Giving USA Archives - Helen Brown Group

January 11, 2024 By Melissa Bank Stepno

Corporate Philanthropy and Pledge 1%

By my unofficial survey, almost all prospect researchers and gift officers have heard of The Giving Pledge, the effort launched in 2010 by Warren Buffett, Melinda French Gates and Bill Gates to encourage the “world’s wealthiest individuals and families to dedicate the majority of their wealth to charitable causes.”

To date, there are 242 pledgers from 29 countries around the world. Most pledgers have penned a letter that explains why they decided to join The Giving Pledge. The letters also serve as a public commitment, and pledgers often talk about the types of causes that resonate with them.

If one of these pledgers is on your radar, assessing their broad capacity is simple – they are all capable of transformational giving. More importantly, you can frequently get a window into their philanthropic interests by reading their letters, navigating to their family foundation websites (many have one!), or through any of the other resources we typically use to research philanthropic giving patterns.

Pledge 1%

Less well known is Pledge 1%, which I will call the corporate philanthropy counterpart to The Giving Pledge. Founded in 2014 by Marc Benioff of Salesforce and Scott Farquhar of Atlassian, the 18,000 companies who have now signed Pledge 1% have agreed to contribute 1% of their equity, product, employee time and/or profits to the social good sector.

Rather than being singularly focused on one metric the way The Giving Pledge focuses on wealth, Pledge 1% champions flexibility, allowing each company to choose the approach that works best for them.

Some companies choose just one of the four categories, while others choose a combination. Still others deviate from the 1% threshold, sometimes committing more and sometimes committing less. Rather than holding firm on the parameters, Pledge 1% is “building a movement of corporate philanthropy” and aiming to instill philanthropy into corporate culture more substantially.

While any company can join, the movement specifically targets early-stage companies. The philosophy is that building philanthropy into a company’s DNA during its nascent stage will allow for a growing impact over time, especially with the understanding that each company’s goal is to scale up and become more successful. And, as Pledge 1% points out, it is easier to commit when there are fewer decision makers – like outside investors, board members, and large executive teams – involved.

Like The Giving Pledge, Pledge 1% is a worldwide effort. The companies that have committed to it span 100 countries and almost every industry that you can think of, from the tech industry to venture capital firms, to utilities, to apparel companies, to beauty product and food manufacturers and professional services companies – you get the idea.

While focused on corporate philanthropy, Pledge 1% is, in and of itself, a non-profit organization. To lean on the expertise of others, it has relied heavily on a partnership with the Tides Foundation, which provides them with strategic advice and philanthropic services, such as managing some of the donor advised funds and private foundations that companies may choose to fund.

To build regional momentum, Pledge 1% has partnered with preeminent non-profits and community foundations in major cities who can help “encourage and challenge” participation from companies headquartered in local communities. For instance, Pledge 1% Boston is spearheaded by the Boston Foundation and TUGG whereas its New York efforts are led by Robin Hood and Australian Philanthropic Services takes a lead role down under.

So, why should we care?

For starters, Pledge 1% claims that its signatories have already committed over $2 billion in philanthropic dollars. That’s a lot of impact. And, that’s only the dollars – it does not include the volunteer or pro bono hours being donated by employees of Pledge 1% companies or the free/discounted products that Pledge1% companies are offering to non-profits.

Consider Salesforce. Admittedly, they might be one of the largest companies to be part of Pledge 1%. Even so, their impact alone equates to $240 million donated, plus 3.5 million volunteer hours, plus free or discounted software to 39,000 non-profits. That’s a tremendous impact.

Further, Giving USA data shows that over the most recent 5-year period, corporate philanthropy is growing faster than any other source. In 2022, $30 million of corporate philanthropy was reported – a 23.3 percent jump since 2018.

Combined, all these factors indicate that corporate philanthropy is – and will continue to be – a bigger driver of philanthropy in the future.

How do I know if a company has signed the Pledge?

The simplest way is to search the list on the Pledge 1% website.

But, there’s more to it than just knowing which companies. As with The Giving Pledge, it is even more helpful to better understand the specific goals and objectives of each company’s philanthropic programming.

For many Pledge 1% companies, Googling the company name and “Pledge 1%” can lead you to articles and press releases that discuss the company’s commitment.

You may also find some good case studies (for the company you are interested in!) within the Pledge 1% Community Blog.

A company’s website is a good place to dig deeper, and some targeted searching can be helpful.

