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December 25, 2006

Charity

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Within the last few days I received two disturbing "packets" from charities. I fear it is a trend. The packets consist of 8x10 triptychs with pockets. They are so thick and shiny that they could stand up independently for full display on one's dining room table, if one chose to pluck them from the pile. Of course they are in full color. Each has a pocket into which is slipped the full annual report (a 20 page booklet, also printed on thick shiny paper} a somewhat smaller booklet naming 2006 contributers (a lousy $300 deserves no mention, by the way), and the prepaid envelope and pledge card, which up until this point, was considered a sufficient plea in and of itself.

I admire both of these organizations, and wonder who talked them into this wretched excess, this terrible waste of funds and trees. It smacks to me of "development" consulting business. It is even more disturbing than the ask-the-same-people-who-have-already-contributed-fifteen-more-times trend, in which a solicitation for the organization to which one recently contributed begins to arrive twice a month.

While I'm ranting, I hate the capital campaign idea too. It works on the premise that people would rather contribute to a physical monument (often an architectural disgrace, bastardizing a historic building) than for the day-to-day operations of the organization. No chance of getting a bronze plaque with one's name tacked onto a pot of beef stew, I guess.

I like the single sheet, white letter I get every year just after Christmas from the Boston Women's Health Collective. I expect it, and I contribute.


Brian Moynihan, president of global wealth and investment management at Bank of America and a member of the board of directors of YouthBuild Boston, Boys & Girls Clubs of Boston and United Way of Massachusetts Bay had a piece in the Boston Globe on Christmas entitled Wealth and philanthropy: who gives (and why)


Some have charged New Englanders with giving less to charity than people in other regions. Others say secular donors give less than the faithful. Yet such assertions are less informative than this statistic: Two-thirds of all philanthropic gifts made by U S households come from the wealthiest 3 percent of Americans. ...

In a Bank of America survey of households that earn over $200,000

New Englanders, whose generosity has been questioned in prior studies , will be heartened to know that wealthy residents of the Northeast give more on average than wealthy residents of any other region. However, this may have less to do with regional differences in generosity than the concentration of affluence and nonprofit organizations seeking donations in this region.

Nationwide, wealthy households gave an average of $117,000 to charity in 2005. That is 60 times more than the national average. People who earn more can give more. However, wealth accumulation is a more important driver of increased giving than a rising annual income. Wealthy people give more when they feel financially secure, when they reach a point in their lives when they decide they have more wealth than they need....

That may explain why peak giving years are between the ages of 61 and 70, why married couples give more than widows and widowers, and why parents of grown children or young children give more than twice as much as parents with children in school or college.....

Our survey also examined why people give. The biggest motivators are altruistic reasons. More than 86 percent of wealthy households say they are motivated to "meet critical needs," followed closely by "giving back to society" and the idea that "those who have more should help those who have less."......

When asked what would make them give more, 3 out of every 4 polled said organizational effectiveness. This strong interest in effectiveness explains why many are eager to share the professional expertise that helped them earn their money. Eighty percent volunteer . Sixty percent serve on nonprofit boards. Those who see charitable missions up close from a volunteer perspective give more than those who do not. The most committed who volunteer the most time also give the most dollars.

Yes...organizational effectiveness, but according to whom -- the development consultants?

Photo note: Although this looks like a place where people need financial help -- it isn't - it's the back side of the fabulous nursery in the last entry

If the Globe has made it impossible to read Moynhan's article press the next clickie


OME HAVE CHARGED New Englanders with giving less to charity than people in other regions. Others say secular donors give less than the faithful. Yet such assertions are less informative than this statistic: Two-thirds of all philanthropic gifts made by U S households come from the wealthiest 3 percent of Americans. Their giving patterns deserve more attention if charities are to improve their effectiveness and fund-raising appeals.

To better understand the needs of clients who seek our help in philanthropic giving, Bank of America's philanthropic management group, based in Boston, commissioned the largest survey of its kind. At our request, the Center on Philanthropy at Indiana University surveyed households with annual incomes of at least $200,000 or a total net worth of $1 million or more. The effort included households across the wealth spectrum, from the affluent to the very wealthy.

New Englanders, whose generosity has been questioned in prior studies , will be heartened to know that wealthy residents of the Northeast give more on average than wealthy residents of any other region. However, this may have less to do with regional differences in generosity than the concentration of affluence and nonprofit organizations seeking donations in this region.

Nationwide, wealthy households gave an average of $117,000 to charity in 2005. That is 60 times more than the national average. People who earn more can give more. However, wealth accumulation is a more important driver of increased giving than a rising annual income. Wealthy people give more when they feel financially secure, when they reach a point in their lives when they decide they have more wealth than they need.

That may explain why peak giving years are between the ages of 61 and 70, why married couples give more than widows and widowers, and why parents of grown children or young children give more than twice as much as parents with children in school or college.

Business owners give the most. Households that earned wealth through entrepreneurship gave $232,000 on average last year, more than two times the average $110,000 given by households that inherited wealth.

Among average American households, the largest portion of giving by far goes to religion (60 percent), with the next largest share given to basic human needs, just ahead of foundations and combined funds such as the United Way. Among wealthy households, the largest share goes to foundations and combined funds (23 percent), with religion a close second and education right behind. Three-quarters of the wealthy give to education and the arts, compared with less than 15 percent of the general population.

When making decisions about giving, wealthy donors are more likely to consult fund-raisers and nonprofit staff than their peer networks, their children or financial advisers . This may partially explain why education and arts institutions with sophisticated development offices claim larger shares of giving than many charities with leaner fund-raising infrastructures.

Our survey also examined why people give. The biggest motivators are altruistic reasons. More than 86 percent of wealthy households say they are motivated to "meet critical needs," followed closely by "giving back to society" and the idea that "those who have more should help those who have less."

Wealthy donors are extremely interested in the effectiveness and efficiency of their charities. They want to know where their money is going, how well it is used, and they want to see the impact. Increasingly, our clients tell us they want to be more strategic in their giving, rather than just write a check.

When asked what would make them give more, 3 out of every 4 polled said organizational effectiveness. This strong interest in effectiveness explains why many are eager to share the professional expertise that helped them earn their money. Eighty percent volunteer . Sixty percent serve on nonprofit boards. Those who see charitable missions up close from a volunteer perspective give more than those who do not. The most committed who volunteer the most time also give the most dollars.

Debates about who is more generous may or may not inspire more giving. What's certain is that nonprofits can advance their missions by following these lessons: appeal to donors' altruistic motivation to meet critical needs; be transparent about how donations are spent, let donors see the impact; and provide meaningful ways for donors to give their skills and time, not just their money.

Brian Moynihan is president of global wealth and investment management at Bank of America and a member of the board of directors of YouthBuild Boston, Boys & Girls Clubs of Boston and United Way of Massachusetts Bay.

Posted by Dakota at December 25, 2006 11:52 AM