For more information visit AtlasOfGiving.com

There will never be a current, centralized database that contains all charitable contributions made to 964,000 publically supported nonprofits and churches.  This is an issue that is not unique to charitable giving.  Other financial and economic measurements like retail sales, manufacturing inventories, and unemployment face the same challenge.

Established macroeconomic measurements have developed formulas (algorithms) to establish a benchmark.  The benchmark is then used to measure changes, establish trends, and create forecasts. Consistency and fidelity of the benchmark is vital.  The Atlas of Giving uses this proven methodology for measuring and forecasting giving.

Atlas of Giving formulas were built upon the fact that charitable giving is directly tied to specific individual economic and demographic factors. A team of 25 PhD level mathematicians, analysts and statisticians evaluated more than 70 possible variables and their interactions with charitable giving outcomes over four decades. They not only proved that charitable giving is directly tied to economic and demographic factors; they determined exactly what they are. The research team used the relevant identified factors to create an algorithm that when compared with published annual giving data dating back to 1968 correlates 99.5%.

The Atlas has built the capability to measure, analyze and forecast total US charitable giving economy by sector (religion, health, arts, etc), by source (individual, foundation, corporation, and bequest), and by state each month.

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Well, maybe not.  But, you will feel like you are better looking.

As a fund raising practitioner or nonprofit manager, you are always trying to find new ways to raise more money and spend less money doing it.  There is a powerful free tool that gives you the benchmarks and forecasts you need to identify and expand productive promotions (like online giving) more quickly and reallocate dollars from declining promotions (like a special event past its prime). These improvements will favorably impact your cost per dollar raised.  This will make your organization (and you) more attractive to donors, prospective donors, and watchdog organizations like Guidestar and the BBB Wise Giving Alliance…

The Atlas of Giving reports that US giving is up 7.7% in 2011 through October. This benchmark gives you a good idea about how your results compare to 2011 aggregate results for the US.  The Atlas forecast shows that unfortunately, giving will be flat for the 12 months ahead – with some months being dramatically lower than the previous year.  April, 2012 is forecast to be down 5.5% from April, 2011.  But, September, 2012 is currently projected to be 5.9% better than September, 2011.  Pay attention to the monthly forecast, so that you can schedule mailings, events and other activities for times when they will have an optimal chance for producing successful returns.

Use Atlas of Giving forecast and benchmarking information to improve your credibility with your CEO, the CFO, the Board of Directors, and your staff. Use Atlas data to schedule promotions and adjust budgeting and staffing to prepare for upcoming conditions so that you can raise more money at less cost. Also use the information to sound the alarm to warn against making significant expenditures based on unfavorable giving forecasts – like the first 7 months of 2012.  

The current Atlas Insight and Analysis section points out that political fundraising is affecting charitable giving. Individuals and companies are redirecting contributions that would normally go to charity to political campaigns instead.  This phenomenon will increase as the campaign season heats up. Keep this in mind as you make plans for 2012.  You can subscribe at no cost to The Atlas of Giving Standard Edition at www.philanthromax.com.

If this sounds good, it can be even better… much more giving information is available.  Charitable giving benchmarks and forecasts for 8 sectors (Arts, Education, Health, etc), 4 sources (Individual, Corporation, Foundation, and Bequest), and for all 50 states is available every month with the Atlas of Giving Professional Edition (Atlas Pro).  Check it out atwww.atlasofgiving.com.

Keep your finger on the pulse of American philanthropy.

When it comes to charitable giving results, most of us have been conditioned to think that doing better this year as compared with last year is a reasonable expectation.  Not anymore.

Now, every month you can compare your results to the performance of your sector (education, religion, health, etc) and your state (or states) and by donor source (individual, corporation, foundation, and bequests).  The information shows last month, last 3 months, last 12 months and the current calendar year.  And, even more importantly, you can now see a current forecast of what giving will be in next month, next 3 months, and next 12 months… by sector, by donor source and by state.

Now - you can know if you are gaining or losing market share. 

Now - you can build an efficient budget based on a reliable charitable giving forecast.

Now - you have the information you need to plan fundraising campaigns and promotions for maximum impact.

Now - you can evaluate staff performance, campaign performance, and unit performance to a solid measurement tool.

Now - you can measure the impact of specific events or policy changes on your results.

Maybe - you don’t want to know… but soon your board and your boss will AND they will have access to this information. 

In June of 2001, I was tapped to head fundraising at the American Cancer Society.  Our fiscal year started on September 1.  Then horrific day that we will never forget changed everything.  The CEO called.  “What do you think this means for our giving income?”  My response was anemic, “I don’t know John, but it can’t be good.  My biggest concern is how long the effects will last.”