Look generally for references to the nonprofits – or types of nonprofits – the company supports financially, in product, or in staff volunteer hours.
Are there references or specific webpages that discuss sustainability, community affairs, community relations, social responsibility, etc. that might point you in the right direction?
What does the company’s employee benefits package look like? Do they offer matching gift programs, volunteer opportunities, etc.?
If the company publishes an ESG (Environmental, Social and Governance) or CSR (Corporate Social Responsibility) report, you’ll typically find some really great detail in it relating to both philanthropic initiatives and impact.

Lastly, for public companies, you may find some information in their SEC filings. The DEF14A (proxy statement) is a good place to start, but I have also seen references in S-1, 8K, 10-K and 10-Q filings.

Final Thoughts

If you are exploring how corporate philanthropy can help your nonprofit, it will be important to look more broadly than just the Pledge 1% participants. There are millions of companies that haven’t signed the pledge – and many are still deeply committed to their corporate philanthropy programs. Many of my search tips will work more broadly as well!

Image credit: Money gift – Pile US dollar banknotes wrapped with bright yellow ribbon by Marco Verch under Creative Commons 2.0

July 27, 2023 By Helen Brown

What giving reports can’t report (and what to do about it)

It’s giving report time of the year!

I imagine you’ve had a look at the Giving USA statistics by now and/or heard the muttering, garment-rending, and lamentations about the decline in giving in America and what it means for the future of philanthropy.

I can easily imagine that putting Giving USA together is a lot of work. I can’t imagine how many countless hours there are to check and re-check the numbers before publishing. I’d like to imagine a Giving USA that can count more things, better, and sooner, but that’s a tough ask for lots of reasons.

I want to be very clear right up front that this is NOT a bash-Giving USA article. I’m asking you to consider that the report is one data point of many. Just like prospect research involves Lexis Nexis and Dun & Bradstreet and talking 1:1 with a donor and an article in the Chronicle, Giving USA is one of many sources that you could study as you consider how to parse out giving in the USA.

You can’t count what you don’t have.

But, despite solid methodology, like everything in the world Giving USA is imperfect because they just don’t have access to all of the information. They’re doing the best they can with the information they have in front of them.

COUNTING MORE

What isn’t in front of them is the individualized amounts donated collectively via giving circles.

Or GoFundMe.

KickStarter.

Patreon.

Direct giving from one person to another. Venmo. Zelle.

What about microloans and other charitable investments?

Buying food and donating that instead of the cash?

Countless countless countless volunteer hours, which can be even more valuable than gold.

Anything not directly given to a 501(c)(3) won’t be counted. (But more on that in a minute).

A selection of direct-giving vendors

Let’s say you could even get totals or gift details from all of these sources individually. Who’s going to take the time to parse out designations on all of those gifts so they can be accurately categorized and reported on?

COUNTING BETTER

Let’s take a look at how Giving USA categorizes gifts to donor advised fund sponsors. Remember I said that anything not given directly to a nonprofit won’t be counted? Well, besides that, sometimes it’s not counted accurately. Here’s Giving USA on how they categorize gifts that set up a DAF.

How Giving USA categorizes DAF giving

Say someone donates their $5,000 to a national sponsor (like Fidelity Charitable, Schwab Charitable, or Vanguard Charitable – which are nonprofits) to set up a donor advised fund. Giving USA will count that donation under Public-Society Benefit.

If the donor sets up a DAF account at a community foundation (like the Silicon Valley Community Foundation, the Tulsa Community Foundation, or the Chicago Community Trust), that gift is designated by Giving USA as going to a foundation.

If a donor creates a DAF account at a single-issue sponsor (like a Jewish Federation or Rotary International, which sponsors DAFs), then the gift is designated by Giving USA as whatever that organization’s National Taxonomy of Exempt Entities (NTEE) code is. (“Religion Related” and “International, Foreign Affairs and National Security” respectively in this example).

So to illustrate: Let’s say this year I make a million dollar donation to set up a DAF at the Cape Cod Community Foundation. (hey, a girl can dream). That donation is categorized by Giving USA as giving to a foundation. Next year I’ll grant the whole million in equal parts to my university, an animal shelter, an art museum, an environmental organization, and to a food security nonprofit. But those grant designations are not tracked; the money’s been counted as originally gifted – I gave to the NTEE designation “foundations.”

Giving USA doesn’t have access to grant records from every DAF sponsor in the US (of which there are over 1,000). If they did, they could parse out the designation for each grant – or ask each sponsor to categorize each grant, designated to the right NTEE code.

