Emergent Philanthropists - America’s Evolving Ethnic Donor Groups
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Emergent Philanthropists - America’s Evolving Ethnic Donor Groups

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Ethnic groups have their own societal and philanthropic objectives and they are not always comparable to those of our traditional donors. Philanthropy means more than giving money. African-Americans, ...

Ethnic groups have their own societal and philanthropic objectives and they are not always comparable to those of our traditional donors. Philanthropy means more than giving money. African-Americans, Asian-Americans and Hispanic-Heritage-Americans are ready to take their place as major contributors in society, but many organizations do not yet know how to effectively engage their interest. By understanding giving traditions among these emergent charitable groups you will be able to promote the most appropriate giving vehicles, know how to assess and revise your engagement strategies to welcome non-traditional donors into your donor ranks and how to use the right recognition vehicles that will empower these up-and-coming philanthropists.

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  • (c) Blackbaud, Katherine Swank, 2010 04/12/2010 AFP International Conference - Handout

Emergent Philanthropists - America’s Evolving Ethnic Donor Groups Emergent Philanthropists - America’s Evolving Ethnic Donor Groups Presentation Transcript

  • Emergent Philanthropists America’s Evolving Ethnic Donor Groups Monday, April 12, 2010 Katherine Swank, J.D. Consultant, Target Analytics, a Blackbaud Company
  • Your Presenter
    • Law degree, Drake University School of Law
    • 20+ years as Development Professional, including
      • Nat. Dir. Planned Gifts & Lead Manager, $20M Capital Campaign
      • Internal fundraising consultant to 60+ national/chapter offices
      • Over $215 million raised during career
    • 10 years as Adjunct Faculty, Regis University, Masters in Nonprofit Management Program
      • Courses: Wealth & Philanthropy; Financial Resource Development
  • Our Agenda
    • Philanthropy in the United States
    • Defining the “Affluent” in America
      • Giving Patterns of the Affluent
    • Emergent Philanthropists: Donor Groups to Watch
    • How to Find and Talk with Affluent Emergent Donor Prospects in Your Database
  • Philanthropy in America
    • Charitable giving in the U.S. grows faster than the economy
      • GDP has risen 150% in past 50 years
      • Giving has risen 190%
    • Per capita, Americans give
      • 3 ½ times as much as the French
      • 7 times more than Germans
      • 14 times more than Italians
  • Philanthropy in America
    • Approximately 80% American households donate annually
    • Yet I.R.S. tax deductibility plays only a small role
      • Only itemizers take a charitable deduction
      • 33% of Americans itemize
        • 40% of households with incomes >= $120K itemize
  • Average Household Charitable Gifts
  • 40-Years Charitable Giving
  • 2008 Contributions by Source
    • $307.65 billion total estimated contributions
  • Facts about 2008 Contributions
    • Contributions declined from $314.07B raised in 2007
      • Exceeded $300B for the second year in a row
      • Decrease of 2% (-5.7% when adjusted for inflation)
      • Decline was much less than feared
    • Only two other declining years since 1956
      • 1974 and 1987
    • 38% of organizations said they had an increase; 35% reported a decrease
  • 2008 Percent Change in Giving
  • Giving from Individuals
    • Individuals accounted for 75% of all charitable giving in 2008
      • Consistent % of total giving
      • $229.28 billion
    • Lowest level of giving by individuals since 2003
      • Remains the single most important source
    • Individuals + Charitable Bequests = 82% of total
      • 88% when factoring in Family Foundations
  • 2009 Year to Date Findings
    • Target Analytics 2009 Index of National Fundraising Performance – 4th Quarter
    Source: http://www.blackbaud.com/files/resources/downloads/cam/TargetIndexResultsSummaryQ42009.pdf
  • 2009 Preliminary Results
    • Declines in both 2008 and 2009 for many key measures
      • i.e., Donor retention, new donor acquisition, revenue
      • Largest declines in 2008 to 2009 Q1 & Q2 comparisons
      • Small upswing in Q4
    • 2008 saw revenue per donor growth
    • 2009 saw revenue per donor decline
      • First time since Index began in 2002
  • Six-Year Trending
    • Target Analytics 2009 Index of National Fundraising Performance – 4th Quarter
  • Successful Fundraising Trends
    • Organizations putting more focus on Development activities especially individual donor relations including Major Donor Development appear to be faring well
      • More engaged board members actively participating in fundraising, cultivating relationships, and being ambassadors for the organization
      • Nonprofit leaders more visible and more involved with individual donor fundraising
  • Top Motivations of Giving
