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Matt Beem
President and COO
Kinetic Fundraising, Inc.

Your Giving, Large or Small, Greatly Helps

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Saturday, October 27, 2012

Independence, MO – I taught the first session of an eight-week course on major and planned giving last week .

I’ve always enjoyed the vigorous discussion of the college classroom. Last week’s conversation got me thinking about the remarkable efficiency of our nation’s nonprofit sector, which is unparalleled anywhere else in the world.

One of the 17 students asked me to define a major gift. I told her a major gift is always among the largest a nonprofit receives and is a commitment that requires consideration. It’s not, in other words, a gift made quickly in the same manner one might decide to buy popcorn from the Cub Scout selling door to door.

I went on to describe the source of nearly all major gifts: People just like you and me. Statistically, we know that individuals – not corporations or foundations, the other sources of private philanthropy – gave 81 percent of all charitable gifts reported by nonprofits and taxpayers in 2011, the most recent year for which data is available. The proportion is consistent with previous years.

What’s more, I continued, not every individual who gave last year to U.S. nonprofits gave equally. In fact, about 10 percent of all individual donors gave about 90 percent of the $242 billion they contributed to nonprofits in 2011 in the United States.

Therein lies the answer to the student’s question: Major gifts are given by a few significant donors whose support collectively constitutes the majority of an organization’s philanthropy. But that’s not what got me thinking about the remarkable efficiency of our nation’s nonprofit sector.

What triggered that rumination was what I said next. I went on to explain that I don’t believe the $298 billion given in 2011 to nonprofits – the sum of the $242 billion given by individuals, $14 billion given by corporations and $42 billion given by foundations – comes close to reflecting the full value of our nation’s philanthropic sector.

Remember: The numbers cited above come only from gifts to 501(c)(3) organizations reported by individuals and nonprofits. We know not all donors report charitable gifts on their tax returns.

Some in-kind gifts, such as professional services, are not deductible. Others, including many cash gifts of less than $250 and gifts made by non-itemizers, simply aren’t claimed. And the value of volunteer service, which isn’t quantified anywhere on individual or nonprofit tax returns, has a profound positive impact.

My estimate is that charitable giving in the United States is in fact two or three times – and maybe more – the $298 billion reported to have been given to U.S. nonprofits last year. That’s $600 to $900 billion in 2011 alone.

Where else does a sector of our economy double or triple its financial input? And where else does our society engage so many well-intentioned people doing so many good things for others?

Think about these things the next time you give to your church, alma mater or local relief organization. Your philanthropy is of great value to the nonprofits you support, but it also leverages much more than its face value in gifts from others.

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