A Strong Showing

Last year broke giving records, and 2007 looks just as rosy

Rare, an Arlington, Va., charity that promotes conservation efforts around the world, raised about $11-million in November and December, more than double the amount of its annual budget.

The big year-end increases came after the charity pitched an ambitious five-year expansion plan to prospective donors, says Brett Jenks, Rare’s president.

Mr. Jenks and dozens of other nonprofit leaders expect 2007 to be even stronger, in part because of conditions that made the last quarter of 2006 so successful: the robust stock market and the attention philanthropy has received, thanks to high-profile gifts such as the investor Warren Buffett’s pledge of more than $30-billion to the Bill & Melinda Gates Foundation.

“Whether it’s Bono or Bill Gates or Buffett or global warming, there’s a growing awareness of the challenges facing the world and the role of individual donors to do something about it,” Mr. Jenks says.

In a Chronicle spot check of more than 60 nonprofit organizations, many charities said donations grew by more than 10 percent last year, far outstripping the 3.2-percent inflation rate. Among them:

• Donations to Network for Good, a giving portal where donors can make online gifts to any charity in the United States, rose by 37 percent last year. (To get an accurate picture of giving, Network for Good excluded increases that were caused by giving for tsunami or Katrina relief.)

• The Minneapolis Jewish Federation raised $19.7-million, a 23-percent increase over 2005.

• Chicago Public Radio donations grew to $9.5-million last year, a 10.4-percent gain.

Not only are contributions growing fast, but many groups are successfully recruiting new donors. More than 200 of 375 nonprofit organizations in Idaho, Oregon, Montana, and Washington reported that they attracted more donors last year than in 2005, according to a study by the Collins Group, a Seattle fund-raising consulting firm. And contributions grew or held steady for 60 percent of the organizations.

That’s the highest percentage in three years, says Martha S. Richards, the firm’s president. “When you see increased giving and more donors, that’s a really positive sign.”

New Fund-Raising Appeals

Beyond the strong economy, some charities benefited last year from taking new approaches to solicitations, especially online. Others started new fund-raising efforts, such as alliances with businesses, and worked harder to respond to donors’ needs, including stepping back from aggressive solicitations that turn people off.

But some charities are struggling, especially those that operate in parts of the country where the economy is weak, or those that focus on causes that aren’t compelling to large numbers of donors.

The Siena/Francis House, which provides shelter and other services for homeless people in Omaha, Neb., raised $1.3-million last year, about $100,000 less than in 2005. Mike Saklar, the charity’s executive director, says fund raising is always hard because the shelter is a “tough sell” for donors.

“Since we help anybody who needs help, we have the reputation of being a dangerous place,” Mr. Saklar says.

In an attempt to change perceptions, Siena/Francis has started inviting potential donors to visit the facility to demonstrate that it is safe and well run. It has also hired a former client to help it run a Web site that Mr. Saklar hopes will attract more contributions.

At the American Conservatory Theater, in San Francisco, contributions so far this fiscal year, which ends in the summer, are flat, after rising 10 percent in the previous year. Last year’s Congressional election and other concerns distracted donors, says Tim Whalen, the theater’s development director. “The arts are not always seen as the most needful of support. It’s a frustrating thing all of us in the arts live with.”

Giving to many small religious organizations with revenues of less than $10-million annually slowed last year, says Dan Busby, vice president of the Evangelical Council for Financial Accountability, which represents over 1,200 religious organizations. While such organizations saw contributions increase by an average of 8 to 9 percent in 2005, surveys conducted a few months ago found that many expected to do less well this year. However, Mr. Busby says he believes giving will improve in 2007.

Still, other fund raisers who feared a drop in contributions last year — as the outpouring following Hurricane Katrina and other natural disasters dried up — ended up reporting impressive gains.

“What would happen without a major disaster, that was the big question,” says Matthew De Galan, senior vice president for resource development at Mercy Corps, the international relief group.

The charity raised $6.1-million in December, three times the amount it has ever received in that month without a crisis of some kind. Mr. De Galan says that the charity has won repeat gifts from many donors who first started supporting the group after the tsunamis or Hurricane Katrina.

Even charities in the path of the hurricane reported signs of a fund-raising recovery. The Jewish Federation of Greater New Orleans, for example, sent out its first direct-mail solicitation since the hurricane in December, featuring a Hanukkah message. That appeal has so far raised more than $35,000, more than double the total generated by four separate mailings in the spring of 2005, before the storm.

