Donations to Big Groups Rose 13% in 2000

Donations to charitable groups rose 13 percent from 1999 to 2000, according to The Chronicle‘s annual Philanthropy 400.

The Philanthropy 400 survey ranks 400 of the nation’s largest nonprofit organizations by how much money they raise from private sources. The 13-percent increase, before adjusting for inflation, was the same as the one reported for the 1999 fiscal year, but it was down slightly from the 16-percent increase reported for fiscal 1998.

The rate of growth in contributions last year still significantly outpaced inflation, which was 3.4 percent in 2000.

For the ninth year in a row, the Salvation Army ranks No. 1, raising $1.44-billion, up 3.1 percent from $1.4-billion last year.

Longtime national name recognition helps the Salvation Army stay at the top of the Philanthropy 400 list, a charity spokesman said. The charity says that a publicity campaign — which includes an appeal for support during the half-time show of a Dallas Cowboys football game — has given the Salvation Army a way to catch the attention of post-World War II generations that might not otherwise be familiar with its work. The charity is also encouraging families to participate in the national day of service the group organizes to reach out to more children and young adults. Since the campaign began five years ago, holiday giving to the charity has had double-digit increases every year, reaching $362-million last year.

New at No. 2, Fidelity Investment Charitable Gift Fund nearly doubled its contributions, from $573-million to $1.1-billion last year. Fidelity ranked No. 5 last year, and No. 3 in the 1999 survey. The Charitable Gift Fund, a donor-advised fund created in 1992 by the private company Fidelity Investments, is similar to a community foundation. It allows donors to make gifts of cash, stock, and other assets to the fund and receive a tax deduction at the time of the gift, then recommend how their donation should be distributed to other charities.

YMCA of the USA claimed the No. 3 spot, raising $812.1-million, followed by the American Cancer Society (No. 4) with $746.4-million, and Lutheran Services in America (No. 5) with $710.3-million.

At No. 6 is the American Red Cross, which brought in $637.7-million, a 6-percent decrease from its 1999 fiscal year. A $39.1-million drop in giving for disaster relief in 2000 accounted for much of the decline. Giving for disasters was particularly high in 1999, a Red Cross spokeswoman said, in response to Hurricanes Georges and Mitch, as well as to the war in Kosovo.

Not included in the totals is the more than $505-million the Red Cross has raised in recent weeks in response to the September 11 disasters. Those numbers will be reflected in the Red Cross’s totals for its fiscal year that runs from July 1 through June 30, 2002.

Rounding out the top 10: Gifts In Kind International (No. 7), which raised $601.9-million, largely through the value of donated goods; Stanford University (No. 8), which raised $580.5-million; Harvard University (No. 9), which raised $485.2-million; and the Nature Conservancy (No. 10), which raised $445.3-million.

The 400 charities on the Chronicle’s list collectively raised $43.2-billion last year. The top 10 groups on the list raised $7.5-billion, or nearly a fifth of the $43.2-billion.

Giving to the Philanthropy 400 charities accounted for approximately one-fifth of charitable dollars contributed nationwide last year, according to estimates compiled by Giving USA, an annual report on charitable giving published by the American Association of Fundraising Counsel Trust for Philanthropy. Over all, charities saw a 3.2-percent rise in contributions, on average, last year after adjusting for inflation, according to Giving USA.

To be included on this year’s 400 list, organizations needed to raise just over $30.5-million from private sources, including foundations, corporations, and individuals.

‘Giving Account’

Donor-advised funds at Fidelity and elsewhere have fueled much of the growth in giving in recent years.

Fidelity saw a 20-percent increase in the number of individuals who set up accounts with the Charitable Gift Fund last year. About 5,000 new donor-advised funds were created in 2000, bringing the total number to 30,000, says Cynthia Egan, the fund’s president. She credits the rise to the strong economy that year, and also to the growing appeal of this giving method.

“Donors have investment accounts, donors have retirement accounts; now the concept of having a type of giving account is very appealing,” she says.

