Philanthropy 400 Reflects Generational Shift in American Giving

The Shriners Hospitals for Children raised $342-million in 2009, nearly twice as much as in 1991, the first year The Chronicle published the Philanthropy 400, its annual ranking of charities that receive the most private support.

But the Tampa, Fla., charity still plummeted in the Philanthropy 400, from 15th in 1991 to 40th this year, as organizations like AmeriCares Foundation, which primarily receive product donations surged into the top 20. The Stamford, Conn., charity ranks No. 4 this year.

Charities needed a strong fund-raising operation—capable of increasing donations at a rate far greater than inflation—merely to hold their own over the past two decades on the Philanthropy 400.

Throughout that period, charities had to negotiate an increasingly challenging landscape, as the number of nonprofit organizations and fund raisers rose sharply, and the skill with which they pursued donations grew in tandem. Charities became increasingly sophisticated at appearing to prospective donors through the mail, and in the past decade, innovations in online fund raising evolved rapidly. The growth of academic programs in fund raising and nonprofit management has added highly skilled new hires to a profession that once depended on mentoring and on-the-job training.

“The whole profession of fund raising has seen huge changes,” says Paulette V. Maehara, president of the Association of Fundraising Professionals. “Twenty years ago, we were not the type of profession we are today.”

Experts see at least as much change over the next two decades. Charities that leap ahead will likely be those that attract and retain talented fund raisers when the economy rebounds, adapt to the endless changes in online fund raising, and figure out how to secure major gifts from baby boomers as they move out of the work force and begin to focus on philanthropy.

Newcomers Growing Fast

The 226 charities that made the Philanthropy 400 in both 1991 and 2010 increased their fund raising by a median of 229 percent over that period. Even after adjusting for inflation, those charities raised a median of 81 percent more in 2009 than in 1990. (That’s roughly in line with the 84-percent inflation-adjusted increase in American philanthropy over that period, as measured by Giving USA.)

And the newcomers to the Philanthropy 400 over the past two decades are growing even faster than the veterans. The total amount of money raised by all members of the Philanthropy 400, totaled $68.6-billion, 156 percent more than the organizations on the 1991 list raised, adjusting for inflation.

Well-known charities like the Boys & Girls Clubs of America, Catholic Charities USA, the Salvation Army, and the Y (formerly YMCA) essentially maintained their positions in the list’s top 20. Each group at least tripled the amount it raised over the 20-year period.

Social Networking

But other long-existing charities, including Shriners, March of Dimes Foundation, Muscular Dystrophy Association, Easter Seals, Boys Scouts of America, and Girl Scouts of the USA fell in the Philanthropy 400 rankings. Although each of those groups raised more money in 2010 than in 1991, none of them doubled their fundraising during the period.

“The organizations that relied primarily on the G.I. generation and have not repositioned themselves with the baby boomers and the younger generations have seen some slippage, and that’s inevitable,” says Robert F. Sharpe Jr., a fund-raising consultant in Memphis.

Even some venerable groups that have stayed competitive in fund raising worry about their high proportions of older donors. Take the case of the Salvation Army, which stands at No. 2 in this year’s Philanthropy 400 (despite a recession-fueled drop of more than 8 percent in private donations in 2009). The group’s average direct-mail donor is about age 60, which presents a challenge for the charity, says Maj. George Hood, the Alexandria, Va., group’s national community relations and development secretary.

“The generation that fell in love with us for what we did for their fathers and brothers in the war are disappearing,” he says.

But some traditions abide: The charity’s iconic red kettles scooped up $139-million in 2009, besting 2008’s record of $130-million. Still, the group is putting more focus on online giving.

“We’ve gone deeply into social networking, planting seeds for the future,” says Major Hood.

Charities that raised less money in 2009 than 1990 generally fell off the Philanthropy 400. Mothers Against Drunk Driving, in Irving, Tex., raised more than $46-million in 1990, earning it the No. 109 spot in the first Philanthropy 400, but private support for the charity fell to under $25-million in 2009, not enough to make this year’s list. A long-term decline in alcohol-related traffic deaths “has made the job of keeping the problems of drunk driving and underage drinking top of mind for the general public a challenging one,” says Kimberly Earle, who became MADD’s chief executive in June. Ms. Earle says she is working on a strategy to re-engage existing donors and attract new ones.

Jewish organizations generally dropped in the rankings over the period; two Jewish groups were in the top 10 in 1991, but in 2010, the highest ranking organization was New York’s Jewish Federations of North America, at No. 45.

Donations to both United Jewish Appeal-Federation of Jewish Philanthropies of New York (No. 117 on the current rankings) and the Jewish Federation of Greater Los Angeles (No. 365) declined over 20 years.