A Market Bonanza

The increased donations reported by some types of charities were the result of a flourishing stock market.

Some community foundations and other organizations that offer donor-advised funds — which allow people to give stock and other assets to create a charitable fund they help manage — raised more last year than they ever have in the past.

Donations to the Fidelity Charitable Gift Fund totaled $1.23-billion last year, an increase of $200-million from 2005. Some 4,700 people created new accounts in 2006, up from 2,640 in 2005.

The Rhode Island Foundation, in Providence, received $30-million, mostly in stock gifts. Donors earmarked about half that sum for donor-advised funds, and the foundation’s total assets are now $500-million.

Charities are also benefiting from a boom in the number of people who want to make contributions to charity in lieu of traditional holiday gifts to friends and relatives.

Donations made in someone else’s name through Network for Good, the online portal, accounted for 40 percent of all contributions in December, up from 20 percent during the same month in 2005.

Floresta, a San Diego Christian group that helps needy people overseas, raised $1.3-million in 2006, in part by participating in charitable Christmas markets at local churches and colleges.

The markets allow shoppers to make charitable donations on behalf of friends and family members, who then receive an acknowledgment that a gift was made in their name. Floresta offered shoppers the opportunity to make gifts to help sponsor a poor farming village, for example, or plant trees in over-harvested regions.

“People seem to be responding very enthusiastically to the idea of giving a donation in a loved one’s name as a unique, meaningful holiday gift,” says Megan VanderGeest, a Floresta spokeswoman.

“This year especially there seemed to be a larger audience of people interested in these alternatives to traditional store-bought gifts.”

At least a dozen charities in the past several years have started offering holiday catalogs that allow donors to make gifts to the needy in someone else’s honor. Oxfam America, the relief organization, created such a catalog last year and netted more than $650,000.

Other groups such as the Planned Parenthood Federation of America updated their Web sites so donors could make online cash donations in the name of a friend or relative. That change helped the family-planning organization raise more than $1-million online in December, compared with $750,000 in 2005.

Big Online Gains

Online donations grew for most other charities last year by healthy margins. Although figures for the Salvation Army’s year-end Red Kettle drive are not yet available, the online version brought in $482,317 — a 256-percent increase from 2005.

Other charities that increased their online offerings also achieved big gains. The Museum of New Mexico Foundation, in Santa Fe, which raises money for four museums and seven state monuments, started a monthly e-mail newsletter, made educational videos available free online, and created three separate online gift shops. Those changes helped it increase contributions from a total of $3.3-million in 2005 to $5.5-million last year. The foundation plans to start a blog this year to draw more potential donors to its site. One of the blog’s first subjects will be travel tips, submitted by readers, for visiting the state’s monuments.

Some charities also benefited as volunteers participated in Internet contests and other online projects to actively raise money for their favorite organizations. For example, Yahoo sponsored an online competition, offering to give up to $50,000 on behalf of the person who raised the most money for charity through its Web site in December.

To enter the contest, competitors selected a charity and created an online button on Yahoo’s Web site that enabled people to make a secure donation using a credit card to that organization. Competitors then persuaded as many people as possible to visit the Yahoo site and give to the charity they selected.

The winner was Beth Kanter, a board member at the Sharing Foundation, in Concord, Mass. Ms. Kanter raised $49,000 for the foundation, which helps feed and educate children in Cambodia, a sum that Yahoo matched. Ms. Kanter called and sent e-mail messages to friends and relatives about the contest, mentioned it on her blog, and even got her husband to bring a laptop to his company’s Christmas party so he could get colleagues to visit the Yahoo site and donate.

Honoring Donors’ Wishes

As people become more engaged in raising money for their favorite causes, fund raisers say donors are also demanding that charities tell them more about how their contributions are used and less about the need for more cash. Increasingly, too, charities are making an effort to comply with donors’ preferences for how, and how often, they are asked for money.

Texas Public Radio, in San Antonio, now sends its first membership renewal notice two months before the membership expires, instead of four months ahead, as it did in the past. Sending the early letters, says the development director, Laverne Pitts, “irritated people, and irritating donors is never a good idea.”