But again, who’s going to take the time to parse out designations on all of those gifts so they can be accurately categorized and reported on? Hello AI? Have I got a job for you!

COUNTING SOONER

In your everyday research, you may have noticed that the IRS is, ahem, kind of slow in posting 990s. In a normal year, information that’s brand-newly-uploaded is from a foundation’s tax return from two years ago. The IRS is so behind now that they’re lagging even further behind that “speed” now.

What that means is that all of the resources that count on IRS data to estimate giving in America from foundations, including Giving USA, are consulting data that is at least two years old. Giving USA says that we won’t know what happened in foundation philanthropic giving in 2020 for sure until 2024:

Methodology estimating fdn giving 2020-22

You can’t turn on your phone or your computer or your radio or television without seeing/hearing another bit about how AI is taking over. How data-driven business and data-driven philanthropy are already here, now.

But for goodness sake, we can’t get accurate information from 2021, much less last year! I’d love for this to be a problem AI could actually solve – a real AI For Good hero journey instead of the Hal dystopian outlook.

So what am I trying to say here?

Yes, giving may have gone down. But it might not have. It might just be … different than it was 5 or 10 years ago.
Life’s coming at us fast. We just might not have the technological ability (now? yet? ever?) to be able to accurately count what counts.
Giving USA is just one report. It’s good and there are others that are good, too. We may need to piece information together going forward. For example, to track recent giving totals and designations in donor advised funds, check out these brand-new up-to-the minute reports by Fidelity Charitable, Schwab Charitable, and Vanguard Charitable which list how much they gave away last year, broken out by their DAF-holders’ giving interest areas.

August 22, 2019 By Helen Brown

Hidden gems in the 2019 Fidelity DAF report

Today I’d like to draw your attention to the Fidelity Charitable Giving Report, 2019 edition. You can download it for free here. The report summarizes Fidelity’s donor advised fund activity for the past year, and there are some important opportunities I noticed that I wanted to share with you.

In case you’re not familiar with Fidelity Charitable(™), it is the largest sponsor of donor advised funds (DAFs) in the United States. Fidelity is cagey about the total assets under management, but donations made last year from the superfund’s 204,292 (and growing) DAF donors totaled $5.2 billion.

While you might expect that a super-large fund of funds would be a great place for privacy-seeking billionaires to cache their philanthropic dollars, the median DAF size at Fidelity is $17,670. Just 8 percent of Fidelity DAF accounts hold over $250,000 in money waiting to be donated, but even so, that small slice of funders gave over 582 donations of $1,000,000+ last year.

That $5.2 billion in donations last year was an increase of nearly 20 percent over 2017. Fidelity says that the majority of donations – 60 percent – were specifically unrestricted. Normally with a DAF gift distribution, a donor can suggest a gift designation but the DAF sponsor – Fidelity in this case – can choose to honor or ignore the restriction.

Of course, they’d be operating at their peril to ignore the donor’s wish in all but the most outlying cases, so DAF managers generally pass that restriction along to the nonprofit. The fact that this growing number of Fidelity DAF donors largely gives unrestricted money is good news, considering that most foundations won’t cover overhead and major gifts from individuals tend to be restricted.

The report breaks down giving by recipient type and a companion piece slices the data by geography, and I found these two breakdowns fascinating:

Recipient type

DAF donors give differently than average Americans do (as described in Giving USA). Year after year, their pie charts show us that religious organizations receive the largest piece of the pie in terms of dollars. Last year, religion received 29 percent of total giving, which amounted to $124.52 million.

But although Fidelity’s DAF donors gave the highest volume of gifts to religion, the segment which received the most dollars was education, which at 29 percent of all giving was nearly double the amount of religious gifts, at 15 percent. Religion actually came in third place, just after ‘society benefit,’ which was 18 percent of DAF giving at Fidelity.

And that’s not unusual. In fact, according to the report:

Since Fidelity Charitable launched the Giving Report in 2013, education has regularly received the most yearly grant dollars; religion has received the greatest grant volumes.”

From a prospect identification / donor segmentation perspective, that’s pretty interesting, eh?

Geography

A companion piece to the report provides a closer look into what Fidelity calls the 2019 Geography of Giving, where you can drill down on each of Fidelity’s top 14 markets as it compares its “Top Cities for Giving“. They are:

Atlanta, Boston, Bridgeport, Chicago, Cleveland, Dallas, Denver, Los Angeles, Miami, Minneapolis, New York, San Francisco, Seattle, and Washington, DC.

