All posts by Elisa Shoenberger

Neon One’s Donors: Understanding The Future of Individual Giving – Part 2

NeonOne set out to understand what individual giving looks like in the post-pandemic world. By reviewing many sources including academic journals, industry reports, blogs, and more, they have synthesized six questions:

  • Who are our donors?
  • What do our donors support?
  • When do our donors give?
  • Where are our donors?
  • Why do our donors give?
  • How do our donors give?

In Neon One’s Donors: Understanding The Future of Individual Giving – Part 1, we focused on the first three questions. In this Part 2, we are focusing on the last three questions.

What are key findings from the article?

  • Grants from donor advised funds in community foundations tended to stay in the community, according to the Lilly School of Philanthropy study. The researchers theorized that “the stronger local ties were, the more likely the donor was going to give to nonprofits in their community. They found that the longer an individual stays in the community that they live in, the more likely they are going to give to arts and human services organizations where they live.”
  • The top three states for private boat ownership are: Florida, California, and Massachusetts according to a Windfall study. The top three states for private plane ownership are California, Florida, and Texas. The top states for luxury car ownership are California, Texas, and Florida.
  • Donors prefer email for hearing about updates and appeals (48%) followed by direct mail as the preferred channel at 21% according to Data Axle.
  • There are three primary motives for why donors give, according to Professor Jen Shang, Institute for Sustainable Philanthropy in the UK. They are situation-based, relationship-based, and identity based. The report summed up the difference between the three motives: Situation-based motivations are often triggered by sudden changes in the environment, and individuals respond by giving. Relationship-based motivations are when donors give based on their connection to an organization. Finally, identity-based motivations focus on giving as a way for the donor to express who they are.”
  • Donor acquisition went up in 2020. “The percentage of donors acquired in 2020 who gave again in 2021 was at an all-time high in the first quarter and remained strong through the first half of the year.” But its unclear how many nonprofits closed their doors or stopped fundraising.
  • The study found that while only 10% of US households have wealth in cash, 80% of donations are cash. “Nonprofits that receive stock donations see 55% higher fundraising growth than those that only accept cash.” You can check Schedule M of your organization’s IRS Form 990 to see if you received reportable asset gifts.
  • Double the Donation estimated that $2-$3 billion was donated through matching gift programs. But estimates suggest that $4-7 billion may be going unclaimed since many donors may not know their gifts are eligible to be matched by their employers. Even more striking is the finding that “84% of donors are more likely to donate if their gift is matched.”
  • Corporations are now offering donor advised funds (DAFs) as an employee benefit. Similar to United Fundgiving campaigns of the past, employees can designate small amounts from payroll to go into these DAFs.Firms outside of Fidelity and Charles Schwab are working with companies to provide these services.
  • Dr. Russell James’ research found that while only 5% leave a gift to a nonprofit in their will, 33% would consider it if they were asked. Like Matching Gifts, that’s a lot of money left on the table.
  • Recent research found that recurring gifts are more likely to start in January than December. That should impact messaging for nonprofits about the importance of these gifts. Plus, previous research has shown that recurring givers “have a retention rate of 90% and that recurring givers are six times more likely to leaven an organization in their will or make a legacy gift to an organization.”

What can I do as a result?

  • “Think like a donor,” explained philanthropist Lisa Greer in her special aside in the report. What would a prospective donor want to see? Move away from transactional relationship with donors. Don’t over solicit! Remember that they are getting a lot of emails from nonprofits and companies every day. Engage with them like they are people. Because they are!
  • Consider how your messaging reflects the different motives for giving. Are you appealing to the donor’s sense of identity or situation-based identity? Are you giving donors the ability to give to satisfy their image of themselves?
  • Examine how your organization is talking about giving from assets, such as stock and property. As we’ve noted before, the largest gifts come from assets, rather than income.
  • Explore how your organization is educating donors about matching gift potential. That is a really easy way to get in more dollars without too much effort.
  • Review how your organization talks about recurring giving. Are you asking? When are you asking?
  • Finally, remember that people want to give; they sometimes just need to be asked! Authentic communications with your donors will build the strongest relationships. Asking can be a natural part of an ongoing conversation your organization has with the donor, instead of rote solicitations sent according to a schedule disconnected from the donor relationship.

Additional Resources

Charities Aid Foundation World Giving Index 2022

What is this Report?

The report is an annual report that looks at global giving focusing on three areas: helping strangers, donating money to charity and volunteering time. The report has surveyed 1.95 million people since 2009. For 2022, CAF included data from 119 countries, which was 90%+ of the total adult population on the earth.

What are key findings from the article?