A year later, while reporting our giving results to the National Board of Directors, I declared that we had a good year.  We believed that ACS was one of the few non-disaster related charities to finish the year with a giving increase… a very, very small increase.  “How do you know?” shot back one of the Board members.  “We’ve talked with some other organizations” I replied.  “Isn’t there a benchmark for national charitable giving?”  “Well yes, but numbers for 2002 won’t be released until June of 2003.”  …having to give this answer really bothered me.

Then the board member made a suggestion, “My guess is that our charitable giving is directly tied with certain economic and demographic factors that are regularly reported.  If you can find out what they are, you should be able to create a benchmark that can be used quarterly or even monthly.  You will also have what you need to forecast. This kind of modeling is used by hedge funds to generate big returns.”

Last year, we cracked the code.  We engaged a team of 25 PhD researchers to test almost 70 possible variables against 42 years of published US giving results.  The result was amazing.

We were able to create an algorithm (formula) with a handful of the input variables that matched 42 years of published charitable giving results with a correlation of 99.5%.

Because the input variables are reported monthly, we are able to measure charitable giving monthly.  And, more importantly, we are able to forecast charitable giving for the next 12 months.  So we created the Atlas of Giving.

This year we created the models for measuring and forecasting by sectors, by donor sources, and by state.  We have used this to create the Atlas of Giving Professional Edition – the ultimate economic intelligence tool for charitable giving.  

Atlas Pro will forever change nonprofit management - for the better.

See Atlas Pro at https://atlasofgiving.com/

The myth is this – if we target our regular appeals at a wealthier audience, we will raise more money.  Just one problem… it doesn’t work that way.

Recently I delivered the results of a Donor Engagement Profile to a large national charity.  We examined almost 200 million interactions of more than 3 million donors and almost 8 million gifts.  The client charity was shocked to learn that the wealth of the donor and the wealth of a particular geography had absolutely no relationship to gift size or lifetime donor value.  We see this repeatedly in our Donor Engagement Profiles. 

A few years ago, when I was with the American Cancer Society, an interesting thing happened.  We had an annual direct mail donor in the Chicago area.  He stroked a check for $100 every time he received the year-end appeal letter.  This pattern had been well established for half a dozen years.  Then, for no apparent reason, he sent a check for $1,000.  Fortunately, a staff member in Chicago noticed the change and called the donor.

Turns out this gentleman is a billionaire… and an established philanthropist who has given more than $100 million to a variety of causes.  He gave those $100 checks because he had friends who had been affected by cancer and because $100 was the amount requested by the letter.  But, when his wife was diagnosed with breast cancer, this issue became intimately personal for him.  Since being personally cultivated  and involved,  he has given millions to the Society.

The donor lives in one of the wealthiest zip code areas of Chicago and had the ability to write checks for millions but was consistently sending $100.  His wealth had no relationship to his level of contribution – until the issue became personal for him.

I, like many of you, have spent lots of money and time during my years as a practioner to assign wealth codes to donors on file assuming (wrongly) that people with more money will give more money.  Interestingly, I don’t ever remember testing later to validate the results.  Now I know that I would have been embarrassed to have spent all that money only to find out that the hypothesis is incorrect.

To get a certain payback on your donor data, examine how donors engage with the organization and how they behave after they give their first gift.

The best investment you can make is in a well worded, well understood, concise mission message.  This is the foundation on which all successful fundraising appeals are based.  The next best investment is in a highly personalized gift acknowledgement that is sent within 48 hours of receiving the gift and followed with a thank you call or personal note from a staff member or volunteer.  Make the donor feel valued and recognized and your retention rates will increase immediately.

Other data provides the information needed to raise more money.  Focusing attention on donors who have a history of making multiple gifts within a short period of time is extremely productive.  Increasing the amount of the ask for repeat donors pays solid dividends.  Making an investment in getting donors to give through multiple channels increases gift size, gift frequency and lifetime value.  Converting a donor into a volunteer is also a winning tactic.  Trying to convert a volunteer into a donor doesn’t usually work well.

Wealth codes do have an appropriate function.  If you are using wealth codes as the basis for face to face appeals for mid-level gifts, major and campaign gifts, and planned gifts… the coding is vital in prioritizing targets for staff and volunteers.  Otherwise, spend the money you would have spent on wealth coding on retaining and upgrading your current donors through better mission messaging, better gift acknowledgement, and multi-channel donor involvement strategies.

For more than 20 years I had my auto and homeowners insurance with the same agent – Greg.  I don’t remember how I started with Greg except that we went to school together and at one time attended the same church. 

In all those years, I never shopped.  I was loyal… and probably lazy.  It just seemed easier to renew.  

