Inside Philanthropy

A blog on philanthropy and nonprofit news and issues. A publication of Philanthropy Journal.

December 27, 2007

Charities must enlist and keep boomer army

Charities need to move quickly to harness and continue to engage the time and know-how of older baby boomers.

As three new studies by Urban Institute’s Retirement Project show, aging boomers represent a big pool of potential nonprofit workers and volunteers, and the sooner charities engage them, the more likely they are to get and stay involved.

The first wave of the 76 million boomers born between 1946 and 1964 will start turning 62 and receiving Social Security benefits on January 1.

And the population ages 55 to 64 will grow by half by 2010, compared to 2000, and by three-fourths by 2020, the Urban Institute says.

“Nonprofits seem destined to benefit from significant growth in the services of retirees,” says an Urban Institute researcher.

One study says the vast majority of adults who volunteer while working also volunteer after retiring, and many older adults who do not formally volunteer try volunteering after retiring.

A second study says older adults who volunteer typically continue to volunteer, and are more likely to stop volunteering than to start.

It also says volunteers who volunteer a lot over many years and are married to volunteers tend to volunteer the longest.

Nonprofits must “focus efforts on retaining older volunteers to maximize volunteer engagement during later years,” the researchers say. “Recruiting older adults in volunteer activities early on, ideally before they retire, could fill any remaining gaps in volunteer needs.”

The third study says that while older adults are engaged at relatively high rates either through paid work or formal volunteering, the potential for enlisting more older adults in the workforce or nonprofit volunteering is enormous.

Over 10 million healthy older adults with no caregiving responsibilities -- over half of them seniors under age 75, and nine of 10 of them with previous work experience -- neither worked nor volunteered formally in 2004, the researchers say.

The supply of work and volunteer opportunities represents a big opportunity for older boomers, the researchers say, but they also warn that older adults with limited education and work experience will need encouragement to become engaged.

Significantly smaller shares of low-income individuals than higher-income individuals worked or volunteered formally, the researchers say.

New policies, they say, could include training, more federal funding for programs aimed at low-income older adults, and bigger networks to link older adults to volunteer opportunities.

As the Urban Institute concludes, longer work lives can mean bigger retirement incomes and tax revenues, and smaller net Social Security payouts.

“The payback from increased volunteerism,” it says, “includes enhanced health status, potential reductions in the cost of government health programs and benefits to those receiving services.”

Boomers represent a huge resource for nonprofits, which need to find ways to get them involved early, and to keep them involved.

December 21, 2007

A match that charities must make

As the wealthiest Americans corner even more of the wealth, the challenge for charities is to engage the wealthy in addressing the needs of those less fortunate.

And two new reports suggest the time is ripe for making that match.

As The New York Times reports, a new study by the Congressional Budget Office shows a widening gap between the richest and poorest Americans.

Total income for the poorest fifth of U.S. households in 2005 was $383.4 billion, for example, or 63 percent less than just the increase of $524.8 billion in income for the wealthiest 1 percent.

And the top 1.1 million households had total income of $1.8 trillion, or 18.1 percent of the total income of all Americans, with the total income of the top three million individual Americans roughly equal to that of the bottom 166 million Americans.

A separate study by the University of Chicago calls into question what it says are commonly held beliefs among professional fundraisers that increasing the return on matching gifts automatically increases giving.

Simply promising to match a gift is key to motivating givers, but increasing the size of the promised match does not automatically prompt givers to give more, the study says.

But the study says it does reaffirm other research that shows people tend to “rally to support causes when they feel they are under some threat.”

Poverty and all the health-and-human service problems that flow from it represent a huge threat to our society and to its competitiveness in a global economy.

That is a powerful argument that charities can build into the compelling case they now can make to givers that their matching gifts are more likely to generate giving by other givers to address the urgent social problems society faces.

December 17, 2007

Charity shoppers, beware

It was bound to happen: Tripping over each other in a rush fill their cash registers by portraying themselves as good corporate citizens, companies have built charity into the way they market their products.

But as Lucy Bernholz of nonprofit consulting firm Blueprint Resarch and Design told The New York Times, the growing practice of “embedded giving,” or building a donation into the purchase of items like jewelry or feminine products is “virtuousness as a marketing gimmick run amok.”