World Giving Index 2022
  • Sixty-two percent of people reported they helped a stranger last year. This is up from 55% for 2020 and the highest percentage of people since the CAF report began.
  • Thirty-five percent of individuals gave to charity in 2021.
  • Low-to-middle income countries represent the majority of most generous countries in the top ten most generous list, a change from before the pandemic. In 2018, high income countries dominated with 7 out 10 countries in the most generous list. But in 2020, the number switched to 7 low-to middle income economies in the top ten. 2021 saw a rise in high income countries in the list but six out of ten are still classified as low-to middle income.
  • Indonesia retains its top spot as the most generous country, fifth year in a row. Kenya is second most generous, followed by the United States, which has returned to the top ten list.
  • The Ukraine is the only European country in the top ten most generous countries, jumping from 20 to 10 in 2022.
  • Some countries may define charity differently from others, which may adversely reflect their scores. For instance, the report suggested that some countries who scored low on helping a stranger may have strong safety nets (France, Switzerland, etc.). Japan scored low on generosity but the report suggested that “what might be perceived as charity in the United States is likelier to be understood as responsibility in Japan.”
  • The countries with the largest percentage of people donating money are the following:
  • Indonesia -84%
    • Myanmar – 73%
    • Netherlands -68%
    • Iceland – 67%
    • United Kingdom – 65%
    • Australia -64%
    • Malta – 64%
    • Thailand – 62%
    • United States – 61%
    • New Zealand – 61%

What can I do as a result?

  • Remember that people can give in different ways and engage them. The CAF report breaks down generosity into helping a stranger, giving to charity, and volunteering. Sharise Harrison, Director of Prospect Management and Research at Loyola University Chicago, said it best in an interview with Aspire in 2022: “A good prospect is some institution, organization, or individual who is likely to be engaged, believes in your organization and will provide not only monetarily, but also volunteer time.”
  • Specifically, review how you are engaging volunteers. Neon One reported that 53% of people who support a nonprofit decide to volunteer there; 39% volunteer first, then give to the nonprofit. How is your organization engaging with volunteers? And vice versa?
  • Make sure to understand people in different countries understand giving and helping others. Some countries may see things as charitable that other countries don’t due to differences in perception. Like everything in philanthropy, it’s about creating relationships and making connections. Philanthropic culture is not the same everywhere.
  • While organizations tend to target high income countries for international donations, the report suggests that low-to-middle income countries are stepping up their philanthropy. Everyone can find a way to contribute but they have to be respected and brought to the table.
  • As always, ask for contributions! Even though most countries have reopened fully, generosity levels are still up. That suggests that more people see the need to help their fellow strangers.

Additional Resources

Neon One’s Donors: Understanding The Future of Individual Giving – Part 1

What is this Report?

NeonOne set out to understand what individual giving looks like in the post-pandemic world. By reviewing many sources including academic journals, industry reports, blogs, and more, they have synthesized six questions:

  • Who are our donors?
  • What do our donors support?
  • When do our donors give?
  • Where are our donors?
  • Why do our donors give?
  • How do our donors give?

Due to the length of the report, Aspire will focus on the first three questions. The second part will be published in 2023.

What are key findings from the article?

  • Typical demographics of a “generous donor” are: Affluent, college graduates, homeowners, people aged 55+. But priorities are different between generations. Older generations give to emergency relief but younger folks tend to give to children’s charities and animal-related causes.
  • Black families gave the largest proportion of their wealth to charity. Studies also show that Latino households are more likely to have generational giving traditions. “The Vaid Group and Advancement Project for Democracy, one of the key findings was that “POC donors are much more likely to live in cross-class families and communities, where the impacts of the racialized wealth gap are very apparent. This fuels a fire towards upward class mobility and a desire for community uplift. Giving by these donors has unique features that emerge from the economic, historical ethnic, and racial experiences of each community, and other features that are shared across ethnicity and race.”
  • There’s a correlation between giving and volunteerism. In a survey by Today’s Philanthropic Landscape, 53% of people who support a nonprofit subsequently volunteer there. 39% volunteer first, then give. Only 8% do neither!
  • GivingTuesday’s Data Collaborative found that “75% of GivingTuesday are repeat donors, which far outpaces the industry average retention rate of 45%.” Even more striking,  84% of donors said that GivingTuesday made them want to give more in their communities.
  • Donors support several charities annually, from five to seven. The report quotes Mark Phillips of Bluefrog Consulting who said, “They are not your donors; you are one of their charities.”
  • Donor attrition is a real thing. Of first year donors, 80.8% are unlikely to give a second year. Asha Curran & Woodrow Rosenbaum at GivingTuesday ask in the report if part of the problem is the sector’s reliance on hard data instead of appealing to people’s emotions.
  • Eleven-thirty a.m. on Thursday is the most likely day of the week that donors give online. And contrary to popular thought, December is not when the vast majority of giving is made. The report estimates that 17% – 22% of revenue from fundraising is in December.

What can I do as a result?

