441. The Philanthropic Landscape: Exploring Challenges and Opportunities in Giving Today - Elizabeth Abel

5:39AM Jun 26, 2023

Speakers:

Julie Confer

Jonathan McCoy

Elizabeth Abel

Becky Endicott

Keywords:

giving

foundations

philanthropy

donors

talk

fundraising

individuals

elizabeth

philanthropic

people

communities

organizations

gifts

building

nonprofits

data

love

report

mega

declined

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we have a three peat and like one of our favorite people ever. We keep pulling her back in.

Oh my gosh, it is so fun to have Elizabeth Abell back in the weir for good podcast house because it's that time of year friends. We're here on the heels of the 2023 giving us a report looking at last year's numbers on philanthropic giving. I don't know about y'all. But I mean, some of the headlines kind of put you in a negative headspace, you know, individual giving his down foundation giving his up all it's kind of complex understandings of what's happening. And so we're like, we have a phone a friend option, we get to call our Elizabeth, the Senior Vice President of CCS fundraising, and she loves this stuff. Not only does she love it, but she is this thought leader in philanthropy. She's an expert in fundraising. She's led capital campaigns and development initiatives that have collectively raised nearly a billion dollars for all sorts of different backgrounds of organizations. But here's the thing, Elizabeth also teaches, I mean, she not only does that if you follow her on social media, which go do this because you will be a smarter professional as a result of it. But she's also an instructor at the University of Pennsylvania, where she teaches a fundraising course to grad students in the nonprofit leadership program. She lives in New York City with her incredible husband. And now we can officially say to girls, she is rocking baby li ora and chasing some Mara around her house. She's an avid traveler, glacial lake hiker tea drinker. And here we are. So good to see you again, my friend. Welcome back to the podcast.

So good to see you both. Thank you for having me on. Again, so excited for this conversation?

Well, I mean, my friend, you're not new to this house. But you may be new to some of the people listening today. So we just want to introduce you again to the community, give us a little bit of your background, and what really excites you about the space with some of the work that you're plugging into now that really, you'd like to lift.

So I've been working in philanthropy for a decade. And the reason why I love it so much is because I value the opportunity to leverage fundraising to support mission driven organizations and their teams, it brings me a lot of energy to know that the work that I'm doing has a measurable impact on nonprofit organizations, and more importantly, to communities that they serve.

You live that all the dang time, my friend, like if you spend any time following Elizabeth, like she lives and breathes this, because it is just hardwired within her. I mean, I'm even looking behind me, I got a book that you sent me from Lydia fund that which is such a great book. And the way that you pour into the sector, the way that you pour into people is just so admirable. And I, I really look forward to this time every year. And we want to dive into this giving us a report. But before we do, I just want to set a little tone here. Because I think to John's point, if you look at this data, you're going to feel a little bit like the the weight of the world is on you. But I want to give everybody a little bit of context here to think about as we're going through this conversation, which is this data is reporting on one thing, and the only thing that it is reporting on is philanthropic giving dollars, we are only looking at dollars. And so keep in mind, we're looking at the tip of the iceberg. And we're gonna dive in at the very end of this episode to what is underneath the iceberg that has not been tapped in this data because I do think that there's tremendous potential and opportunity here but we do have to know where the numbers are. And that is why we turn to you my friend because you have had this access to this data for a little bit. So like dive in for So just a little bit, hit the high levels, and talk about kind of those insights into the current philanthropic landscape and what the data was saying from 2022.

All right, so the big headline is that following record setting, giving in 2020, and 2021, which actually peaked at $516 billion, giving declined in 2022 to 499.3 3 billion. Now, this is still a very significant figure. It's nearly $500 billion invested in the philanthropic marketplace, and it reflects the continued generosity and resilience of the American people. However, 2022 was a year that was influenced by key economic challenges, like the decline in the stock market and continued economic uncertainty.

I mean, I'm glad you're bringing up the economic challenges that are happening, because I mean, I feel this in our own family's budget. I know people listening today, you feel this, too. But I mean, there's, you know, huge inflation happening around us, what are some of the other factors that you think are playing and pouring into some of the impacts just at a high level across the US.

So we know that giving is closely linked with economic factors, especially the stock market, and there's really three key challenges that influenced giving in 2022 that are worth emphasizing. So the first, of course, is the decline in the stock market, the s&p 500 declined about 25%, when adjusted for inflation. Similarly, John, you just mentioned this disposable personal income declined about seven and a half percent also, when adjusted for inflation. And speaking of the big word inflation, inflation reached an all time high last year of 8%, the highest inflation rate in nearly 40 years. And this had a sizeable impact on charitable giving.

