Science of Giving: To the power of one

Stephanie Ali is currently obtaining a Masters of Social Work in Community Empowerment and Policy Development including a Certificate of Non-Profit Management at the University of Georgia. She is also the current FBB Humanist Giving intern.

There are numerous ways a nonprofit can obtain its income. There are the traditional routes of grants from the government or foundations, special fundraising events like marathons or silent auctions, and charging for services delivered. There’s also the growing field of generating income through sales of materials, either directly from the nonprofit or through a joint venture with a private company or a for-profit subsidiary. In-kind donations can sometimes make up a huge portion of an organization’s revenue.

But when it comes to fundraising, there really is nothing that beats the individual donor. Literally nothing.

According to a 2010 Pew Center research poll, 95 percent of Americans give to some kind of charitable institution¹, with nearly 60 percent giving to some institution other than a church or religious institution.

In America, the individual donor is the key to success. Although the recession has driven nonprofit giving down from the high of $336 billion in 2007, Americans still managed to give $298.4 billion in 2011, a 0.9 percent increase over 2010².  A whopping 70 percent of that comes from individuals through donations and fees for service, not from grants or foundations³.

From 2010 to 2011, the largest increase in donations went to international programs, which saw a 4.4 percent increase in private funding. The field with the largest dropoff was religious organizations, which saw a decrease of 4.7 percent in funding. Philanthropy.com has an interactive graph where you can see just what fields have experienced growth and shortfalls over the past six years.

No gift is too small for a nonprofit, but 90 percent of donations come from 10 percent of the givers.³ These individual donors are cultivated over time and have varying reasons for their giving. One study⁴ identifies seven motives for giving, including to help their community, because of their faith, for tax reductions, social engagement, to pass along a benefit they received, to support an organization that matched their personal beliefs, and to maintain a family history of giving.

No matter the reason for giving, an individual can have a huge impact on a nonprofit. Even if a person is just getting to know an organization, a small gift turns into a relationship that, over time, can yield many more interactions that benefit both the donor and the organization.

As government cuts continue to come in all areas, nonprofits need this dedication more and more from their donors. Trends show donors are paying attention, too. While competition for grants become tougher, Americans continue to give through even their own hard times, and that giving has kept more than one organization afloat.

References
¹ Pew Research Center for the People and the Press, http://www.people-press.org/question-search/?qid=1754399&pid=51&ccid=51 (accessed January 16, 2013).
² “Giving USA,” Indiana University Center on Philanthropy.
³ Weinstein, S. The Complete Guide to Fundraising Management. San Francisco: Jossey-Bass, 2002.
⁴ Prince, R.A., File, K.M., and Gillespie, J.E. "Philanthropic Styles." Nonprofit Management and Leadership.  Vol. 3, No. 3, 1993, pp. 255-268.