  • Consider how your organization is engaging your donors, especially first-time donors. We all know that keeping a donor is a lot less expensive and less work than getting new ones. So how many first-time donors drop off at your organization? Lisa Greer, a donor mentioned in the report, said it best: “think like a donor. Remember how many emails they are likely sifting through each day, the volume of texts and calls flooding in. Consider how many companies are competing with you to earn their support. Bombarding your donors with fundraising requests will never be as effective as clearly communicated, professional two-way communication that demonstrates your appreciation and respect for them – along with your dedication, as an organization, to your mission.”
  • Consider how your organization works with non-white donors and constituents. How are you treating them? How are you (or are you not) engaging them? Are you cultivating non-white donors? Asking them on your boards? Do your fundraising materials reflect the people in your constituency?
  • Consider how encouraging first-time donors to volunteer can help further engage them for the future! And also look at your volunteers. They may be low hanging fruit, waiting to be engaged to donate to your cause.

Additional Resources

Boston Consulting Group Global Wealth 2022

What is this Report?

The Boston Consulting Group’s 22nd annual report looks at global wealth as well as the field of wealth management. Ultra-high net worth individuals are those individuals with assets over $100M.

What are key findings from the article?

  • Global wealth expanded by 10.6% in 2021. It’s the fastest rate in a decade with $26 trillion in new wealth. BCG credits gains were made in corporate profits and real assets. The company noted the resiliency of wealth growth despite the pandemic and the Great Recession.
  • However, BCG warns of destabilizing factors of global inflation and Russia’s invasion of Ukraine. Their models suggest that there would be a short-term decrease in wealth but then an average rate of growth at 5.3% through 2026. The company also expects inflation to stay high in 2022 but decrease in 2023.
  • Asia-Pacific and Oceania (but not Japan) is projected to have the largest growth of 8.4% through 2026. Middle East and Africa would be next with 5.4% and then North America at 4.1%. Western Europe would drop to 4%.
  • Sustainable investing is growing fast. Investors are keen on net-zero, which means that the amount of greenhouse gases produced, and gasses taken from the atmosphere are zero. Companies have a goal of becoming net zero by 2050 but investors want changes now. BCG believes that by 2026 the asset class of sustainable investing will rise be 8%-17%, a rise from 4%-11% today. Wealth managers will have to consider climate data when making recommendations for investments.
  • The report noted: “Responsible investing—which loosely considers environmental, social, and governance (ESG) factors—is not the same as sustainable investing.”  The report defines sustainable investing as including investing in companies with top sustainable sectors. Broader sustainable investing excludes investments that fail to sustain measures like net zero by 2050. It excludes things detrimental to the world such as weapons and war manufacturing.
  • Cryptocurrency will grow 4 to 5 times bigger before 2030. BCG makes this prediction despite the recent turmoil in the sector. Although cryptocurrencies are 90% of the space, there is a growing interest in NFTs, crypto custody and insurance, mutual funds, crypto options and futures and more. BCG thinks there will be regulations in the future. Blockchain-based decentralized finance, known as DeFi, attracted more than $200 billion in assets since April 2022. Major financial institutions such as Wells Fargo, JP Morgan Chase have hired people in crypto-related jobs since 2018.
  • Digital wealth management (WM) companies have grown significantly, attracting $14.5 billion in 2021. Digital WM uses financial technology, sometimes automation, to provide wealth management services to its customers, usually completely remotely. These are younger companies, many formed in the past 15 years. Examples include Marstone, Yield Stone, and StashAway.

What can I do as a result?

  • While investors are becoming more interested in sustainability and net-zero, prospective donors might become interested in how your organization is implementing/considering these areas. Even if you aren’t a nonprofit with an environmental focus, these concerns about environmental impact are going to expand in future areas, not just the world of wealth management.
  • While extremely volatile, crypto is likely here to stay. While many think we are seeing the final hemorrhaging of the cryptocurrency, it’s significant that BCG thinks it will continue. How prepared is your organization to accept it? Or has your organization made a choice not to accept it due to ethical concerns, such as environmental cost, etc.? As noted in previous blog posts, the industry is new and there will be startups that will fail and others succeed, just as we have seen with other industries.
  • But cryptocurrencies and NFTs are not all there is to crypto. Decentralized finance is likely to grow, and a new class of prospects may come out of that industry with money to donate.
  • With the increase in digital wealth management, more people have access to invest in private equity, private debt and pre-Initial Public Offering (IPO) participation that was originally limited to top investors. Digital WM can bundle these investments with multiple individuals. This means that more prospects may have investments, but may be using digital services instead of traditional wealth management firms.

Additional Resources

Review of Women Give 2022: Racial Justice, Gender and Generosity

What is this Report?

This annual Women Give report focuses on different aspects of women’s philanthropy. This year’s report looks at gender, philanthropy, and racial justice. It includes survey data given to a sample population of 2,073 in May 2021.

What are the Key Findings from the Article?