Gifts to the radio station rose nearly 14 percent last year, the first time the station cut back on renewal requests. The number of donors also grew, after years of decline.

The Mark Morris Dance Company, in Brooklyn, which raised $1.7-million last year, is holding back on asking for money from people who have been newly introduced to its work. People who came to performances and other events last August and September, for example, are being invited to other dance-company events, but they won’t be asked for money until at least this spring, says Lauren Cherubine, director of development and marketing.

“We’re not jumping on people who are new to us with solicitations,” she says. “We want to turn them into fans before we turn them into donors.”

Company Support Uneven

While many charities focused on winning contributions from individuals last year, corporate donors played a key role for some groups.

“Our corporate sponsorship was the best it’s ever been,” with 88 national corporate sponsors, compared with 77 the previous year, says Maj. Bill Grein of the Marine Toys for Tots Foundation. Cash contributions rose by 33 percent, to $10-million, he adds. “Toys ‘R’ Us raised over $3-million for us.”

Other donors included Disney, which gave $1-million, and United Parcel Service and Office Depot, which both sold items that raised money for the charity.

At a Los Angeles fund-raising event in November, Girls Incorporated attracted the attention of ABC television network executives. The youth group has since become the official charitable beneficiary of the television program Ugly Betty, a hit series about a plain woman who finds success despite her appearance.

Esther S. Harper, chief development officer for Girls Inc., says she expects support from ABC to bring in hundreds of thousands of dollars more for the organization, through sales of T-shirts and other items promoting Ugly Betty, donated items for auctions by Girls Inc., and cash donations from ABC’s foundation.

But while such deals are helping some nonprofit groups, other charities are worried about declines in corporate support as businesses merge or lay off workers.

The National Center for Missing and Exploited Children, in Alexandria, Va., says that, while giving was up by about 15 percent last year, at least two of its corporate sponsors have recently laid off workers, virtually eliminating their philanthropic departments.

“There’s a lot of tightening of belts in corporate America,” says Susan Culler, the center’s vice president for development. “It’ll be a big challenge this year to get new corporate partners.”

The outlook is grimmer in states like Michigan, where automobile companies and other businesses have laid off hundreds of thousands of employees.

Donations at Lutheran Child and Family Service of Michigan, in Bay City, for example, dropped from $2.1-million in 2005 to $1.8-million last year, even as demand for its child-welfare and other family services increased, says Robert G. Miles, the charity’s president.

“Michigan has had eight consecutive years of job losses,” he says. “You don’t feel generous if you’re thinking, ‘Will my job be there?’”

Tracking IRA Gifts

As they look ahead to this year, many charities hope to increase the amount they receive from individual retirement accounts under a new law that provides a two-year window — last year and this year — in which donors older than 70 may give up to $100,000 annually to charity from their IRA’s.

The National Committee on Planned Giving, which has been tracking the IRA donations, reported last week that at least 1,915 such gifts, worth $37.7-million, have been made.

Many fund raisers, however, have seen scant returns from their efforts to promote IRA gifts. Mary Jane Drews, vice president for development at the Art Institute of Chicago, says that many of the institute’s older donors have already spent money from their IRA or have earmarked it for other uses. The museum sent out a special end-of-year mailing announcing the creation of a new exhibit-and-acquisition fund and alerting donors to the new rules allowing gifts from IRA’s. While the mailing raised $1.2-million for the new fund, very little of it came from retirement accounts.

“Fewer people than we expected had IRA funds available,” Ms. Drews says.

Other charities have had better results: The United Way of Central New Mexico, in Albuquerque, where contributions of all types increased by 12 percent, to roughly $20-million last year, received $500,000 in IRA gifts after holding a workshop about the new law. Of the 15 donors who attended, five made gifts from their retirement accounts, or pledged to make gifts this year. To further spread the word, the United Way plans to host three more workshops this year and send a special mailing to about 3,000 retired people.

Fund-raising experts predict that 2007 will bring in many more IRA gifts as charities reach out to a wider group of donors and people become more familiar with the law. And other signs indicate that the fund-raising climate will remain healthy.

“The economy is strong, the stock market is strong, there’s a long tradition of giving in our country,” says Richard T. Jolly, chairman of Giving USA, which measures philanthropy annually. Barring some unforeseen catastrophe, he adds, “giving will rise in 2007.”

Debra E. Blum contributed to this article.