Merchandizing masquerading as charity is not regulated and typically is unaccountable, and it is not clear who, if anyone, claims a tax deduction for the practice, nonprofit experts told the Times.

“The potential for it to be a scam is huge,” Bernholz told the Times.

By using charity to peddle their wares, companies make it easy for Americans hooked on consumption to justify feeding their habit.

Americans are generous and compassionate, wanting to help those in need, particularly during the end-of-year holidays and in the immediate after-shock of disasters.

But Americans also need to be smarter about their giving, making sure they ask questions and read the small print instead of simply buying a product because the merchandiser says part of the purchase price will benefit charity.

December 10, 2007

Nonprofits must tap philanthropy’s diversity

Giving takes many paths.

So nonprofits, always scouting for ways to pay their bills, improve their services and launch new ventures, must make their case to prospective givers and partners who can choose to participate in widely varying ways to support a broad range of causes.

As a continuing flow of studies show, givers’ preferences and practices are diverse.

A survey released in November by the Center on Philanthropy at Indiana University and American Express, for example, found two-thirds of all donations totaled $100 or less, and a second study the Center released in December found the average amount U.S. households gave totaled $2,045.

Another new Center study, sponsored by Bank of America, provides portraits of 12 “archetypes” of donors representing the wealthiest 3.1 percent of U.S. households.
Studies also look at the diverse ways in which foundations give.

A growing number of foundations and funders, for example, are turning to “mission investment intermediaries” to help them with their social investment goals, according to a new study by FSG Social Impact Advisors in Boston.

A separate survey by The Foundation Center in New York City found one in four independent and family foundations surveyed operate their own charitable programs and activities.

And only 5 percent of the more than 3,000 foundations in Southern California are willing to consider capital grants for buildings, renovations and land acquisition, according to a recent study by the Center of Philanthropy and Public Policy at the University of Southern California.

Produced by a broad range of academic, philanthropic and financial-services institutions, research on charitable giving gives nonprofits and givers alike a fuller picture of how the charitable marketplace works.

More research is needed, particularly to examine giving by individuals of more modest means, those from diverse ethnic and racial backgrounds, and those who give their time and know-how as well as their money.

By better understanding how and why people give, nonprofits can continue be smarter and more strategic about engaging givers and matching their values and resources with their organizations and mission.

December 3, 2007

Nonprofit boards ‘in denial’

Nonprofit boards must occupy an alternate universe.

Consider the American Red Cross.

Six months after hiring former IRS Commissioner Mark W. Everson following an 18-month search, the Red Cross board last week fired Everson for having an affair with an employee.

As Peter Dobkin-Hall of the Hauser Center for Nonprofit Organizations at Harvard told The New York Times, the Red Cross board historically has been a “board of denial.”

The Red Cross board is not alone.

Disengaged, clueless and weak, boards are sucking the life out of nonprofits.

The job of nonprofits boards is to govern their organizations, chart their strategy, manage their risk, oversee their business, report to funders, gauge performance and, not least, secure resources.

But as lawyer Marty Martin recently told a workshop hosted by the Institute for Nonprofits at N.C. State University, a big gap separates what boards say and what they actually do.

It is in that gap, he said, that governance begins.

Board should be working actively to lift up their nonprofits with the vision, direction and connections they need.

Instead, boards are content to wallow in their own confusion about their role and the operations and needs of the nonprofits they serve.

Boards should be engaged continually in crafting a vision for their nonprofits, focusing on mission, enlisting givers, improving performance, mapping the future, and helping staff gear up to identify and deal with opportunities and threats.

Instead, boards waste their meeting time listening to mind-numbing financial reports and nodding their heads to the reassurances the staff feeds them that all is well.

As Martin told the Institute for Nonprofits’ workshop, boards need continuing education about their role and about the nonprofits they serve.

Uninformed, disengaged and pliable boards arguably represent the biggest challenges nonprofits face.

Nonprofits need to shake their boards out of their fog of denial, and start picking new board members with passion, energy and the willingness to learn and fill the roles they need to play to equip their organizations to effectively attack the urgent social problems facing our communities.