  • Women have played important roles in racial justice movements and social change movements for centuries. Black women, in particular, have played significant roles in many movements but have not gotten the credit they deserve, due to both racism and sexism.
  • Philanthropy is expansive; it’s not about giving money to organizations. It can include direct giving to individuals, families, communities, mutual aid as a whole, support for Minority-owned businesses, Minority institutions like Black churches, etc. The report defines three categories of giving: direct support to families and individuals impacted by racial justice; grassroots organizations like Black Lives Matter, Bail funds; and Large Established organizations like the Historically Black Colleges and Universities and Urban League.
  • While corporations were lauded for giving to racial justice, The Washington Post showed that 90% of the $50 billion committed to racial justice were not grants. They tended to be loans or investments, which would benefit the corporations.
  • About 1 in 7 US households gave money to racial justice causes in 2020. 42% of households support racial justice broadly, but only 14% give money to racial justice causes. There is room to grow!
  • Twenty-three and half percent of households supported racial justice in the US. Support took many forms including giving money, reaching out to elected officials, donating to political candidates who support their views, volunteerism and more.
  • The average racial justice donor is more likely to be younger, a woman of color, have a college degree, identify as LGBTQ+, unmarried, and working. The survey findings support the social identification theory – people are more likely to give to groups that they identify with. However, the report notes that it does not quite hold up for LGBTQ+ and race, but they may give to marginalized communities since they have been marginalized themselves.

What Can I Do as a Result?

  • Remember that support does not have to be strictly donations to nonprofits. People give in many ways, which may not fit into the traditional view of philanthropy. When talking or learning about prospects, keep an ear open for volunteerism, political activism, mutual aid, religious giving, etc. Find easy and effective ways to collect and record this information in your donor database.
  • Don’t forget to appeal to women and people of color. Do you know how your organization’s communications look when viewed through the eyes of women and people of color? How are you listening and responding to these populations’ needs and desires?
  • Can your organization see women and people of color? Can you sort and filter for single women in your donor database? Can you create opt-in opportunities for people of color to be recorded as such in your donor database? This might look like gifts to a specific program fund or participation in certain events that demonstrate identification with or affinity for people of color.
  • As the report noted, there’s room to grow with support for social justice. Organizations or programs classified in this area might want to see how they can best approach these demographic groups to expand their work and meet their philanthropic goals.

Additional Resources

Review of Fidelity Charitable Giving Report 2022

What is this Report?

The report is an annual report of Fidelity Charitable donor advised giving for the prior year. It explores both giving to Fidelity Charitable donor advised accounts as well as giving from donor advised funds to charities.

What are key findings from the article?

  • Fidelity Charitable donors gave $10.3 billion in 2021, a 41 percent increase from pre-pandemic levels. It’s a 13 percent increase from 2020. Grants went to over 187,000 organizations.
  • People gave $331 million in cryptocurrency to their donor advised funds in 2021. That’s up from $28 million in 2020! Sixty-six percent of all donations to DAFs were not-cash, including non-publicly traded assets and publicly traded securities.
  • Fifty-one percent of DAFs have balances under $25K. Thirty-eight percent have balances between $25K and $250K. Eleven percent have more than $250K on their balance sheets.
  • Ninety-one percent of DAFs made at least one grant in 2021. Sixty-four percent gave the grant to charities to be used “where needed most.” Forty-eight percent were re-grants; 27 percent were scheduled grants to the same organization; and 25 percent were grants to new organizations, suggesting stability in giving.
  • Four percent of donors were anonymous. Fourteen percent only included the Giving Account name while 82 percent included donor name and address.
  • Religion remains number one for distribution of grant dollars, followed by human services and education. Human services decreased slightly from 2020 giving. However, the organization that has received the most DAF grants was Doctors without Borders, again number 1, followed by St. Jude Children’s Research Hospital and then the American National Red Cross. Some grant levels are returning to pre-pandemic levels.
  • Three billion dollars was allocated to impact investments, up from $1.8 billion in 2020.
  • Donors also made $11.7M of recoverable grants to charities. It’s like a loan where charities had to achieve certain milestones “before returning the funds to Fidelity Charitable for future recommendations.”

What can I do as a result?

  • Make sure you advertise that your organization accepts gifts from DAFs. A campaign to target donor advised funds might be another option. There’s a lot of money flowing in and out of donor advised funds. Plus, we know that recurring donations are a real boon to nonprofits. With 75 percent of donations from DAFs going to charities that had already received prior gifts, there’s a real opportunity of turning a one-time gift into a recurring one!
  • Thank your donor advised fund donors. The report confirms that only 4 percent are completely anonymous. Send thank you’s and make phone calls to this segment, provided they have not asked you not to contact them. Just because they give through a gift vehicle, that doesn’t mean they wouldn’t appreciate that special touch. It might make the difference between that one-time gift and a yearly one.
  • Advertise if your organization can convert non-cash assets. With 66 percent of all donations to DAFs as non-cash assets, people are looking for a way to donate these hard-to-convert items. If your organization can deal with these assets, you should let people know. That way, they could come to you instead of creating a DAF.
  • While DAFs have their controversies, they are here to stay. The time to get ready to accept donor advised funds is now.

Additional Resources

Book Review | The Wealth Hoarders: How Billionaires Pay Millions to Hide Trillions

In April 2021, Forbes reported that billionaires’ wealth increased by 35% (or $1.2 trillion) since January 1st, 2020. Now compare that with the significant hardship and income loss that non-billionaire Americans have faced since the start of COVID-19. For example, in June 2021, Jeff Bezos blasted off into space with his own rocket, despite criticism about underpaying his own workers.