Two years ago, while doing the household budget I realized that I was insuring a nice house, 5 cars, and 5 drivers including 3 teenagers.  The annual total for this coverage was close to the Gross Domestic Product of Belize I think. 

Then it hit me – in more than 20 years, the only times I ever heard from Greg was when he wanted to ‘up sell’ me on something.  He never took me to lunch, sent tickets for an event or show, sent a handwritten thank you note, or just called to catch up.  Greg did not care about me.  My loyalty was ridiculously misplaced.  For years I had been paying more than I should and giving my business to someone who really didn’t appreciate it. 

Of course I shopped and got a much better deal and called Greg’s office to cancel.  I was stunned when he didn’t call me back to try to talk me out of it or find out why – proof positive that I made the right decision.  

It is 5 to 12 times less expensive to retain a donor you have than to acquire a new one. 

Many people in fundraising have never even considered measuring their donor retention rate.  Oh sure they may know about retention in the direct mail file but they are clueless about event donors, major gifts donors, and online contributors. 

How much of your annual budget is devoted to donor retention and renewal activities as opposed to acquisition activity?  What does your donor appreciation program look like?  How many of your loyal donors do you and your staff really know?  What is the lifetime value of your median donor?   What strategy have you developed to keep and upgrade the donors you’ve acquired?  Do you care? 

Do yourself a favor… Don’t be Greg.

People who work for and volunteer for nonprofits are nice people… many of them should be fired.

I spent 28 years of my life working alongside these well-meaning folks in a variety of charitable organizations as both an employee and a board member.  But, I have a bone to pick.  Solid business practice and accountability is almost universally resisted in charities and churches.  It’s a lot like government in that way.  These people and organizations would rather defend themselves than really solving anything.

Hard work and zealous devotion to the mission do not excuse anyone or any organization or church from effectiveness or efficiency.  Results matter. 

Oh sure, I’ve heard the arguments that charities are not businesses and deserve to be dealt with differently.  And, I agree – on a few points, but not many.

Every charity and church owes it to its supporters and the taxpayers prove that it produces measurable results that benefit our society.  Similarly, every nonprofit employee should be expected to be held accountable for the job that they are paid to accomplish and every board member should demand that this occurs.  Can your charity or church prove a significant return on its investment?  Can you justify your salary and benefits based on your measurable impact on the mission?

I am in favor of a donor and taxpayer revolution.  Somebody, please start an effective movement that demands that charities, churches, and the people that work for them and volunteer for them produce real, measurable results. I’ve devised a suggested plan to start this process… it’s not perfect but it’s a start - see what you think http://www.philanthromax.com/blogs/rob-mitchell?page=3

We can learn a lot from business and we should.   Measurement and accountability is good and appropriate – embrace it and you and your organization will thrive.  Yes, ineffective programs and people will be eliminated… they should...sorry.  Nice people should sometimes be fired and replaced with people who are committed to accomplishment not tradition and hard work.  And, ineffective old organizations should fail.  Results matter!

Nonprofits are very different… in how they raise money and where they get it.  And yet, there is a persistent effort to compare to national or sector averages.  For example, the American Cancer Society and Mayo Clinic are both considered health charities.  But they are very different in how they raise money and where their gifts come from.

One is funded primarily from millions of small gifts that come from millions of individual donors who give through special events, direct mail, and online giving.  That organization also gets a significant percentage of its revenue from bequests.  It gets a larger than average share of its gifts from corporations but almost nothing from foundation grants and major gifts from individuals.

The other has a nice base of annual support but really benefits from major gifts, foundation grants, and bequests.  Its average individual donor has a very different profile from the average contributor in the other organization.

This difference is vitally important in understanding why some nonprofits are thriving in 2011 and others are struggling. 

Unemployment is, and has been high.  High unemployment dramatically constricts the flow of small gifts from working class and middle class individuals.  People who are unemployed, underemployed, or fear becoming unemployed generally curtail or suspend their giving, while some cease giving entirely.  This has a profoundly negative impact on an organization that relies on small transactional gifts. 

Consumer Confidence is also important to individuals who make small gifts through events, direct mail, and electronic giving.  These individuals make contributions out of their discretionary income.  High prices on necessities like gas and food take a bite out of their budgets and damper their confidence making spending decisions on things they want but don’t necessarily need – this includes their desire to make charitable gifts.

The stock market is having a good run.  Corporate earnings are soaring.  The effect on net worth for wealthy individuals, grant making foundations, estates, donor advised funds and corporations is very significant.  These donors and funds feel flush with value and are making game-changing contributions to charities, churches, donor advised funds, and private foundations.  They are not affected much by high unemployment and consumer confidence.

A growing economy is also good for bigger gifts.  And, believe it or not, the US economy is growing.  It is a very slow growth but the recession is over and has been over for months.  Fragile? Yes of course, but it is growing.

