Charities Around the World Struggle to Raise Sufficient Money as Demand for Services Rises

For my article this week, I chose this one by Hall Hall:
http://philanthropy.com/article/Charities-Around-the-World/125041/

The article describes donation patterns for non-profits around the world. When comparing any sort of business or non-profit's trends, it's important to look not only at similar organizations locally but also worldwide. According to this article, charities around the world use face many of the same issues as American charities but often incorporate different strategies. For instance, non-profits in all ten countries surveyed feel that attracting new donors is important. Some contacted donors through direct mail; others use special events and personal relationships with potential individual donors.

Trends amond donor demands also differed among countries. In some places, donors are more likely to earmark donations to specific projects and request updates on how their money is being used, while in others, donors usually make general donations without specifying what they want them used for.

I think another thing to consider, that the article doesn't mention, when comparing donation trends across countries, is the always important why factor. Cultural values and practices can have a huge influence on the ways people donate, and it is often difficult to culturally different places without that backgorund information.

As Pledges Fall Short, Colleges Face the Music

Being a college student, I think it's important to know where my school is getting money, how much money it is getting, and what it's spending money on. That's why this week I chose this article from the Chronicle of Philanthropy by Kathryn Masterson:

http://philanthropy.com/article/As-Pledges-Fall-Short/124873/

The article describes what happens to colleges when donors fail to contribute all of the money they pledged. In most of these cases, the pledges are large amounts that are intended for building projects. Colleges have a few options when accepting large pledges. They can borrow money to begin the project before the entire pledge is fulfilled and use the donor's contribution to pay off the loan. They can also delay starting the project until a certain percentage of the pledge has been received. I think that, unless the project is of extreme importance, the second option is the better one.

For instance, say an alumnus of a college pledges several million dollars to build a new athletic building on campus. If the college begins the project after only receiving 10% of the pledge, the school can take a huge hit if the donor is unable to contribute any more money. Also, other important project may be pushed back even farther. Let's say that this school's current biggest concern is constructing two new buildings: one athletic and one academic. The donor in question happens to have been on the school's football team and is very interested in seeing the new athletic building become a reality. If the school begins the project and then receives only a small percentage of the pledge, it is forced to reallocate funds to finish the project, funds that might have otherwise gone to the construction of the academic building. The construction of the academic building is then delayed until it can receive further financial support.

However, if the school holds off on the project until 50% of the pledge is received, it faces less of a burden if the donor can't fulfill his committment.

No school is ever going to receive 100% of its pledges 100% of the time. It's a fact of life. But by delaying the beginning of pledge-supported projects, schools can essentially create their own safety nets and decrease potential financial burden on itself. I think this is the smartest option when dealing with large pledges that are supposed to extend over long periods of time.

Donors plan to give the same or less this year

Since my client for my research class wants to recruit younger donors, I thought it might be interesting to look at this article by Raymund Flandez about how much current donors plan to donate next year:

http://philanthropy.com/article/Donors-Plan-to-Give-the-Same/124780/

The poll found that most donors plan to give either the same amount of money they currently give or less next year. It also found that confidence levels among donors to all types of charities had dropped. Donors cited the economy and unexpected personal expenses as their main reasons for not increasing donations.

Even though the recession has officially ended, it will take time for the economy to fully recover. Most donors predict that it will take about two years. It will also take time for individuals' bank accounts to recover, so it seems logical that charitable donations will be slow to increase. This puts exrta pressure on non-profit organizations to increase donor confidence.

Even though the article doesn't mention anything about whether or not people who don't donate money plan to start this year, this article makes me think a lot about my client for my PR Research class, the Church Health Center. If the majority of current donors don't plan to give more, it's unlikely that most non-donors will start giving. It makes me wonder if the Church Health Center will be able to recruit the new young donors it wants.

This whole article doesn't make me very optimistic, but I'm sure if the right tactics are used, any charity can increase donor confidence and donations, even in the aftermath of a recession.