Chuck Collins’ The Wealth Hoarders explores how people like Bezos and his fellow billionaires are using wealth management (or what Collins calls the Wealth Defense Industry) to avoid paying their fair share of taxes. His work is a stunning indictment of the wealth management system including the wealth managers, lawyers, real estate sellers, and more who help the Ultra High Net Worth (UHNW), which Collins defines as having over $30M in financial wealth, protect their wealth from taxes and debtors.

Even more striking, Collins makes the case that the US, not Cook Island or the Bahamas, is the biggest tax haven in the world right now.

Who Should Read This Book?

Prospect researchers are always trying to understand how people think about wealth and how they hold it. As researchers, we probably have come across some of the tactics that Collins talks about, such as finding property held by LLCs or discovering businesses incorporated in Delaware.

This book helps us better understand how the UHNW manage their assets and house their wealth.

The book provides a useful breakdown of the different ways of holding and hiding wealth. We’ve heard about the Panama Papers and the more recent Pandora Papers that told us what we already knew – that what we can see from publicly available sources is only the tip of the iceberg.

But what I found most impressive was his discussion about family offices in chapter 4. The “All in the Family Office” chapter does a deep dive into family offices, which are a way for families with over $100M or $150M manage their wealth. It’s not something we stumble upon frequently in our work but obviously, it’s a major wealth indicator. Experts estimate there are between 7K-10K family offices around the world with a good chunk originating in Boston, MA. I also found it fascinating to learn that families with $25M may participate in multi-family offices!

What was most stark and useful for the prospect researcher is an exploration of the attitudes that the UHNW have about their wealth. At the beginning of the book, Collins explains that he comes from a privileged background as an heir to a Midwest meat packaging company. He talked about attending an event for people like him to better understand how to manage their wealth. When he poses the question about the discomfort of having all this wealth, he is quickly advised that it would be class suicide to touch the principal of his fortune. Giving away to charity from your income is fine, but it would be selfish to touch the principle, he’s advised by his friend Dee, a very wealthy woman with her own family office.

This friendship with Dee in particular is quite striking. Collins may be young and idealistic, but he’s uncomfortable with the status quo. Dee, on the other hand, is quite philanthropic and has done her bit to “give back,” but assured with her place in the world and the right of wealthy people to keep their money. Their arguments about wealth and keeping it provide a starting point for Collins’ entire book.

Where Does It Take You?

He divides the book into 12 sections – three preludes, an introduction, seven chapters, and an epilogue. The first prelude explores his “origin story” where he is at a weekend conference put on by a local foundation and family office to discuss wealth. He also explores his relationship with a woman who has her own family office who tries to convince him that touching his principle is a big mistake.

The second prelude explores the Blue Hippo Swindle where CEO Joseph Resnin swindled low-income people out of a lot of money, was successfully prosecuted, but not a dime was paid out to his victims or the government because of his success in hiding his assets. The third prelude is an example of how Isabel del Santo, a wealthy Angolan, managed to extract millions of dollars from her country and squirreled it away, thanks to the Wealth Defense Industry.

The first chapter explores the cost of wealth hoarding, including the threat to democracy, shifting tax burden onto everyone else, and more. The second chapter then looks at the people who make up the wealth management including insights from Brooke Harrington, author of Capital without Borders, and a former attorney in the industry who is working to challenge their practices.

Chapter three looks at the “tools of the trade,” talking about shell companies and trusts with special consideration of Delaware and South Dakota.

Chapter 4 looks at family offices as discussed above. In Chapter 5, titled “The Wealth Hiding in your Neighborhood,” he explores other vehicles for housing wealth – specifically art and property. I watched this play out in the recent documentary about the recent Leonardo Da Vinci painting “Salvator Mundi,” where the painting was stored in one of these storage facilities. Storing art in a Free Trade Zone allows the wealthy to store their wealth in different assets and avoid having to pay duty taxes.

He also does a deep dive into the buying of real estate as a place to store wealth, rather than wealth generating (like renting them out or flipping them). He even explores how this practice erodes communities and city centers, drives prices up, reduces available affordable real estate, and hollows out neighborhoods.

Chapter 6 looks at the justifications that people make about these practices. Collins focuses on the excuse that many people make that these practices are legal, but points out that these same people are influencing the laws. The second justification is that the wealth industry is merely giving customers what they want. Collins argues that there is an interest in doing what is best for society as a whole, and not just a tiny portion of the populace.

Chapter 7 concludes with recommendations of the policy changes that end these practices and increase transparency. The epilogue is an appeal to people not to work in wealth management.

Is It Worth the Purchase Price?

At $21.99, this book is worth the price. Even if you may disagree with many of Collins’ points about the sources and causes of wealth inequality — the book has a blurb from Senator Bernie Sanders — the book provides some valuable insights into how the wealthy keep and hold their wealth as well as their thoughts about it. For me, the chapters on family offices and different ways of keeping wealth were well worth the price all by themselves.

