Giving USA Annual Release fraught with impossible and immoral problems.

2014 ended 6 months ago. On June 16, 2015, the Giving Institute released the Giving USA annual report on 2014 giving.

There are so many problems with Giving USA and the Giving Institute that it’s hard to determine where to begin the discussion, but we can try.

  1. What is the real, practical use of the report that will help nonprofits raise more money and create better budgets?

    There isn’t one. Their basis is IRS data that is 2 years old – this year, they are using 2012 IRS data to determine what happened in 2014. It’s similar to using the June 16 issue of the Dallas Morning News from 2012 to not only tell us what happened in 2014, but to help us make decisions about what to do in the last half of 2015. Giving USA’s biggest problem is that it has no utility.

    Perhaps the best example of Giving USA’s lack of relevance is their product sales. There are not enough practitioners buying the products to support its annual research and production. To keep it alive, the money to produce Giving USA is ‘contributed’ in the millions of dollars by the largest and most lucrative fund raising consulting firms and consultants in the US. (More on this later)

  2. Giving USA reaches the same conclusion every year…US charitable giving is pegged at 2% of US Gross Domestic Product (GDP).

    This is, of course, impossible. There is no other single sector of the US economy that demonstrates this consistency. Here is some compelling evidence to the contrary.

    • The number of nonprofits has grown more than 50% since 2000. Yes, many fail, but several are quickly becoming powerhouses.
    • Donor Advised Funds have been/are thriving:
    • Chart

    • There have been 6 record years of giving to education.
    • Economic Development Corp: “Nonprofits were one of the only sectors that continued to experience positive job growth during what was dubbed the “Decade of Turmoil” from 2000 to 2010, during which they consistently outpaced the for-profit sector. Nonprofits added jobs at an average rate of 2.1% per year, while employment in for-profit enterprises fell an average of 0.6% per year. Even at the height of the Great Recession from 2007 through 2009, nonprofit organizations added jobs at an average rate of 1.9% per year, while the private sector lost jobs at a rate of 3.7%.” This could not have happened without significant charitable giving growth
    • Innovation of online and web-based giving has skyrocketed in the last 15 years. Here are just a few of the most notable examples:
      • Donor Relations Management systems (Blackbaud’s Raisers Edge, Sales Force, Donor Perfect, Etapestry, and more)
      • Crowdfunding is flourishing (Razoo, Kickstarter, Fundly, Crowdrise, etc)
      • Online Special Event Support (Blackbaud’s Kintera, Convio, Silent Auction Pro, etc)
      • Workplace Giving (Benevity, Grantspace)
      • Donor Advice and Charitable Organization vetting (Charity Navigator, Guidestar, Brightfunds)
      • Email solicitation
      • Social networking solicitation
  3. It is impossible to believe that despite the innovation, the growing number of nonprofits, the annual changes in the economy and reductions in government assistance that charitable giving is always 2% of US GDP. The real fact is that charitable giving has grown to 2.8% – 3.0% of US real GDP and continues to increase. America is becoming more charitable. That is great news.
  4. Giving USA and the Giving Institute have some important questions to answer:
    • What is the purpose of Giving USA?
    • Why are there no experienced fund raising practitioners on the Giving USA University of Indiana School of Philanthropy staff that assemble the annual report?
    • How can you logically use IRS data from 2012 to determine giving in 2014?
    • Churches (the largest giving sector) do not report IRS data. Giving USA reports publicly that it does not use surveys. What scientific process are they using to estimate 1/3 of the charitable giving economy?
    • How is Giving USA measuring the impact of Donor Advised Funds?
    • Why does it take 6 months for Giving USA to report results from the previous calendar year?
    • Why does Giving USA data differ so dramatically from sector survey data? (see Council for Aid to Education Report)?
    • Why can’t Giving USA estimate giving monthly or quarterly?

All the funding supporters of Giving USA are companies and consultants who make or made their profits from working with nonprofits, including:

  • Blackbaud
  • Campbell & Company
  • Grenzenbach Glier & Associates
  • Marts & Lundy
  • Benefactor Inc
  • Bentz Whaley Flessner
  • Curtis Group
  • Dini and Associates
  • Harris Connect
  • Alexander McNab
  • Alexander Haas
  • Donor Perfect

There is no support from any donor who does not or has not derived revenue from working with nonprofits. You have to ask, “Why?”

Are all of these firms ‘investing’ in Giving USA because the annual results make them look good to their clients?

“Giving USA shows that giving to education was up 4.9% in 2014…but because of our work with your university, your giving was up 11.5%. We did a great job for you! Let’s talk about a new contract.”

Giving USA loves to talk about “peer-reviewed transparency.” But when did that last occur? Will Giving USA and the Giving Institute allow intense examination of their methodology by leading economists from Stanford, Harvard, London School of Economics, the Wharton School at Penn, MIT, the University of Chicago, Boston University and coordinated by Pulitzer Prize winning economists Thomas Sargent and Christopher Sims? Perhaps funded by the Case Foundation, the Gates Foundation, or the Skoll Foundation or AFP?