I mean, there's just so many variables, thank you for just hitting it. And I think to John's point, everybody's feeling this, but we look at these negative headlines. And you know, we're just not going to stand for it to be completely negative here, because it's still $500 billion. So talk to us about the significance of the implications of this year's data, and talk about just like how you're seeing generosity evolve and change.

So there's two key themes that I think are worth emphasizing. The first is around the role that individuals play in driving philanthropy. And then the second is around the role that foundations are playing and the expanded footprint that foundations now have in American philanthropy. So in terms of individuals, we know that individuals drive the lion's share of philanthropy this year, they comprised about 64%, of total charitable giving. Now, when we think about this, it's really extraordinary, we look at requests, which are about 9%, which we know are made by individuals, and then we take that 21% of foundation giving and think about, you know, a portion of that our family Foundation's, then into individuals are really driving between 75 to 85%, of charitable giving. So it's important to emphasize the role that nonprofit leaders and development professionals need to play and building meaningful relationships with their donors, particularly their major donors. And now we're seeing mega donors who have an outsized impact on an organization's fundraising program. It is worth noting, though, that for the first year, in recent memory, gifts by individuals have declined. So in 2021, individuals gave 67%. And in 2022, they now gave 64%. And if bequest and corporate giving are essentially staying flat, and that gap is being made up by foundations. And so that brings us to the second theme that we saw from this year's report, which is that foundations are playing a more significant role in the philanthropic landscape. And they now account for about 21% of all gifts made in 2022. So thinking about that, tactically about one in every $5 given to charity came from a foundation. And so by comparison, when we look, you know, 40 years ago, 1982, foundations only represented about 5% of total giving. So we're seeing this shift in the pie. And I imagine that over the next few years, that shift will continue. And so what that means for fundraising teams is not only a focus on your individual major donors, but also an emphasis on building strong institutional fundraising programs.

Yeah, I mean, I think it's really interesting because we've spent some time talking about foundations this season, specifically with the funders mindset series, and I do think that there's a lot of evolution happening on all fronts, you know, and to see the foundation piece growing in size. You know, we have curated some conversations around how to build those racial relationships because It is very different than individual giving. And I just gotta tap you when we have an expert on the phone today. It's like, what are some key hallmarks for building and strengthening those relationships that you've personally seen, Elizabeth, because I think that knowing that foundations are now a fifth of giving. I mean, this has got to be part of everybody's tool kit, you know, as they're kind of putting together this year.

Yeah. So I think it comes down to really understanding who your key foundation donors are, and building relationships with the leaders of those foundations, with their teams, demonstrating the impact of foundations philanthropic investments in the communities that you're serving. So it's a bit of personal relationship building and continued stewardship and reporting.

I'm so glad we're talking about this, because I want to just kind of lift some of the nuance and unique things we heard in our funders mindset series that I think are kind of there for the taking. And we're just really lucky to sit down with three or four foundations who are looking at their work differently. And again, I'm gonna go back to this point about it's not just about the financial dollar, and I think about like, Amory Burgoyne with Emerson Collective who said, you know, we're really looking at our work. And we're thinking, sometimes it's not just the financial piece that our grantees need from us. This, to me is an exciting part of the data, because it really expounds upon us how much opportunity there is to forge new relationships with foundations. And if you are looking for something strategic and bold to build into your 2024 fundraising plan, I think an emphasis on reimagining your foundation and funder partnerships is a great place to start. I want to talk about the mega gifts and the mega donor. And it's hard not to see these things because the headlines just scream these very large numbers to us about the rise in Mega giving. So talk about what we're seeing there and what opportunity exists.

Happy to and this is an area that we've continued to track the rise in Mega giving. And these are gifts made by ultra high net worth individuals. They're substantial gifts that have an outsized impact on an organization's fundraising trajectory. So these are gifts that we're hearing about in the news gifts made by MacKenzie Scott or Michael Bloomberg, for example, these multi multimillion dollar gifts. And what's interesting is that these gifts actually totaled $14 billion in 2022, and represented about 5% of all giving made by individuals for a second year in a row. So if total individual giving was about $319 billion 5%, or 14 billion is really significant. And so what does this mean? It means that there is an increasing influence of large donors on the overall philanthropic landscape, and not only on the philanthropic landscape, but on individual nonprofits. And so when we think about how organizations are prioritizing their pipeline and thinking about how they're approaching, cultivating, soliciting and stewarding donors, there is a focus on your major principle and mega donors, because ultimately, that's where your revenue is going to come from.