    • Primary motivator: Because they are asked and presented with a giving opportunity that motivates them
    • Hate to say no person to person
      • Success doubles when a donor knows the asker
    • Control where their money goes and how it is used
    • Belief in the organization
    • Make a positive difference
    • They give because someone made it easy or convenient to give
  • Contributions by Income Annual Household Income % of Households in Income Category % of all Charitable Donations < $100,000 90.4 35.6 $100,000 - $200,000 7.4 7.9 $200,000 - $1 million 2.1 36.2 > $1 million 0.2 20.3 9.7%
  • Wealthy Americans
    • “ Rich”
      • Top 1% of household incomes
      • Equates to about $500K annual income
    • “ Millionaire Households”
      • Based on net worth; 7% of all households; 9.3M
    • “ Affluent”
      • Households with an annual income of $77.5K+
      • Around 20% of households
  • Profile of the Affluent Household - Past
    • Caucasian man
    • Average age in mid-50’s or older
    • Married with children
    • Self-employed
      • Business owner, Farmer, Contractor, etc.
    • First generation “affluent
  • Profile of the Affluent Household - Present
    • Younger
    • Entrepreneur
      • Technology, Real estate, Athletics, Entertainment, Corporate leader, etc.
    • Just as likely to be Female
    • Just as likely to be Minority
  • Emergent Philanthropists
    • African Americans
    • Hispanic/Latin Heritage Americans
    • Asian Americans
  • Common Characteristics of Emergent Groups
    • Giving is linked to family and kinship
    • Religion very important
    • Majority of giving is personal and informal
    • Obligation to help others
  • African American Wealth
    • Approximately 2.4 million African Americans living in households with annual income of $75,000 or more
    • Comprises 13 % of the total U.S. population
      • Affluent areas with an African American majority include, Prince George's County, Maryland, DeKalb County, Georgia and Charles City County in Virginia
  • African American Wealth
    • Traditional wealth comes from family businesses
    • Recent wealth:
      • Entrepreneurial businesses or self-employment
      • Real estate
      • Certified professions
      • Sports, media and entertainment
  • Facts about Giving
    • Most generous philanthropic ethnic group in the U.S.
      • 53% black households donate to charity
        • Giving is more predominate in the South
      • Donate 25% more of their discretionary income than whites
    • Gifts of time are often more highly valued than gifts of money
    • Women tend to control giving decisions
  • Philanthropic Motivations
    • The Black church is the uniting force behind African American philanthropic efforts
    • Giving to and serving family, neighbors and needy strangers are seen as general obligations
    • Traditional recipient organizations include
      • Religious, Educational, Social and Political
    • In recent years, increasing donations to
      • AIDS causes and genocide in Africa
  • Philanthropic Attitudes
    • Few African Americans define their traditions of giving as &quot;philanthropy&quot;
      • Believe that &quot;philanthropy&quot; is a term reserved for multimillionaires
      • Would not describe their behavior as philanthropic and are uncomfortable with the term
    • Many see their donations of time and money as unremarkable
  • Giving Patterns of African Americans
    • Patterns of giving and attitudes toward philanthropy are similar to those of the general population
      • Except African Americans tend to be more private and confidential
    • Similar levels of giving at similar income levels
    • Donor advised funds and endowment opportunities are popular
      • As a greater number of African Americans become affluent, use of more sophisticated giving methods will increase
  • Hispanic American Wealth
    • Hispanic households earning more than $100,000 a year has grown by more than 126% in the past two decades
    • 3.7 million affluent Hispanics in the U.S.
      • Hispanic wealth is growing faster than that of the general community
      • Affluent Hispanic households concentrated in 5 geographic areas: Los Angeles, New York City, Miami, Houston and Chicago
  • Hispanic American Wealth
    • Traditional and Emerging Wealth:
      • Family-owned businesses
      • Small businesses
      • Inherited wealth
    • Largest % of minority owned businesses
      • Ahead of Asian and African American
    • 75% of Hispanics under the age of 40
  • Facts about Giving
      • Hispanic givers are consistent and loyal over time
      • 63% of Hispanics donate to charity
      • Hispanic donors were more likely to say that they gave to help the poor help themselves
  • Philanthropic Motivations
    • Give to church – predominantly Catholic
    • Education and job training
      • Educational opportunities for the next generation are a priority
    • Victims of disaster
    • After school and youth programs
    • Support relatives abroad or other family members before contributing to nonreligious institutions
  • Philanthropic Attitudes
