The document discusses the evolving landscape of philanthropy in the U.S., focusing on emergent ethnic donor groups, particularly African Americans, Hispanic Americans, and Asian Americans. It highlights giving patterns, motivations, and wealth demographics within these groups, emphasizing the importance of personal connections, cultural traditions, and the potential for larger contributions as individuals become affluent. Furthermore, it offers strategies on how to engage and communicate effectively with these affluent donor prospects to enhance fundraising efforts.

1. Emergent Philanthropists America’s Evolving Ethnic Donor Groups Monday, April 12, 2010 Katherine Swank, J.D. Consultant, Target Analytics, a Blackbaud Company

2. 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

3. 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

4. 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

5. 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

6. Average Household Charitable Gifts

7. 40-Years Charitable Giving

8. 2008 Contributions by Source $307.65 billion total estimated contributions

9. 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

10. 2008 Percent Change in Giving

11. 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

12. 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

13. 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

14. Six-Year Trending Target Analytics 2009 Index of National Fundraising Performance – 4th Quarter

15. 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

16. 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

17. 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%

18. 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

19. 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

20. 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

21. Emergent Philanthropists African Americans Hispanic/Latin Heritage Americans Asian Americans

22. 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

23. 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

24. African American Wealth Traditional wealth comes from family businesses Recent wealth: Entrepreneurial businesses or self-employment Real estate Certified professions Sports, media and entertainment

25. 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

26. 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

27. 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

28. 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

29. 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

30. 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

31. 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

32. 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

33. Philanthropic Attitudes Giving is confidential and haphazard Personal connection to the organization is essential Recognition is not always wanted

34. 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

35. 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

36. 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

37. 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

38. 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)

39. 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

40. 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

41. 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

42. 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

43. 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

44. 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

45. 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

46. 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

47. 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