Training for the Money Chase: A Brief Primer on Charitable Foundations

By Regenstreif, Donna I. | Generations, Summer 2007 | Go to article overview

Training for the Money Chase: A Brief Primer on Charitable Foundations


Regenstreif, Donna I., Generations


Once donations of time, money, and other resources are the lifeblood of more than a million American nonprofits, it is imperative that professionals in the acid of aging be as expert as possible in tapping into such vital sources of support. This article reviews recent trends and current aspects of giving by charitable foundations in the United States and suggests sources of information to assist those working in the field of aging to gain access to charitable resources more effectively. While individual giving accounted for over three-quarters of estimated giving in 2005 (GivingUSA Foundation, 2006), it must not be overlooked, but is beyond the purview of this article.

RECENT TRENDS IN GIVING AND ACCOUNTABILITY

Giving USA (GivingusA Foundation, 2006), the yearbook of philanthropy, estimates that Americans' charitable contributions for 2005 totaled some $260.28 billion, including an extraordinary outpouring of disaster relief (the tsunami in Asia and Hurricane Katrina). Even discounting the latter, monetary charitable donations increased by nearly $8 billion over 2004, which at $245.2 billion, had set a new record after adjusting for inflation (GivingUSA Foundation, 2006).

Individual giving, the largest component of this figure, rose by 6.5 percent, to $199 billion in 2005, accounting for more than three-quarters of estimated giving that year. Over 70 percent of Americans contribute annually to at least one charity, most extensively to religious entities (about $88 million in 2004) followed by education (about $34 billion in 2004). This figure (not adjusted for inflation) has nearly tripled since 1995, when Americans' donations amounted to $12.3 million (The Foundation Center, 2006). According to Foundation Center estimates reported in The New fork Times on April 3, 2007, giving by foundations soared to more than $40 billion in 2006, breaking the $36.4-billion giving record set in 2005.

Charitable bequests, which accounted for about 6.7 percent of charitable giving in 2005, are thought to have fallen that year, largely because of a decline in deaths. In the past, most major bequests occurred after donors' deaths. When the figures for 2006 are assembled, the extraordinary actions of Warren Buffett, whose gift of $30.7 billion to the Bill and Melinda Gates Foundation doubled the latter's assets (USA Today, 2006), and others similarly situated and inclined, ranging from rock and sports stars to business tycoons to former presidents, signal that some donors wish to see their money at work during their lifetimes, and indeed to actively participate in its use (Silverman and Bernstein, 2006).

Another important trend in the work of foundations and individual donors is an increased desire to see results that go beyond assisting those in need through charitable mechanisms. For some philanthropies (including private, community, and corporate foundations), philanthropists, and United Way organizations, it is no longer sufficient to document that, say, exactly 1,000 additional older adults received benefits to which they were entitled as a result of the advocacy work of an organization, in a situation that will require similar work again and again to meet those recurring needs (Rayes, 2006). Instead, from their "investments" in agencies or organizations, these funders want results that are sustainable-ideally, permanent projects that teach people how to create successful fishing or farming enterprises, rather than provide never-ending donations of food.

"The critical question for the not-for-profit sector is not, as in business, 'How much money do we make?' but 'How can we develop a sustainable resource engine to deliver superior performance relative to our mission?"5 (Collins, 2005).

Those who seek to tap into foundation programs must increasingly document their plans and performance in terms of ultimate outcomes, not only with respect to discrete activities and inputs. Foundations are also feeling pressure to take action to stem societal problems, in an environment where political and governmental consensus on a nation's social obligations (both within and outside of its geographic borders) is increasingly difficult to achieve. …

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