Rossi’s Roundup: Giving USA, economic data and a camera for scents

The dog days of summer have arrived with their heat, and once again we’ll see interesting sunsets and skies as the Sahara sand makes its way into the U.S.

Bizarre studies emerged this month such as When Inflicting Pain on Others Pays Off for Charity. Conducted by the Journal of Consumer Psychology, UC Riverside School of Business authors attempt to articulate and quantify the appeal of schadenfreude (“malicious pleasure” in German) through the lens of marketing psychology.

The New York Times Health & Science Section devoted the last week of June to Pets. Articles cover the gamut, from “Are we loving our pets to death?” to the expense of having a pet, plus fish behavior, cat behavior, canine cognition, animal hospital social workers and some of the hottest items on the pet market.

To ignite the imagination to global challenges, the 12th annual Core 77 Design Awards were recently announced. The concept of a scent camera was submitted by a student from Loughborough University. This innovative product is designed to help record and relive memories in a unique way.

Focused on scent as the primary medium, the product offers an enchanting way to reminisce about the best times of your life. You’re able to buy a scent recreation as a souvenir from a holiday destination and then use it in the future to recall your journey. You can purchase specific scent pods in each city, then dive into a multidimensional reminiscence with the Memory Station. This device, armed with ambient lighting, sound effects, projection and scent release, allows a holistic sensory recall of your cherished memories.

My mind immediately went to how wonderful this would be in hospitals, rehabilitation centers, missions and shelters, providing enrichment to both people and animals!

For another view, this month Ronnie Richard shares fundraising and marketing insights inspired by some of his favorite board games using strategy and execution and covers a few other subjects in the Thinkers Newsletter on LinkedIn. We’ve also got some great blog posts to incorporate into your strategies or help you launch with idea expansion.

It’s been another month of some great report releases. Grab your favorite beverage.

1. Reminder: Update your organization’s ratings

It’s time to update your organization’s profiles on Candid/GuideStar and CharityNavigator. While you’re at it:

• Check to see if your organization is listed on CharityWatch Top-Rated Charities list.
• Check the BBB Give.org to see if your organization is on the list.

2. Giving USA: The Annual Report unveiling

The week of June 24 unveiled the key critical findings from Giving USA: The Annual Report on Philanthropy. I’m sure you’ve already seen the headline, “Giving Continues Its Decline, Down 2.1% in 2023. Can Fundraisers Turn the Tide in 2024?” or “Giving USA 2024: Donors Gave More, Inflation Deflated It” or something similar.

This is the second consecutive year Giving USA found that charitable giving has declined. In 2022, Giving USA reported the largest year-over-year decline since they began tracking giving in 1957.

Nevertheless, five of nine subsectors reached their all-time high in 2023, even when adjusted for inflation: human services; education; health; arts, culture and humanities; and environment/animals.

Strangely, most economic indicators were stronger in 2023. After all, the U.S. gross domestic product grew by 6.3 percent, the S&P 500 reached record highs and the inflation rate fell significantly. However, charitable giving did not even keep pace with inflation.

Individuals make up two thirds of total giving but declined by 2.4 percent in inflation-adjusted dollars. Coupled with the multiple-year trend of fewer Americans giving to charity, these findings reinforce the nonprofit industries concerns that lower- and middle-income individual donors are disappearing.

One area I continue to watch includes donor-advised funds (DAFs). DAFs remain a peculiar area in the “Giving USA” report. Donors’ gifts to national commercial DAFs like Fidelity Charitable and Schwab Charitable are counted (along with United Ways and voting groups) in the public-benefit society category. However, donors’ gifts to DAFs at community foundations fall under giving to foundations. So, we are still not seeing a clear picture of the individual giving that has moved making gifts through donor-advised funds.

There are more than 1.5 million nonprofits in the U.S. With donor retention lagging and acquisition down, it might be time to review your fundraising and marketing efforts and consider what makes your nonprofit distinctive and different. Broaden your focus on Gen X and others but also keep in front of your Boomers, knowing the $70+ trillion wealth transfer has begun. And make sure you have a strategy for donor-advised funds.

3. GivingPulse Q1 2024 Report: Fewer appeals resulted in fewer donations, but some survey respondents say they would have given more if asked.

