Where do most education and family-focused not-for-profits procure their funding?

December 7, 2016

While a large focus of our recent posts have been about securing grant dollars (which we will continue!), it is important to note that almost 70% of giving does not require any grant process. In fact, 70% of donations come from individual contributors in 2015. This aligns with what we see in the funding sources of non-profits where around 50% or more of non-profit revenue comes from individual donations and philanthropy rather than via grants.

According to a Giving USA article, 2015 was America’s most generous year ever. Here are the stats:

The Numbers for 2015 Charitable Giving by Source:

  • Individual Giving: $264.58 billion, increased 3.8 percent in current dollars (and 3.7 percent when inflation-adjusted) over 2014.
  • Foundation Giving: $58.46 billion, was 6.5 percent higher than 2014 (6.3 percent when inflation-adjusted).
  • Charitable Bequests: $31.76 billion, increased 2.1 percent (1.9 percent when inflation-adjusted) over 2014.
  • Corporate Giving: $18.45 billion, increased 3.9 percent (3.8 percent when inflation-adjusted) over 2014 giving.

For more info, https://givingusa.org/giving-usa-2016/

Where are individual contributions going, exactly?

According to this infographic by Giving USA, 15% of total giving goes to Education and 12% goes toward Human Services. These are the top two giving areas in terms of total charitable donations after religion, which makes up 32%.

What does this mean for non-profit organizations focused on education?

Well, we believe what this means is that Education and Human Services are two areas of funding that resonate with donors. And, given that individual contributors tend to be the most generous, it might be worthwhile to develop a plan to cultivate individual donors. Here are some things to consider as you start to create a plan or process for stewarding new donors:

  • Define what “major gift” means to your organization. The general rule of thumb is that 85 – 90% of your donations will come from 10% of your donors.
  • And to that point, focus on people who have high capacity to give and high interest in your organization’s mission. Major gift cultivation takes time, so be patient.
  • Don’t forget to do your research. You can use Guidestar to look at giving histories and 990’s. Guidestar is still one of the most useful (and free) resources available to nonprofits.
  • Make sure there’s 100% buy-in of staff and Board of Directors before you set out to do any individual fundraising or launch any campaigns. Typically, Board Members are encouraged to donate what’s meaningful to them – and within the top 3 of their financial gifts to charities. Many donors are savvy and may inquire about Board and staff contributions toward organization’s fundraising goals.
  • And finally – and probably most importantly – create a culture of gratitude, so that donors know how their dollars were spent and their impact. Be genuine and thank your donors, so that they will be inspired and motivated to give in the future.