for the future of our sector.

We have to work with hope, and we have to work at it.

By

Is your nonprofit missing out on a huge crypto-tunity?

Want to know who’s cooler at using technology to raise money than your average well-funded university or nonprofit?

Malala, that’s who.

Also, the United Way.

The Count Basie Center for the Arts, Wake Forest University, Cushing Academy, and 200+ other nonprofits that have signed up with The Giving Block to accept cryptocurrencies.

“Oh, cryptocurrency. Pfft!” you might be thinking. “That’s not going to be a thing.”

If you were working in fundraising in the late 1990s, you might remember that the same thing was said about taking donations online. Using credit cards! Over the internet! Like it was space age tech from Mars. Online giving? No way.

Way

Accepting cryptocurrencies is the same thing, and it’s already old news for some (especially considering the length of the news cycles these days).

Back in December 2017 an anonymous philanthropist called “Pine” set up the Pineapple Fund to give away their 5104 bitcoin that had exploded in value to $55 million. Although cryptocurrency donations weren’t unheard of then, Pine’s announcement that nonprofits could apply to be grantees was a turning point moment. Applying for funding from a foundation-y sort of entity was familiar. Some nonprofits started to see the opportunities in being ready to receive cryptocurrencies.

Like UNICEF. Since the UNICEF Crypto Currency Fund was launched in October of 2019 it has received over $5.5 million. That’s during a pandemic yet.

Accepting crypto is an already large and yet still rapidly growing opportunity for nonprofits. According to Alex Wilson, co-founder at The Giving Block,

Cryptocurrency donations really took off in 2017 after bitcoin hit $20,000 for the first time. In 2017, we estimate that over $100M in crypto was donated to the few organizations who were ready to accept bitcoin. Since then, we’ve continued to see cryptocurrency donations increase and estimate that $200M-$300M per year is being donated in crypto. This year is on track to break those records.”

Wow.

The donor advised funds at Fidelity Charitable is one of the places where all of those bitcoin, bitcoin cash, Ethereum and Litecoins are being warehoused. Paul D’Allesandro, author of The Future of Fundraising: How Philanthropy’s Future is Here with Donors Dictating the Terms, said in a recent podcast with Andrew Olsen that Fidelity’s stack of coins is $100 million tall.

One hundred million is just…a lot.

But it’s not as much as a billion. Which is the amount reported yesterday that Ethereum crypto founder / billionaire / philanthropist Vitalik Buterin donated in one fell swoop in coins to help with Covid relief in India. Depending on if the coin retains its value, of course.

Starting the conversation

If you’re a nonprofit fundraiser, you might be wondering: how do we open up this conversation with donors who have cryptocurrency? (or who we don’t know have crypto?)

In a CASE podcast featuring Jay Goulart, former VP for Institutional Advancement at Gulliver Schools, now founder of the consultancy Big Philanthropy, Goulart describes what happened when his school approached a donor – a commodities trader – who had mentioned owning cryptocurrencies.

 We realized with this guy that we had to speak in terms of coins and not in money. So in other words, he didn’t see things in the same way as, you know, would you do a million, would you do five million, or whatever the number is.

We asked him for what was the equivalent of five million dollars in coins, which was about 500 coins. That’s not what he wanted to end up doing, he did about half of that. But he said I’ll do it over a period of time. Now when we first met him, bitcoin here in the States was just under $10,000 a coin…so…we’re just shy now of what’s left of 8 figures in terms of a gift from this person.

Now, it’s really not the way that most people would venture into this because, you know schools want to liquidate and they don’t want to hold and they don’t want to speculate. [It’s] all very logical and it all makes a ton of practical sense. But sometimes there’s moments when you meet someone and they’ve never really played in our arena, and you’ve got to find a different avenue. And sometimes we have to take a little bit of risk ourselves.”

So part of the answer is being open to trying a new way of receiving donations.

A first step could simply be getting a wallet set up to accept cryptocurrencies and publicizing it on your website’s giving pages so that donors can see that it’s even an option.

Another way is being more purposeful about it.

Marketing your Mission

United Way Vice President of Innovation Edwin Goutier recently published an engaging article on the nonprofit’s blog highlighting how easy it is to donate a variety of cryptocurrencies to the organization. For each currency he directly tied a donation level to its very specific mission impact at United Way. It’s a brilliant, effective piece of marketing.

What does the average cryptocurrency holder look like? Maybe not what you’d think. According to a study by London-based crypto custodian Copper.co, 56 percent of bitcoin holders are investors and 80% of those are long-term holders. So that means, for them, cryptocurrencies aren’t a fluke – they’re a part of their investment portfolio and they take it seriously.

It also means that when a long-term holder divests of some their cryptocurrency, they will likely incur capital gains.

Unless, of course, they donate them.

We know that tax incentives aren’t the main reason why people give to nonprofits, but they’re certainly a consideration. If people donate cryptocurrency under their real names (as opposed to anonymously), they can claim a tax deduction. If they can avoid capital gains tax as well it’s a double win. Being able to help a mission they care about? Win-win-win.

Finding prospects

The question for us in prospect research is, how do we identify cryptocurrency holders? Especially when they go by names like Cryptochristoff, Madgreek, Twobadour, and MetaKovan.

Well, you can start with The Crypto Giving Pledge members – people who have pledged to give 1% of their cryptocurrency annually – and see if you have a match in your database. There aren’t a lot of them yet, but the list is sure to grow.

You can also use a search engine, search in social media, and check out forums to see what you can find. A quick Google search found that MetaKovan is actually Vignesh Sundaresan, CEO of Singapore consulting firm Portkey Technologies. Twobadour is Anand Venkateswaran. On Twitter I found two crypto-enthusiasts who go by the handles Madgreek and Cryptochristoff. Could it be that simple? Maybe.

See if you can match names to social media handles you already have on constituents in your database. And, of course, as you’re researching someone generally it’s a good idea to see if they follow or knowledgeably discuss cryptocurrency on their social channels. This could be a clue that they hold crypto.

Primary source prospect research is key here also. This is a great topic for frontline fundraisers to bring up in face-to-face meetings with donors and board members. “What do you think about our nonprofit accepting cryptocurrencies?” could be a good opener for a discussion.

It’s certainly not a bad thing to ask for advice about. And you know the old fundraising adage about asking for advice, right?

Further resources:

 

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