Two main factors led to the slide, according to executives at the organizations. In the early 1990s, giving to many Jewish organizations increased to help cover the costs of resettling Jews from the former Soviet Union in the United States or Israel. Gifts have also stagnated in recent years as a younger generation of Jews, without first-hand memories of the Holocaust or the creation of Israel, supports a broader range of charities.

Jay Sanderson, who became president of the Los Angeles federation in the past year, says his group is looking to spark giving by allowing donors to have a greater say in where their money goes, and by narrowing its focus to issues that donors care about most, such as subsidies for Jewish camps and other steps that make it more affordable to participate in Jewish life. Mr. Sanderson recently asked a donor for $50-million—which would be the organization’s biggest gift ever—and he says he is confident the donor will come through with most if not all of the money.

“Even in this bad economy,” Mr. Sanderson says, “donors are responding.”

Meanwhile, some organizations that raise money to fight diseases that are affecting greater numbers of people chalked up big increases during the past 20 years.

For example, Susan G. Komen for the Cure, in Dallas, founded in 1982, didn’t even make the 1991 list, but the breast-cancer charity sits at No. 60 this year. And the Alzheimer’s Association, in Chicago, raised $179.8-million last year, 610 percent more than in 1990, putting it at No. 101 on the latest list.

The Alzheimer’s Association’s Memory Walk has grown from $4-million in 1994, its first year as a national event, to $41-million in 2009, but the charity thinks the event can do even better. In fall 2011, the charity will rename it “The Walk to End Alzheimer’s,” after marketing research found that the previous name did not appeal to participants or donors.

“People didn’t quite make the connection between the Memory Walk and the fight against Alzheimer’s,” says Angela Geiger, the association’s chief strategy officer.

Like many other charities, the Alzheimer’s Association is seeing sharp increases in the number of supporters who give money online. The organization has 62,000 followers on Facebook, and in 2009, 6.7 percent of its gifts came via the Web.

Nick Allen, a fund-raising consultant at Donordigital, in Berkeley, Calif., says online fund raising now makes up 10 to 20 percent of annual giving at some charities. Online giving was nonexistent when the Philanthropy 400 started, but it will become even more common in the next two decades, he says.

A survey conducted by The Chronicle in April found that 151 large charities received online donations totaling $721-million in 2009, with five charities receiving online gifts worth $25-million or more. “The important stuff in your life doesn’t come in the mail anymore,” Mr. Allen says. “Younger donors just don’t give in response to mail.”

Focusing on Values

As charities compete for donations, some are finding success by narrowing their focus to potential donors whose values overlap with the organization’s mission.

The American Society for the Prevention of Cruelty to Animals (No. 195), in New York, uses television ads to reach the dog and cat owners who are passionate about the charity’s cause. Prospective donors who responded to TV ads were asked to consider donating to the charity once a month on a regular schedule, says Ed Sayres, its president.

The group now has 150,000 donors who give monthly, and their giving accounts for about 60 percent of the charity’s annual gifts, Mr. Sayres says.

The charity raised just $5-million in 1990 and didn’t make the first Philanthropy 400. But in 2009, the nonprofit raised more than $101-million, a 1,920-percent increase over two decades, and enough to put the charity on the list at No. 195.

The increasing popularity of donor-advised funds—which allow people to donate assets to special accounts, claim a tax deduction, and then later decide which charities should receive their gifts—is also reshaping the upper reaches of the Philanthropy 400.

Twenty years ago, commercial providers of such funds didn’t even exist. This year, the Fidelity Charitable Gift Fund ranked No. 7 on the list, and the Vanguard Charitable Endowment Program ranked No. 19.

The competition in the Philanthropy 400 is so stiff that some groups that continue to do quite well—such as colleges and universities—are nonetheless falling further down the list.

Colleges and universities raised $27.9-billion in 2009, 184 percent more than in 1990, says Ann E. Kaplan, who directs the Voluntary Support of Education Survey for the Council for Aid to Education. The growth came during a period when critics increasingly accused wealthy private institutions of warehousing donations in their multi-billion-dollar endowments.

Ms. Kaplan says the criticism “hasn’t been hurting” colleges much. “Colleges have been at this for so long, they have become very stable recipients of charitable gifts,” she says.

In 1991, five universities—Cornell, Harvard, Stanford, and Yale, and the University of Pennsylvania—were in the top 20. But in 2010, just Stanford (No. 14) and Harvard (No. 16) made the top 20.

Even as charities increase their fund raising, some critics wonder if they now depend too heavily on private giving—and a finding by The Chronicle may add fuel to that argument. In 1991, 68 percent of the total income at charities in the Philanthropy 400 came from donations. In 2010, 76 percent of total income came from gifts.

Noelle Barton, Marisa López-Rivera, Alex Richards, Chris Thompson, and Maureen West contributed to this article.