Historically, one-third of all annual donations occur in the month of December. That means it can be the busiest time of the year in philanthropy, for donors, nonprofits, and foundations alike. While soliciting and making donations occupy much of the time and resources for philanthropy, experts suggest they also use this time to reconsider their donations, their donors, and their work.
According to the Giving USA report, 68 percent of donations made in 2018 came from individuals for a total of $292 billion. With individual donors constituting the largest giving group year after year, Pam Owens, a philanthropy consultant with Edge of Your Seat Consulting, says this is the time of year when nonprofits should reach out to donors to thank them, even if they’ve already done so. “Nonprofits should say thank you – yes, again – directly after the holidays because 12 percent of giving happens in the last three days of the year,” she said.
Experts suggest donors take a closer look at how they donate and to which organizations. But their advice differs from what donors are used to hearing when it comes to nonprofit “overhead.” Kelly Nichols, a consultant with Woollard Nichols & Associates, said, “Remember what it really costs to deliver on a nonprofit’s mission.”
“Traditionally, funders and donors to nonprofit causes have insisted that the majority of their donations go to support ‘program’ costs rather than ‘overhead’ costs,” Nichols explained. “This is a huge mistake, and luckily the philanthropic community is beginning to recognize that. Donors should focus on non-profit’s impact and effectiveness, not their overhead.”
Foundations accounted for just 18 percent of donations in 2018, according to the annual Giving USA report, for a total of $76 billion, but at this time of year, foundations analyze their grant-making and rethink how they want to fund programs and nonprofits in the next year. Erica Ekwurzel, founder of consulting firm CivicAIM, works with foundations to help them analyze their giving and make sure their grants and gifts to nonprofits are effective in addressing the issues they want to solve. “A large majority of grant-making organizations are family foundations, some with little to no staff,” said Ekwurzel. “But it doesn’t matter what size the foundation is, they truly want to make a difference. So they’re holding themselves accountable for learning about those issues and making a change in the community.”
Owens suggests that individuals take that same approach when it comes to their giving. She suggest they hone in on those issues they care about most and identify those nonprofits that address them more directly. “For example, our household made the hard decision to no longer support organizations that provide more than a few services,” she said. “We’ve found that those models lead to not really doing programming, or stewardship, or serving the end user in a way that is transformational.”
Ekwurzel said, “I will say that in the 15 years I’ve been in philanthropy, this is not an anomaly. People want to connect their resources to creating positive change. And the only way you can really do that is taking the time to reflect, evaluate, and then recalibrate to see if this is really working.”