Giving in the first quarter of 2024 held steady compared to the last quarter of 2023. The GivingPulse report is based on weekly surveys of Americans about their giving habits.

The survey found that giving dipped in February but rebounded in March. During the period of decline, there was also a drop in the number of appeals donors received, suggesting people are willing to be generous when they’re asked, the report says. Based on responses to the GivingPulse survey, the report estimates that an additional 7 percent of respondents would have donated in the first quarter of 2024 if they had been asked.

The report highlighted the connection between volunteering and generosity. “When monetary donation rates were at their lowest in Q1, volunteers made up over half of remaining donors,” the report said. Woodrow Rosenbaum, chief data officer for GivingTuesday, says fundraisers shouldn’t undervalue volunteer involvement.

Other highlights from the report:

• There was a small uptick in the share of donors giving just money, rather than money, time and items. Rosenbaum said it wasn’t clear why. It could be that people are donating to international causes, which typically would skew toward funds rather than time or items.
• Giving by people who plan their charitable donations in advance remained stable, while spontaneous giving dropped 5 percent, indicating that more “planners” kept giving in the new year.
• International giving increased 22 percent among informal givers — people who donate to individuals or nonregistered groups, such as neighborhood associations — but was steady for formal donors — those who donate to registered charities.
• Seventy-six percent of respondents under the age of 30 said they hadn’t been solicited in the previous week. People ages 25 to 34 were most likely to say they’d respond to an appeal.

4. Majority of Americans wrongly believe US is in recession

According to a recent Harris X Guardian poll survey, the majority of Americans believe the nation is currently in a recession (it’s not), 49% think the S&P 500 is down for the year (it’s up 11%), and the same percentage believe unemployment is at a 50-year high (it’s not).

On a personal level, many people are feeling the strain because of the one elephant in the room that just won’t go away: inflation. Indeed, a Gallup poll from March found that inflation continued to outrank crime, healthcare, terrorism, energy, the environment, drug use and many other topics as America’s top concern.

Many Americans put the blame on Biden for the state of the economy, with 58% of those polled saying the economy is worsening due to mismanagement from the presidential administration. The poll underscored people’s complicated emotions around inflation.

5. Donor-Advised Funds Soar in Popularity as Nonprofits Successfully Engage New Donors

Despite speculation that wealthy people are amassing money in donor-advised funds, the figures coming from DAF organizations don’t support that narrative. At Fidelity Charitable, 88% of account holders recommended at least one grant in 2023, and about 75% of dollars contributed to DAFs, on average, are granted within five years.

Fidelity Charitable reported almost $11.8 billion in grants from its donor-advised fund holders in 2023. With more than 322,000 donors recommending more than 2.3 grants to nearly 199,000 charities around the world, 2023 resulted in an almost $600 billion increase in gift dollars. Last year, 1,345 of those grants were $1 million or more, according to Fidelity Charitable’s “2024 Giving Report.”

Schwab Charitable granted $6.1 billion to 127,000 charities, a 31% and 11% spike, respectively, in 2023. Though this DAF-sponsoring organization’s fiscal year ends June 30, it released its calendar year numbers as well. Notably, Schwab Charitable noticed a significant number of grants recommended during year-end giving, specifically GivingTuesday through Dec. 31, when donors recommended 250,000 grants totaling $1.5 billion. 

After a down year for the last fiscal year reported, National Philanthropic Trust rebounded by granting $4.94 billion through more than 119,000 grants to more than 39,000 charities in 2023. 

Last year, Vanguard Charitable donors recommended more than $2.6 billion to nonprofits, a 39% year-over-year increase and the seventh straight year of growth for the grantor. That billion-dollar figure includes more than 209,000 gifts to more than 56,000 nonprofits. The average grant was more than $12,000. Though the DAF-sponsoring organization runs on a fiscal year that ends on June 30, it provided calendar year figures this year. 

Here are seven ways DAFS are impacting nonprofits:

• Reaching donors where they are
• Providing faster support during disasters
• Giving the ability to steward donors across other channels
• Creating a new channel for corporate support
• Simplifying non-cash gift processing
• Increasing unrestricted funding for underfunded expenses
• Funding nonprofits at higher rates than traditional foundations

And on a side note – GoFundMe has launched DAFpay as a method of payment in partnership with Chariot.

