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Boulder Daily Camera
Making Money Matter
Enid Ablowitz
 

EFFECTIVE GIVING

People give for many reasons, but most who give care about how their money is used.  The more people give, the more they care.  The more they care, the more they give.

A recent example of extraordinary giving has been the response to the natural disaster in the Indian Ocean—the tsunami that left so many dead, so many homeless, and so much destruction in so many places that it was almost unfathomable.  First there was disbelief, then horror, then the opening of hearts.  People flocked to the area to volunteer, fundraising efforts swung into full gear, and the US Congress even passed a special bill to allow charitable deductibility for ’04 through January of ’05. People gave enormous sums of money.  In fact, according to the Chronicle of Philanthropy, January 19, 2005, “American relief charities have raised more than $480 million to aid victims of the deadly earthquake and tsunamis in South Asia, with much of the money coming in online.  That amount now far exceeds the $350 million pledged by the US Government.” 

The September 11^th, 2001 disaster caused over $550 million to be donated in the weeks after the attack and by the end of 2001, $1.88 billion in donations were made to the 9-11 relief funds.  Those gifts represented about one percent of all charitable giving by Americans for that year.

These two recent catastrophic events motivated extraordinary giving, yet Americans became only marginally more charitable overall during that period.  According to Giving USA, donations increased by an estimated  .6 percent in 2002 and .5 percent in 2003  (not necessarily including some religious donations.) 

It is also interesting to note that in both cases, there were opportunistic charlatans who tried to capitalize on the tragedies by creating bogus “non-profits” and who either simply stole the money or passed along only a fraction of the donations to the intended recipients. Many new organizations sprung up, seemingly overnight. 

In fact, the number of newly created non-profits has soared in the last few years; the IRS reported that there are now over 800,000 registered non-profits in the US, over a third of which have been established in the past decade.  Religious organizations are the fastest growing segment of the non-profit explosion.  They are also the least transparent.

The juxtaposition of these ideas, that we respond generously to acute needs resulting from specific events, that the overall level of giving has gone up only marginally, and that the number of non-profits seems to be growing exponentially with the religious sector in the lead, has led to a variety of recent articles in the press.  Here are some of the points of discussion:

1.  It’s a zero sum game.  We are redirecting our giving rather than giving more.

2.  Giving to acute need takes money away from providing sustained solutions to pervasive need (like homelessness, hunger, disease prevention, economic development)

3.  Short term, impulsive giving involves one time commitments rather than long term investments of philanthropic dollars that involve creating endowments, establishing charitable trusts and making bequests.

4.  Media has an enormous impact on making the case for giving.  The more people know about the rationale for support and the use of their funds, the more likely they are to give.

5.  Well known, respected organizations with a history of solid performance attract the most charitable dollars.  (Example:  of the $480 million for tsunami aid, $194 million was given to the American Red Cross.)

6.  The non-profit sector has become very competitive and the sheer numbers of organizations may dilute the impact of some giving through lack of coordination and overlap in the delivery of services.

7.  Religious fundraising creates concern about what percentage of the money is being used for humanitarian aid vs. proselytizing. (According to one study, only about one third is for aid.)

8.  Effective philanthropy is strategic; conscious giving which results in the desired impact is not easy.  The “business” of philanthropy has become very sophisticated.  Case in point: Stanford’s Business School is offering a new executive program for philanthropy leaders of grant-making organizations.

For donors, there is a lesson here.  Do your homework when you give.  Know to whom you are giving, why you are giving, and what impact your giving will have.  If you want to respond instinctively and generously from the heart, be sure to also think about your overall philanthropy.  Don’t forget those organizations you have supported in the past. They rely on your gifts to accomplish their missions. And most importantly, if you can, find a way to give more.

Enid Ablowitz is the Vice President for Advancement at the University of Colorado Foundation, Inc., and Director of Advancement for the Coleman Institute for Cognitive Disabilities.  She has been working as a donor advocate for more than a dozen years.  Her book, Making Money Matter:  Eight Steps to Thoughtful Giving was recently published.  For information on how to obtain a copy, contact her at enidablowitz@hotmail.com.

You may contact Enid Ablowitz by email at enidablowitz@hotmail.com

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