The book also helps prospect researchers understand a little bit more about what we are seeing when looking at sometimes confusing property records or company incorporation documents. Sometimes the information is missing…on purpose.

It also made me realize that people who work in wealth management are worth a second look at themselves when we do profiles for our organizations. While they may not command the same amounts of money as their clients, they work in a lucrative industry and may be open to philanthropic giving.

Ultimately, the book is a welcome successor to Brooke Harrington’s Capital without Borders and well worth a read by anyone thinking about wealth in the United States.

Additional Resources

Book Review | Stop The Nonprofit Blame Game

In business school, most of my classes required group projects for the final. While it was a new experience to work in a team setting, I learned there were really three kinds of experiences. The first was magical; the group worked together harmoniously with each person bringing their expertise to the table. Ultimately, the final project was greater than the sum of its parts.

Then the second, where the group was held together by one or two people who ended up doing most of the work and/or pulling the other members together. It was very frustrating and maddening. I wanted to pull my hair out! The third is a mix of the two. Maybe most of the group was on point but then there was that one person who wouldn’t do their work or worse.

Years later, when I joined my first board, I realized that boards are a lot like group projects. In fact, they are what group projects are trying to instill in us. Sadly, my experience with a board resulted in me dropping out, frustrated, and angry that my voice hadn’t been heard.

However, when reading Hardy Smith’s Stop The Nonprofit Board Blame Game: How to Break the Cycle of Frustrating Relationships and Benefit from Fully Engaged Boards, I realized that my experiences are not unique or uncommon, but fairly typical.

His book gives step by step advice on how to end board member frustration (and vice versa — nonprofit employee frustration with board members), to make the board a positive experience for everyone, the board members, staff members, and most importantly, the nonprofit itself.

Who Should Read This Book?

Smith identifies two major populations that should read this book. The first are staff members who work with boards. That might mean the board liaison (if there is one), the top leadership, and major gift officers who work with board members. This book will help them understand what they need to do to create a positive board experience, including have clear expectations of what board members are supposed to do, communicate effectively, fundraising expectations, have measures in place to deal with issues on the board including board removal as a last resort.

Anyone who is a board member, or someone who is considering board membership, would benefit from reading the book as well. It will help them

figure out what how to communicate what they need from board members, what they need to hear from board members. It will help them understand where there may be breakdown in communications.

I would add that prospect researchers would benefit from this book. Since we are often asked to find prospective board members, write bios for them and current members, and even vet prospects, this book helps us understand a bit more about what goes on behind the curtain. Plus, the communication techniques might be helpful in our work with gift officers and nonprofit leadership, or even working with board members if our position requires it.

Where Does It Take you?

The book is divided into four parts: Break the Cycle of Dysfunctional Board Relations; Get the Right People; Create a Positive Board Experience; and Adapt to Meet New Challenges.

The first section explores the problem – why are boards not working for the nonprofits or for the board members? The section includes research that Smith conducted about the disconnect between boards and the nonprofits they purportedly serve. He determined that board members have a passion for volunteer work, but they are frustrated with their experiences. From his work, he explains that nonprofits systematically fail to inform board members about the expectations of their service, such as time commitment, fundraising requirements, etc.

The second explores the importance of finding the right people, or as Smith aptly puts it “recruiting” with purpose and process. Finding the right people at the right time for the right role is critical. To ensure a good board experience, nonprofits shouldn’t wait until the last minute to fill board absences; they should do the work well ahead of time to find the right people. (That probably means more work for prospect researchers, but I think we would all welcome that work). In other words, nonprofits

should recruit people not to fill a position that happens to be empty, but have a list of researched candidates for board positions at the ready.

Smith also talks critically about the importance of why prospective board members say yes or no. Listening is key!

The third section explores the board experience after the prospect has accepted the board position. While real communication is key to all of Smith’s recommendations, this section really dives into the many ways nonprofits and board members can work to make the overall experience a positive one.

What really resonated as a researcher was the section on getting to know your board members. Smith writes: “Understanding what your volunteer’s personal connections are to your cause and making sure those needs are being met will help your organization benefit from dedicated commitment.”

I think we as researchers would agree 100 percent! I also appreciate that there’s a chapter on the importance of diversity since that’s been a hot topic in nonprofits for several years.

The fourth section explores how boards need to embrace change. I particularly appreciate how he talks about how boards have to be intentional in changing the board. Intent is not the same as action. Board members and nonprofits have to move forward together to make the necessary adjustments in board recruitment, board expectations, meeting structure, etc. in order to make a positive experience for all people involved.

Is It Worth the Purchase Price?

Yes, this book is an important contribution to the world of nonprofits. It’s well worth a read though it is occasionally repetitive in its messaging. But given the disconnect between many boards and their nonprofits, the messages that Smith is trying to impart may need to reiterated until they are implemented. Communication, intentionality, forward thinking are all key parts of Hardy Smith’s message.