6. Schwab Charitable Celebrates 25 Years of Donor-Advised Giving with New Brand: DAFgiving360

Schwab Charitable announced it has renamed the organization DAFgiving360. Its purpose:

• Use DAFgiving360 to help make donor-advised funds synonymous with giving so that every individual considers this simple, tax-smart and efficient solution when they think about making charitable donations.
• Help donors and their advisors understand who DAFgiving360 is (an independent 501(c)(3) public charity) and what it provides so that they can leverage a donor-advised fund solution to help maximize individual giving as part of their financial planning.

Highlight DAFgiving360’s continued commitment to providing a holistic giving solution, centered around DAFs, for current donors, advisors and future generations of philanthropists.

7. 5 Community-Building Tactics To Boost Donor Acquisition

The fact is that we’re falling short on donor acquisition because of our inability to make new donors feel at home with our organizations. New supporters won’t be part of our community unless they feel just as connected with us and their peer supporters as they do to the mission. Use these cost-effective, community-building tactics to boost donor acquisition: 

• Champion Participants: Use gratitude as a retention strategy for pre-donors. Once anyone participates in anything they do for your organization, celebrate them like a donor. Organizations that label their participants as volunteers or some other specific title, like “cause hero” or “champion,” are 66% more likely to see them donate.
  
  
• Watch Your Words: The Institute for Sustainable Philanthropy found that when organizations use the same words that donors use to describe themselves, donations increased 27%. For example, when someone called themselves big-hearted and conscientious and those words were used back to describe them, the donor gave more than expected.
  
  
• Celebrate with Empathy: A 2022 Springtide Research Institute study found that when congregants feel they belong, they were an astounding 12 times more likely to donate and three-and-a-half times more likely to recommend their charity of choice. The first scientific study of its kind showed that activities like 90-minute online workshops and in-person meetings were among the ways to increase a sense of belonging.
  
  
• Embed Staff into Communities: Organizations that can develop a strong culture of how everyone on staff will behave with one another can embed staff — especially development and events hires — strategically in communities where they can connect with cause champions on a regular basis.

Shared Stewarding and Thank-Yous: A study found that when donors were personally thanked within 24 hours, the donor was 40% more likely to give again. This has been tested out among new participants; finding those personal thank-you phone calls from board members, staff leaders and volunteers yielded second-time donations at roughly the same rate.

8. Here’s the Income It Takes To Live Comfortably in Each U.S. State – 2024 Study

The calculations for income needed in each state to live comfortably were done by SmartAsset, using the cost of necessities sourced from the MIT Living Wage Calculator, last updated on Feb. 14, 2024.

"Comfortable" in this case was defined as the annual income required to cover a 50/30/20 budget, allocating 50% of earnings to necessities such as housing and utility costs, 30% to discretionary spending and 20% to savings or investments.

Key Takeaways:

• Massachusetts is the most expensive state in which to live comfortably. A single adult needs to make at least $116,022 annually or $55.78 per hour.
• West Virginia is the least expensive for a single adult, who only needs to make an estimated $37.88 per hour, or $78,790 annually.
• To live comfortably on your own in the top five states, a person would need to earn nearly double the typical income for single earners, as the U.S. median income for single, full-time workers is around $60,000, according to Labor Bureau data.

Outside of the big cities, life can be cheaper for many Americans. Though, after years of high inflation, cost increases have affected almost everyone.

9. Economic Headlines

The U.S. Federal Reserve’s preferred inflation gauge met forecasts in May, keeping alive expectations that interest rates could fall faster than policy makers forecast. Hype around artificial intelligence has helped push major stock indexes near records by boosting shares in tech companies, chip makers and even utilities. The S&P 500 and Nasdaq Composite notched records in mid-June.