The 400 list includes three other commercial funds, including the Schwab Fund for Charitable Giving (No. 179), which is new to the list with nearly $75-million in contributions. The Ayco Charitable Foundation, with $64-million in contributions, dropped 17 spots, to No. 212. However, the Vanguard Charitable Endowment Program (No. 106) rose nearly 100 spots, with contributions totaling $111-million compared to $59-million last year.

Savvy marketing helps account for some of the increases at the funds, which have worried community foundation officials across the country, says Harvey P. Dale, director of the National Center on Philanthropy and Law at New York University. Officials at the funds “are reaching out to people who have money and suggesting ways for the people to make charitable gifts,” says Mr. Dale. “Those people are hearing it from Fidelity when they haven’t heard about it, for example, from the Boston Community Foundation or the Cleveland Community Foundation. They [Fidelity] are getting the word out better.”

Major Gifts

Big gifts helped propel Mercersburg Academy (No. 271), a private high school in Mercersburg, Pa., and the Philadelphia Museum of Art onto the 400 list this year. H.F. (Gerry) Lenfest, a graduate of Mercersburg Academy and a cable-television executive, along with his wife, Marguerite Brooks, donated $35-million to the school’s endowment last year, half of which was given in 2000 and the other half in 2001, says Donald D. Hill, assistant head for external affairs.

Four multimillion-dollar gifts totaling $36.5-million put the Philadelphia Museum of Art (No. 293) on the list this year. The gifts came as part of the museum’s capital campaign for $200-million.

Also new to the list: the Susan G. Komen Breast Cancer Foundation (No. 197), which raised $70.5-million; the Christopher Reeve Paralysis Foundation (No. 338, raising $36.7-million); and the Marine Toys for Tots Foundation (No. 289, raising $42.6-million).

Donated Products

The Children’s Hunger Fund, in Mission Hills, Calif., jumped from No. 283 last year to No. 194 this year. The 90-percent rise was helped by gifts of products, including 28 truckloads of long underwear, says Tim Kirk, vice president of operations. “We had a banner year as far as things we were able to procure,” he says. The international-relief group has increased the number of corporations that donate goods by reporting how the donations were used and making sure goods are picked up promptly. “If we give back reporting and impress this organization that has given to us once, we tend to get them to give again,” says Mr. Kirk.

One group that dropped off the list this year was the Children’s Scholarship Fund, in New York, which was ranked No. 50 last year. The group, which awards private-school scholarships to poor children, raised $23.5-million last year, compared to $160-million the year before. Elizabeth Toomey, associate program director, said the reason for the drop was that donors pledged $160-million to create the organization in 1998 but the money is being paid out over a four-year period, so those funds are still being received by the organization. About $100-million of the initial $160-million was donated by the fund’s founders, Ted Forstmann, of Forstmann Little & Company, a private investment company, and John Walton, the founder of Wal-Mart Stores.

End of a Boom

Bruce Flessner, a partner in Bentz Whaley Flessner, a fund-raising consulting company in Minneapolis, says the 13-percent increase in donations to the large organizations surveyed for the Philanthropy 400 reflected the “end of a big boom market,” in which big national charities were especially successful in capturing a large proportion of charitable giving nationally. “They are more sophisticated than they have ever been,” in fund-raising techniques, he says.

Looking ahead, he predicted that charities are likely to see drops in major gifts as fewer big donors find themselves with unexpected income at the end of the year as they did in the past. But he predicted that charities are less likely, at least for now, to see decreases from smaller contributors as unemployment and income levels nationwide have remained relatively stable. Such a dropoff might occur next year, however, he says, if unemployment rises.

Given the economy and the aftershocks of the terrorism attacks, Mr. Flessner says the nonprofit organizations he advises “tend to fall in two groups, those who believe the world has collapsed and that fund raising is going to disappear, and those who believe nothing has changed, and that people give in good times and bad times.

“The truth,” he says, “is somewhere in between: It is going to impact fund raising, but it is not going to be the end of philanthropy.”