And can I say something crazy about that? That 5% 15 billion $14 billion, it came from six individuals and couples, they made up 5%. I mean, the mega donor has an ability to just rock the data with massive generosity. It's fascinating to me. Well, building

on what you just shared, corporations gave 6% of total charitable giving. So you have your Mega gifts, comprising 5%. So you have this very, very, very small group of people who are having an outsized impact on the entire philanthropic pie, like they're giving just about as much as all corporations, which I think is really interesting, because mega gifts are not currently pulled out. But I actually wonder if in future years, if they're already 5%, of total of individual giving, if it's worth pulling them up,

we got to give some fist bumps to that another, the other 95% Because I love that individual giving is resilient and I mean, that speaks to the bread and butter of what we're for good. Billy talks about is pouring into those that are making sacrifices that really believe in our missions, that power our mission. And the data does support that this is where we need to spend our time and efforts. I don't know if there's something you want to share about that Elizabeth as we still reflect on just the generosity and maybe the way that that's evolving and changing through just the everyday donor out there.

It's a really important point and I know I say this now I can say every year that I'm I'm having these conversations with you both I personally believe that every Gift matters. And every gift makes a significant difference to nonprofit organizations and the communities that they're serving. What's challenging for me personally, I know last year, we had this theme of dollars up donors down this year, it's actually dollars down and donors down. And so what we're seeing is that fewer American households are in fact giving to charity. And that's the concept and a realization that like breaks my heart, because to me, philanthropy is one of the most glorious aspects of American society that we all have a collective commitment to bettering the communities in which we're a part of. And so my My wish is to see dollars up and donors up for people of all generations and all income levels to be giving a meaningful gift and meaningful can be defined personally, to organizations and to missions that are important to them and their families.

I'm so glad you're talking about this, Elizabeth, because I agree with you and I and I think we're standing in this inflection point where we're standing in a moment of immense change within our sector within the world. And I want to talk about that iceberg. And I want to talk about what we see underneath the iceberg because I think it would be easy in this situation to just have this sense of hopelessness of things are eroding away, and the base is eroding away. However, when I look at the way that millennials, Gen Z, specifically, the way that Gen alpha, I look at all three of our children as a part of Gen Alpha. These are hard wired generations who have giving service generosity care, empathy, baked into their DNA. And so what I see underneath the surface of this giving us a report is the data we're not tracking, which is engagement signals, the storytelling aspect, the advocacy, the volunteerism, the peer to peer, the networking and amplification, there is so much that is sitting there for the taking to be unleashed, people still care, people still want to help their neighbor. And if we can make them a part of the story, and we can invite them in, and we can be human. To me, that is a long game play that is going to pay dividends and generations as we warm up these individuals who already have this desire to give baked into their DNA. And it's not going to be traditional, it's not going to be probably singing across from them and passing a proposal. It may be a text, it may be a FaceTime or Zoom call, we're going to have to embrace this new world. And it's going to start with valuing that everyone matters, seeing them and making sure that diversity and inclusion have every part we can't just rely on our major gifts, we've got to look at our grassroots effort, got to give a shout out to our annual giving and donor relations folks who build that pipeline leading up to what we hope will be major donors or estate or legacy donors. So I'm stepping off my soapbox, but I had to give that to everybody else.

Okay, we've just kind of talked about some of the high level data points in the fool giving us a report while it's out. Something that I love that you and your team at CCS do is put together really our roll up to make it make sense to just the everyday person you make it available free. Would you talk a little bit about that landscape report? Elizabeth,

I would be happy to this is actually my favorite report that the firm produces. It's our annual philanthropic landscape report. It is a free report, you can download it from our website, it should be available mid to late August. And essentially it tracks and analyzes not only the Giving USA data, but research from across the field to provide a snapshot of the state of philanthropy today. So it includes a deep dive on individual Foundation, corporate giving, digital giving, planned giving, and so many more important elements of your fundraising program, as well as some action oriented insights for nonprofit leaders and their teams.

Thank you for putting together that report. We'll make sure that that's linked up in the show notes so that you can get to that as well, because we want everyone to have access. But I want to transition just a little bit, Elizabeth, because we got to talk about how to get activated around this data. So after hearing about the data and the current landscape, what do you have for everybody out there listening right now about creating these really strong cultures of philanthropy and our organizations, we would love to have some actionable steps.