Hopefully armed with this knowledge, more board volunteers will have positive experiences that will enrich and deepen the work of the nonprofits that they serve.


Charities Aid Foundation (CAF) World Giving Index 2021: a global pandemic special report – June 2021

What is this Report?

The report is an annual report that looks at global giving focusing on three areas: helping strangers, donating money to charity and volunteering time. The report surveys 1.6 million people interviewed since 2009.

What are key findings from the article?

  • One of fifth of all people around the globe volunteer.
  • Indonesia is number one in generosity. Eight out of ten Indonesians gave to charity and the number of volunteers were three times the global average. The countries in the top ten most generous countries changed dramatically. They are (in order):
    1. Nigeria
    2. Myanmar
    3. Australia
    4. Ghana
    5. New Zealand
    6. Uganda
    7. Kosovo
    8. Thailand
  • The United States, usually in the top five, fell to 19th in 2020. It has significantly declined in all three categories since 2016. Other countries usually in the top ten (United Kingdom, Ireland, Canada, the Netherlands) also dropped out of the top 10. Overall, developing countries are seeing participation in philanthropy increase across the board; developed countries are showing some decline or stalling. The report finds that European countries dominated the list of countries least likely to help a stranger.
  • People were more likely to give to strangers than ever before. More than three billion people (over 55% of total population) helped a stranger in 2020. Six of ten countries that topped the list were in Africa. CAF attributes the high rates of caring for strangers to the African idea of ubuntu “described as the capacity in an African culture to express compassion, reciprocity, dignity, humanity and mutuality in the interests of building and maintaining communities with justice and mutual caring.”
  • Giving is up despite (or because of) the pandemic. 31% of people gave, and volunteer levels were unchanged in 2020.
  • CAF tracks the countries that have increased their World Giving Score in at least four out of the five past years. The Biggest risers are:
    1. Georgia
    2. Paraguay
    3. Ethiopia
    4. Bulgaria
    5. Vietnam
    6. Serbia
    7. Bangladesh
    8. China
    9. Ukraine
    10. India

What can I do as a result?

  • Look beyond the US and Europe if your organization has a global reach. There’s potential for philanthropy from other parts of the world, provided that your mission touches the country in some way. Check out if you have prospects in Indonesia, Kenya and Nigeria. However, the report did not focus on where the philanthropy went —in other words, did the money stay in the country or go elsewhere?
  • There’s money available for philanthropy. This is a theme that has shown up in many recent wealth reports. Some nonprofits were worried about asking for donations during COVID-19, but people still want to give to nonprofits, probably even more, as a result of the pandemic.
  • Think outside the box with your volunteers. Despite the pandemic, volunteerism did not decrease. How can your organization continue to engage your volunteers for your mission? After all, we know that volunteerism makes people feel good and more likely to want to give to your organization.
  • The drop in US in philanthropy is concerning. Consider examining how you are engaging donors — and when and how you are losing donors.

Additional Resources

Are NFTs the next best fundraising opportunity? And what are they, anyway?

As someone who writes about cryptocurrency and art (separately) for Aspire Research and other publications, I’ve been getting a lot of public relation emails about NFTs. A lot. I know earlier this year, an artist named Beeple sold “Everydays: The First 5000 Days” for $69.3M at an auction at Christies’ so maybe it’s big money that’s getting people’s attention.

I read this humorous example from a user named “queersamus”:

Imagine if you went up to the mona lisa and you were like “I’d like to own this” and someone nearby went “give me 65 million dollars and I’ll burn down an unspecified amount of the amazon rainforest in order to give you this receipt of the purchase” so you paid them and they went ‘here’s your receipt, thank you for the purchase” and went to an unmarked supply closet in the bank of the museum and posted a handmade label inside it behind the brooms that said “mona lisa currently owned by jacobgalapagos” so if anyone wants to know who owns it they’d have to find this specific closet in the specific hallway and look behind the correct brooms, and you went “can I take the mona lisa home now?” and they went “oh god no are you stupid? You only bought the receipt that says you won it, you didn’t actually buy the mona lisa itself, you can’t take the real mona lisa you idiot. You CAN take this though, and gave you the replica print in a cardboard tube that’s sold in a gift shop. Also the person selling you the receipt of purchase has at no point in time ever owned the mona lisa.

Unfortunately, if this doesn’t really make sense or seem like any logical person would be happy about this exchange, then you’ve understood it perfectly.

I vaguely knew what they were – something to do with unique digital images – but knew there was a lot of backlash against them from the artists I follow on Twitter. An artist tweeted last week that they discovered that their early work was turned into NFTs without their consent. The Atlantic previously published a piece about how NFTs don’t help artists. There’s also concerns about the environmental costs to compute NFTS.

But there was a lot of money involved so, as a researcher, I became naturally curious about what was going on. Chronicle of Philanthropy reported that New Jersey based health clinic Sostento received about $58K from the sale of “The NFT Guild Philanthropist – Healthcare Heroes.” The artist also matched the sale price. And most intriguing, Chronicle reports, “The NFT will also continue to benefit charities in the future. It was created with a provision that obliges proceeds of future sales to be given to charity.”