• Slowing U.S. Inflation Fuels Expectations of Interest Rate Cuts. The core Personal Consumption Expenditures Price Index, which excludes volatile energy and food prices, increased 2.6% in May from a year ago, slowing from April’s 2.8% pace. The reading met the consensus of economists surveyed by The Wall Street Journal. Core PCE inflation rose 0.1% in the month, compared to a 0.2% increase in April. The headline 12-month reading was 2.6%, slowing from April’s 2.7% pace. In the month, the PCE was flat after rising 0.3% in April, marking the first time consumer prices haven’t risen in six months. Consensus was met in all readings. The Fed targets 2% inflation.
• Americans Have More Investment Income Than Ever Before. A booming economy and rising household wealth help some consumers keep spending. Growing investment income and household wealth have joined near-full employment and rising wages to keep millions of Americans spending their way through price hikes. The economy’s charge through higher interest rates is putting unprecedented sums into consumers’ pockets, pushing U.S. asset values to records and helping many high earners avoid the withering effects of inflation. In the last quarter of 2023, wealth held in stocks, real estate and other assets, such as pensions, reached the highest level ever observed by the Federal Reserve.
• Economic Data Paint a Picture of Two Americas. The rich are feeling confident, but lower-income households are growing cautious. A growing disconnect between the fortunes of upper- and lower-income Americans could account for some of the crossed signals. It isn’t just government reports: Companies have been warning in recent weeks that consumers are pulling back. One possible reason for the mix of caution and abandon is that people lower on the income ladder who spend a bigger share of their income on necessities are feeling pinched and less confident about their job prospects. Meanwhile, wealthier households are still spending. What is becoming hard to miss is that companies that serve a wealthier clientele sound much more confident lately. While food makers see shoppers struggling with inflation, cruise lines are booming.
• Even a Slowly Cooling Labor Market Often Ends with a Recession. (Ok, it’s complicated.) The Labor Department’s monthly jobs report is based on two surveys that are now sending conflicting messages. Its survey of payrolls of employers shows payrolls have grown by 2.8 million jobs over the past year, 248,000 jobs a month this year. The second, a survey of households used to calculate the unemployment rate, shows employment up 216,000 over the past year when jobs are defined similarly. The amount of actual hiring is probably somewhere in between the two measures. While that would leave job growth above the historic rate necessary to keep unemployment from rising, that is less encouraging than it seems.

Visit the RKD Resources Page for some great posts, podcasts and webinars

Blog updates:

• If nonprofits want to accelerate growth, we have to shift our thinking
• Citygate 2024: Talent, tools and technology
• The future of tribute donor retention: What will your nonprofit do to innovate?
• Nonprofits, get ready: Apple’s new AI tools aim to change email
• Rossi’s Roundup: What drives the heart, thanking donors, and scratch & sniff stamps
• Why evergreen media campaigns are a smart investment for nonprofits
• Google delays third-party cookie phase-out—again

Thinkers Monthly LinkedIn Update:

• Not just for kids: What board games can teach us about fundraising
• Sometimes you just need to pause and celebrate
• Step up to the plate: What nonprofits can learn from MLB
• Travel diaries: A journey through authenticity and communication
• Mardi Gras magic: An exciting launch for the 2024 Nonprofit Marketer's Compass
• Get ready to enter the next phase of the economy, AI and fundraising

Podcast updates:

• Thinkers: Kindness and compassion: Building a better world with Brad Montague
• Thinkers: Transitioning into the nonprofit sector with Christa Stelzmuller
• Chat: Meet Alisa Gray from Kentucky Humane Society
• Thinkers: Behind Neon One’s Recurring Giving Report with Abby Jarvis
• Thinkers: Leveraging AI for more engaging content with Ross Simmonds
• Chat: Meet Kelley Likes from Humane Society of the Pikes Peak Region

Webinars and Past Webinar Recordings:

• Nonprofits: Get more out of GA4 with Jenn Thompson & Kord Hickson
• Rebuild trust and reach new audiences at the same time w/Nicole Daily
• Transform your newsletters to be donor-centric with Lisa Rossi
• Craft captivating videos that engage your donors with Chris Weiland
• How to build stories around your content with Billy Vaudry

Benchmarks:

• Animal Welfare
• Food Bank
• Rescue Missions 

eBooks and Research:

• The 2024 Nonprofit Marketer's Compass
• Solid Gold: The Nonprofit Marketer's Guide to Trust
• Listen Up: The Nonprofit Marketer's Guide to What Donors Want

Donor perspective, marketing how your nonprofit is distinctive from similar organizations, as well as developing plans for your donor audiences should be coming into focus. Donor trust is key to retention and growth. Prepare your case and show your board of directors and committees why you and your team need specific resources to retain your organization’s most precious asset.

But for now, take a moment to recharge for a few days. Cheers to a fabulous Independence Day and weekend!

Let me know if something was helpful above or if you have any questions.