So, the lesson here is that nonprofit fundraising is a function of the donor mix and fundraising portfolio of a charity and the components of the economy that affect the donor types and fundraising techniques employed by the nonprofit.

If you are fortunate enough to be in an organization that is weighted heavily toward major gifts, grants, corporate support and bequests you are enjoying wonderful growth in giving in 2011.  Make hay while the sun shines.  Take advantage of the current environment.  Step up your solicitation efforts. Ask, ask, ask!

If however, your nonprofit is focused on grassroots support from lots of small individual contributions, you are not feeling too flush.  Now might be a good time for you to invest in diversification of your fundraising portfolio so that you can begin to share in the largesse of major gifts, corporate support, foundation grants, and bequests.

But, don’t forget to keep your finger on the pulse of American philanthropy at www.atlasofgiving.com.  Conditions can and do change – sometimes quickly.

And so it begins… the annual summer discussion about what giving did last year – 2010 in this case.  Whose number is more accurate?  Is any number accurate?  Is it too high or too low?  How did we do in comparison?

Honestly, why waste your time?  If you have to wait six months to find out what the giving environment was for last year - you really don’t have enough to do.  And, you are looking in the wrong direction.

Until now, charitable giving has been the only $300 billion dollar a year industry trying to drive forward while using only the rearview mirror. 

At the Atlas of Giving we are all about looking ahead.  Yes we measure, but we measure monthly so that we can note how giving is trending.  More importantly, we are providing a reliable predictive forecast for the months ahead and are analyzing the impact of current events on giving.  The name of this game is ‘utility’.  How can you use data and information to raise more money and create better budgets?  I’m pretty sure that Mattel isn’t focused on how accurate the retail sales numbers were for December of 2010 – their profitability depends on what the forecast is for this coming December.

So, as you watch the annual spectacle of the June release of Giving USA numbers and the frenzy of speculation related to accuracy, you’d be smart to ask yourself – Why is this important?

Until September 8, 1900, the National Weather Bureau mostly measured weather.  Everything changed on that fateful day when as many as 12,000 were killed in Galveston, Texas in a strong hurricane (the biggest loss of life in a natural disaster in US history).  As a result, the National Weather Bureau changed its focus from measuring to forecasting for the obvious reason that reliable forecasting would save lives... and it certainly has.  It’s time for our sector to stop its infatuation with the past and focus on a brighter future.

Greater accuracy has little utility - especially if it is more than 6 months old.  A reliable forecast and an ongoing monitoring of events and conditions that are currently affecting giving are the tools of that will bring real advancement and better results.

The Atlas of Giving is focused on the future but will continue to accurately measure the past and learn from it.

“The future belongs to those who prepare for it.” – Ralph Waldo Emerson

Keep your finger on the pulse of American Philanthropy

www.AtlasofGiving.com

If you knew that your gala would net 6% more if you moved it from November to July, would you do it?

If you had reliable data that suggested that your traditional December direct mail drop could bring $150,000 more if you moved it up to September, what would you do?

Would your budget plans change if you knew that charitable giving will not grow in the next 12 months but will decline 1.6%?

Have you ever considered questions like this?  Probably not…  Because, until recently, there were no answers to these questions based in analysis and data.  The best you could do was wait until June to look at how giving performed in the last calendar year, stick a wet finger in the air and speculate on what lies ahead.  That has all changed with the introduction of the Atlas of Giving.

The Atlas of Giving is an innovation that forever changes how fundraising and nonprofit budgets can be managed.  The Atlas is provides 3 things that have never before been available…

1. Measurement of charitable giving results MONTHLY.


2. A reliable forecast for charitable giving


3. Analysis of the factors and current events that affect charitable giving.

This means that you no longer have to wait until June to find out how charitable giving performed last calendar year.  - In case you are wondering, 2010 giving totaled $323.86 billion, up 6.6% over 2009.  This rebound follows the biggest single year decline in giving in 2009 (down 5.7%).  The Atlas of Giving released this result on January 19, 2011.  Oh, and by the way, giving through the end of April, 2011 is up 8.3%. Results through the end of May will be available with the new monthly report which will be posted June 20.

As a nonprofit professional, you now have access to information that gives you options for scheduling appeals and events during times that are forecast to be more favorable than others.  It’s a lot like scheduling your camping trip when no rain is in the forecast.

If you are wondering what the impact of an event like the BP Oil Spill will have on giving – now you can know.

Here is the best news… The Atlas of Giving is free!  All you need to do is go to www.atlasofgiving.com , get a free subscription to view the Atlas of Giving each month.

If you really want an edge, you can get a customized version of the Atlas for your organization.