So I've been thinking a lot about this actually. And to me, it's three things. It's one is what is the story that you're telling about your organization to who is the leadership that is sharing that story with your communities, both your executive and professional leader? share as well as your volunteer leaders. And then third, who are the funders that you are approaching to request the philanthropic investments that will realize the stories that you're telling. And so I think about this as your case for support, how you're communicating your mission, the philanthropic investments that you're receiving on the communities that you're serving your leadership. So how are you leveraging your professional leader and volunteer leadership as fundraising ambassadors to build energy and momentum around your case for support and your vision and the story? And then who are the donors, particularly, as we talked about your major donors, whose investments will allow you to make that vision a reality. And so you know, there's many, many things we can do tactically to bring those various pieces of your fundraising program to life, and to elevate it and take it to the next level. But at the core, it's really the story that you're telling who's telling the story, and who's funding the story.

I mean, it's so good that you kind of brought it back to the space because I think one of the banners, we always love to hang out, or whenever these big reports of any kind come out, I think it's easy to just get focused on that. But at the end of the day, it's like, what can we do within the walls of our house? You know, how can we link arms most locally most, before we go and get all stressed out about the national averages and things like that, because we have so much opportunity in our own donor file, and the only things that we can control and the things that we can pour into. So love that activation and also love philanthropy and know you share in this joy too. And so as we start to round out this episode, I'd love to invite you to share a story of philanthropy that maybe has moved you. And every time you come on you I share something that moves,

so I can't hear I look forward to this story. She always brings a new one. And it's like getting better and better every year

to something you can do that. Totally kind of you have for us, Elizabeth. Oh my gosh, the pressures really on.

You know, I don't it's funny. I was also thinking about this. And I felt like I was coming into the conversation without like a magical philanthropic moment. But I think for me, it's actually right now then how can I teach my children philanthropy? And so what's the story that I want to share with them about why we give back and how we give back not only, you know, dollars that we can give to an organization, but how we can volunteer and how we can help others and be compassionate. Because to me, philanthropy is so much it's, you know, at its core, right, the word philanthropy, it comes from the Greek words Philo's, and I'm thrombose, which means loving, and humankind. And so it's really love for humankind. And I've been thinking a lot about how we, as people, and particularly as parents can communicate that message to the next generation. And so, the story for me today is one that's evolving in real time, it's how are we teaching our children what it means to love others, and to be there to support humankind.

You know, you're preaching to me when you talk about kids and philanthropy, because I, I love that your focus is there. And there's nothing like having little kids and watching the state of the world around you and saying, how you going to navigate this. And I, you can say as many things as you want to your kids, but what we model and what they see and are involved in are the things that really leave lasting imprint. So thank you for talking about that. And I know you're going to do an amazing job with your children, because you live that my friend, but you're an old pro here, you know, we're going to round out this conversation with a one good thing. And so what would be your one good thing that the audience could take away today?

It's family. So for me right now, my priority and focus beyond philanthropy is raising my two girls and it is a privilege and a joy, and for sure, challenging at times. But my one good thing right now is family. And the idea that life is precious, and time is fleeting, and especially in the nonprofit sector, where we have an increasing workload, and it often feels like we are climbing mountains instead of hills. I really want to emphasize the importance of prioritizing family, whether these are your children, your parents, your siblings, you know, perhaps friends that you consider family but making an effort to prioritize community because ultimately that brings us the energy and joy and resilience to put our best selves forward each day professionally as well.

Thank you for centering us. I mean, that's what it's all about. That's why we all want to pour into this work for the legacy we're creating. So I mean, a friend people are gonna want to connect with you and with all the cool things that y'all share at CCS and as an advisor to for organizations that are looking to really go to the next level point as to all the ways that you CCS show up online and connect us,

of course. So if you are interested in learning more about CCS, you can reach out to me directly or take a look at our website to learn about the ways in which we support and work with nonprofits. And then if you're interested in connecting with me personally, you can send me an email. For better or worse, I'm always on email. You can connect with me on LinkedIn, as well as my professional Instagram Elizabeth, Bernie, April.

Thank you, my friend for coming in and explaining it to us like we're five year olds again. It is truly a joy to just get to hang in your orbit and we are rooting for you and all the things that you do.

Thank you. And thank you again for having me on. The We Are For Good podcast. It is a highlight every year and I hope this conversation was valuable to everyone who tuned in. So grateful

Dorian, good to see you.

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