Light bulbs went off in my head, much like when I realized how useful 3D printing is after watching a TED talk on 3D printing organs to solve the organ donor crisis.

So, What Exactly is an NFT?

NFT stands for Non-Fungible Token. Investopedia defines it as “a cryptographic assets on blockchain with unique identification codes and metadata that distinguish them from each other.” Or more simply, it is a digital asset, such as a picture, a sound, etc. Wall Street Journal defines NFTs as “vouchers of authenticity for digital assets.” Someone likened it to like a trading card, which makes sense for me.

Harvard Business Review provides an in-depth explanation of what that exactly means:

NFTs have fundamentally changed the market for digital assets. Historically there was no way to separate the “owner” of a digital artwork from someone who just saved a copy to their desktop. Markets can’t operate without clear property rights: Before someone can buy a good, it has to be clear who has the right to sell it, and once someone does buy, you need to be able to transfer ownership from the seller to the buyer. NFTs solve this problem by giving parties something they can agree represents ownership. In doing so, they make it possible to build markets around new types of transactions — buying and selling products that could never be sold before, or enabling transactions to happen in innovative ways that are more efficient and valuable.

The thing that gets me in that description is the idea that “markets can’t operate without clear property rights.” Not sure if that makes sense since we have been functioning just fine on the internet without NFTs – for decades. Sharing images and videos without attribution is a problem, and tagging with data would help with that. Except you can still download an image and share it without crediting the creator if I understand things correctly.

Plus, there’s big concerns on how it isn’t doing what people hoped – helping artists. In the Atlantic earlier this year, Anil Dash who worked on putting together one of the first NFTs with artist Kevin McCoy in 2014 said, “Our dream of empowering artists hasn’t yet come true, but it has yielded a lot of commercially exploitable hype.”

He later writes, “In the meantime, the current NFT market is drawing an extraordinary range of grifters and spammers. People are creating NFTs of artists’ works without asking permission or even letting the artists know.”

Harvard Business Review does point out that NFTs are “a completely novel asset class and we don’t see new assets classes appear that often.” Granted we just saw the creation of crypto as its own asset, but it’s useful to think of it in those terms. Designating NFTs as an asset puts it in the same category as real estate, jewelry, and stocks and bonds.

And because it really sounds like an Onion article, Wall Street Journal recently tweeted: “Your grandmother gave you cash in an envelope for the holidays. Should you consider giving her an NFT or cryptocurrency?”

The Chronicle of Philanthropy pointed out that NFTs occupy an in-between space from a regulatory standpoint: “Regulators, including the Securities and Exchange Commission, are beginning to examine how and when to treat NFTs as collectibles or securities. The eventual result of those decisions could have ramifications for charitable-accounting offices.” Cryptocurrencies, in contrast, right now are treated as property, not securities.

The Gift that Keeps on Giving

But the second part of the explanation about “enabling transactions to happen in innovative ways” does catch my eye. We already see it with respect to the Sostento gift above; subsequent sales of the NFT will give a portion back to charity.

Chronicle of Philanthropy also reported how other nonprofits are making money off of NFTs, like Beneath the Waves that auctioned off “dozens of NFTs that each represent a real-life shark tag, with starting prices ranging from $500 to $20,000. The owners get the right to name their tagged shark and will receive updates on its movement through the oceans.”

Macy’s auctioned off ten of its Thanksgiving Day parade balloons as NFTs and planned to give the money to Make-A-Wish Foundation of America. And if they are resold, 10% will go to Make-A-Wish.

Recently, Shutterfly announced that it was auctioning off NFTs featuring fashion icon Iris Apfel to raise money for Boys & Girls Clubs of America. One-hundred percent of the proceeds will be given to the nonprofit, including a $25K donation from Shutterfly.

Now all that is very intriguing to me.

But that’s not all. Harvard Business Review points out that NFTs are almost functioning like memberships that get you into special communities. For example, “The Bored Ape Yacht Club, comprises a series of NFT ape images conferring membership in an online community. The project started with a series of private chat rooms and a graffiti board, and has grown to include high-end merchandise, social events, and even an actual yacht party.” Restaurants are reportedly using NFTs for reservations as well.

This might have some interesting uses by nonprofits, especially museums and other membership based nonprofits.

The Verdict

Digging into NFTs has been useful to deepen my understanding on a topic that I had initially written off. I see the potential, but the environmental costs, the unregulated landscape, and the challenges that artists are facing are some big problems. I’m not quite on board in the same way that I am with cryptocurrencies.

NFTs are so new, in a way that cryptos are not, that I think with time and some regulation, maybe NFTs could develop from “passing fad” and grow some legs. I’m thrilled that charities are using NFTs to generate donations, whether by accepting NFTs (through sales) or auctioning them off.

What is your organization doing about NFTs? Is your organization ready to accept cryptocurrencies? Please comment and let me know. I’d love to hear your experiences and thoughts about it!

Additional Resources