    • Giving is confidential and haphazard
    • Personal connection to the organization is essential
    • Recognition is not always wanted
  • Giving Patterns of Hispanic Americans
    • Follow American mainstream investment strategies, but have not yet established organized giving mechanisms
      • Highly conservative when it comes to business and finance
        • Strong propensity towards saving
        • Giving priorities diversify as income increases
      • Charitable gifts are part of any leadership role
      • Give to organizations where they either hold a leadership position or know the leaders
  • Asian American Wealth
    • More than 12 million Asian Americans
      • 4% of US population
      • 61% foreign born
        • Largest source of immigrants in the past 20 years
    • Higher rate of savings than average – is tradition
    • Highly educated
      • 45% have a Bachelor’s degree
  • Asian American Wealth
    • Asian American household income is higher than that of all major racial groups including Non-Hispanic Whites
    • 2 nd highest % of minority owned businesses
    • Asian Indians richest immigrants in U.S.
    • Recent wealth:
      • Food and lodging
      • High-tech
      • Personal services firms and store-fronts
  • Facts about Giving
    • Asian Americans give a larger % of income than whites
    • Many send money “home” to help family members
      • Participate in informal loan associations to help others start-up businesses
    • High % of political donations
  • Philanthropic Motivations
    • Project specific, often with Asian or Asian-American theme
    • Seek personal involvement with the project or organization
    • Support direct services vs. service organizations, re-granting, pass-through vehicles or endowment
      • Universities – alma mater, as parents, as family members
      • Museums and Cultural Centers
      • Nursing Homes
      • Religion (Filipino-Americans)
  • Philanthropic Attitudes
    • Philanthropy is part of this culture
      • “ We help because we are asked.”
    • Celebration and recognition are not common nor expected
    • Give money, skill and time to build organizations that benefit the community
    • Expect high accountability, effective use of funds, greater impact
  • Giving Patterns of Asian Americans
    • Successive generations adopt American giving patterns
      • 3rd generation shows wider range of philanthropy
    • Donations are made as part of big life events
    • Giving is person to person - informal
    • Strong sense of reciprocity in giving
    • Prefer recognition of gifts
      • Gives them “face” in community and promotes others to give
  • Planned Gifts
    • Studies indicate that fewer than 10% of bequests and 15% of CRTs come from these emerging philanthropists
      • Bequests: 2% Black; 1% Hispanic; 6% Other (including Asian)
      • CRTs: 4% Black; 3% Hispanic; 6% Other (including Asian)
    • Evidence that retirement planning mimics legacy giving
    • Work with financial leaders in your community to promote options ; “Leave a Legacy” program
    • Consider promoting vehicles that build a legacy over time
  • Find Affluent Donor Groups in Your Database
    • Use the profiles presented here as a guide to find affluent prospects
      • Data appends: age, gender, ethnicity, income, specific geographic areas, business connections, evidence of gifts to other charitable organizations
      • Consider prospect modeling available through various vendors that append this information for you and indentify your best prospects
  • Talk with Affluent Donor Groups
    • Seek out advice and suggestions from loyal donors from these emergent groups
      • Focus groups
      • Surveys
      • One-on-one interviews
      • Create formal or information advisory committees
  • Talk with Affluent Donor Groups
    • In both good and bad times, be transparent and ask for support
      • Cultivation and stewardship should clearly relate to the prospect’s point of view
      • Recognition is not desired the same way by everyone
  • Talk with Affluent Donor Groups
    • Review your current communications and refresh them where appropriate
      • People respond to people who look and think as they do
        • Gather giving stories and quotes from representative donors
      • Encourage giving techniques that relate to the donor’s objectives
        • i.e., Donor advised funds, cumulative giving options, pooled giving vehicles
  • Summary and Questions
    • People want to make a difference in their community
    • Among other things, we all give because we are asked
    • Understand which emergent groups are amongst your organization's prospects
    • These emergent philanthropic groups are generous
    • Charitable priorities may change as income increases
    • We give to people who are often like ourselves
    • Make giving easy and comfortable
  • Target Analytics, a Blackbaud Company Katherine Swank, J.D. 2000 Daniel Island Drive Charleston, SC 29492 800.443.9441 extension 3926 [email_address] | Twitter: @KatherineSwank http://www.blackbaud.com/targetanalytics