There are all sorts of interesting statistics for you to find in each city’s one-sheeter. Take a look at Chicago, for example. Human services, religion, and education may be the top 3 charitable sector priorities for all Fidelity DAF donors in that city, but nestled among the top five most popular recipients of donations are two public media nonprofits.

Hmmm, that’s interesting! What about New York? The top three priorities are education, human services, and health, and (well, look at that!) at #1 for donations is New York Public Radio and at #4 is WNET. Again, two in the top five.

So of course I had to check out my home town, Boston. Top three priorities for Boston DAF donors? Just like New York, the top three are education, human services, and health. But look here: at number 3 for largest dollar support is the WGBH Educational Foundation (yay Masterpiece!) and at number 4, Boston University (which beside being a university also houses Boston’s other major public media station, WBUR).

In San Francisco, the number one spot for donations is KQED. In Atlanta, public media is at #4 (under the guise of the Atlanta Educational Telecommunications Collaborative).

If I were working in public media, I’d be paying a lot of attention to my Fidelity DAF donors right now (or maybe these numbers point to the fact that they already are…)

But even if you’re not in public media, there’s a whole lot more in these reports of interest to all organization types that can help you think creatively about donor engagement strategy. These are just two areas that I wanted to highlight that grabbed my attention. Take a look and see what information you find that’s relevant to your nonprofit – and if you find something that grabs you as fascinating, share it with all of us in the comments!

November 19, 2015 By Helen Brown

What’s Missing from Coutts’ Vault

I love a good wealth and philanthropy report, don’t you? And there are an increasing number of juicy ones out there now, as well. From the World Wealth Report and Giving USA to Charities Aid Foundation and the stellar Knight Frank reports, we’re awash in research riches.

A relative newcomer to these helpful reports about high net worth individuals is the Million Dollar Donors Report (MDDR) from Coutts Bank, which published its third annual report this week. It’s a global-view expansion of their former annual, the Million Pound Donors Report (2008-2012), which concentrated specifically on philanthropy in the United Kingdom. [Read more…]

June 27, 2011 By Helen Brown

Summer reading: wealth and philanthropy

With the publication of the always-worth-reading “World Wealth Report” last week, it reminded me that I wanted to mention to you a few white papers about high net worth individuals (HNWIs) that are well worth your time. They are:

The World Wealth Report 2011. CapGemini / Merrill Lynch.

FREE with registration.
Brief overview with additional links here; actual report in English here.
The WWR details high net worth individuals worldwide: where they live, what they spend their money on, how they allocate their assets, etc. and they break the information down by country or region to achieve even more granularity. A tidbit I found interesting in this report: women made up 27% of the global HNW population in 2010, up from 24% in 2008. From under a quarter to nearly a third in two years – what does that make you think about your prospect portfolios?

The Wealth Report: A Global Perspective on Prime Property and Wealth 2011. Knight Frank / Citi Private Bank.

Pdf version is FREE, click here. Hard copy also available with registration.
For researchers and front-line fundraisers specializing in international work, this is a must-read overview of already-hot and emerging high-growth regions, industries, and people with a focus on global wealth and real estate. Contains interviews with experts such as Rupert Hoogewerf of the Hurun Rich List and discussions of topics including venture philanthropy.

Bank of America Merrill Lynch High Net Worth Philanthropy Study 2010. In collaboration with Indiana University Center on Philanthropy. Biennial.

Pdf version is FREE, click here.
The study is a survey of HNWIs to discover their attitudes toward giving and philanthropic behavior, how they make philanthropic decisions within their household, and their thoughts on volunteering and engagement. In addition to the study, there is also a video at the site featuring a panel discussion with two members of the Bank of America team and the director of research from the IU Center on Philanthropy.

Not specifically about HNWIs, but certainly related is:

Giving USA 2011. The Giving USA Foundation / Indiana University Center on Philanthropy

Hard copy; web-based version; powerpoint slides and pdfs; $75

Subscribers can (at the moment) access Volume One: the Numbers. Full publication to be released in July.
Giving USA provides preliminary statistics on giving within the United States. The resource comes as a hard-copy book or web-based version, and includes tons of charts, graphs, and statistics as well as information on historical giving and trends.

Lastly, and maybe most fun:

For an engaging, entertaining, and enlightening article that gives you a glimpse into what it’s really like to be ultra wealthy, read this some Friday afternoon at 3 when you still need to work but just can’t make your brain do anything. From The Atlantic magazine, the article is called “The Rise of the New Global Elite.”

Do you have any other must-read white papers to share?

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