In Peer-to-Peer Fundraising, Smaller Programs Seeing Big Gains

If peer-to-peer fundraising were a race, smaller campaigns would be more than keeping pace with bigger campaigns.

A study by the Peer-to-Peer Professional Forum shows the financial results of smaller peer-to-peer fundraising efforts are broadly overshadowing the results of bigger efforts.

From 2006 to 2015, the study found, four peer-to-peer fundraising programs that were dominant 10 years ago have since seen “precipitous drops” in revenue. Those four programs are the American Cancer Society’s Relay for Life, the Leukemia & Lymphoma Society’s Team in Training, the March of Dimes’ March for Babies and Susan G. Komen for the Cure’s Komen 3-Day. From 2014 to 2015 alone, revenue for the biggest of those four — the American Cancer Society’s Relay for Life — fell 8.1 percent to $308 million.

Meanwhile, smaller, lesser-known programs have racked up sizable revenue spikes. For instance, the American Diabetes Association’s Tour de Cure collected $27.2 million in 2015, up 172.7 percent from 2006.

“While a handful of brand-name programs have struggled to keep pace with their prior results, many highly successful campaigns have emerged. As a result, more charities than ever are seeing significant revenues from peer-to-peer fundraising,” says David Hessekiel, president of the Peer-to-Peer Professional Forum.

At DMA’s 2017 Washington Nonprofit Conference, representatives of CDR Fundraising Group, Disabled American Veterans and The National WWII Museum will delve into peer-to-peer fundraising during a session titled, “Catching Fire: Crowdfunding, Peer-to-Peer Fundraising and Beyond.”

Through peer-to-peer fundraising, supporters of a nonprofit tap friends, relatives and colleagues for donations, often through participation in walks and rides, Hessekiel’s organization says.

In its study, the Peer-to-Peer Professional Forum found that when fundraising totals for the four programs that witnessed substantial drops in revenue were subtracted, the remaining efforts collectively raised $1.11 billion in 2015, up nearly 54 percent from 2006. By comparison, the four former leaders saw their collective revenue decline about 36 percent from 2006 to 2015, winding up at $455.8 million.

Among the biggest gainers from 2006 to 2015 was the Alzheimer’s Association’s Walk to End Alzheimer’s, the Peer-to-Peer Professional Forum study indicates. The program raised nearly $77.5 million in 2015, up 154 percent from 2006.

Walks like those sponsored by the Alzheimer’s Association are gaining ground, according to a study by Blackbaud, a provider of fundraising software for nonprofits.

From 2013 to 2015, the Blackbaud study says, online donation revenue for walks shot up 17 percent, with endurance events such as marathons experiencing an even greater increase — 21 percent. However, revenue was down 4 percent for cycling fundraisers and down 13 percent for 5K fundraisers during the same period, Blackbaud says.

Whether donations are up or down, peer-to-peer fundraising programs such as walks and 5Ks remain the “bread and butter” of many nonprofits, according to Blackbaud. However, that “bread and butter” is being threatened.

“Today, there are more nonprofit organizations, more events and more competition for participants and dollars,” Blackbaud says. “Additionally, you have crowd-fundraising platforms popping up left and right, giving individuals more opportunities to create their own fundraising pages and events without needing a nonprofit to provide fundraising tools.”

Nonetheless, Blackbaud notes, some peer-to-peer fundraising programs keep thriving. Fundraisers like the American Heart Association’s Heart Walk, the Alzheimer’s Association’s Walk to End Alzheimer’s and the Memorial Sloan Kettering Cancer Center’s Cycle for Survival “all deal with the same uncertain times, yet they’ve found a way to continue to grow year over year,” Blackbaud says.

In fact, the Heart Walk proves that not all large, well-established peer-to-peer programs are suffering from slipping revenue. According to the Peer-to-Peer Professional Forum, the Heart Walk pulled in $117.1 million last year, up nearly 5.7 percent from 2014.

“We’ve seen a true democratization of peer-to-peer, where your success isn’t driven by the type of event you run, but rather your ability to produce excellent experiences for volunteer fundraisers,” Hessekiel says. “You no longer have to be among the largest or most established organizations to raise money through peer-to-peer.”

This article is brought to you by the DMA. Click here to register for Nonprofit Federation Conference, Feb. 22-24, 2017, in Washington, D.C.

Donor-Advised Funds Ushering in a New Era in Charity

In October 2016, The Chronicle of Philanthropy rocked the fundraising world with huge news: For the first time, a nonprofit that administers donor-advised funds had pushed the United Way off its perch as the biggest charity in the U.S.

It was only the second time that United Way wasn’t No. 1 on the publication’s annual ranking of the 400 biggest U.S. charities, based on the amount of money they raised. Since the Philanthropy 400 debuted in 1991, United Way had been in first place, except for the one year when the Salvation Army claimed the top spot.

What’s startling about the 2016 ranking is that a manager of donor-advised funds, Fidelity Charitable, now occupies the philanthropy throne, rather than a traditional charity. Fidelity Charitable’s rise to the top signifies the growing significance of donor-advised funds in charity circles.

At DMA’s 2017 Washington Nonprofit Conference, fundraising consultant Jack Doyle will dive into the subject of donor-advised funds during a session titled, “Fishing For the Big Fish: Donor-Advised Funds.”

In 2015, the biggest fish in donor-advised funds — Fidelity Charitable — collected $4.6 billion in donations, compared with the United Way at $3.7 billion, The Chronicle of Philanthropy says. Fidelity Charitable’s haul dropped the United Way to No. 2 on the Philanthropy 400. Another nonprofit manager of donor-advised funds, Schwab Charitable, is ranked No. 5. Fidelity Charitable and Schwab Charitable are affiliated with the Fidelity and Schwab investment powerhouses.

In large part, Fidelity Charitable has grown so much because it has invested heavily in taking the pain out of online giving, Pamela Norley, president of the donor-advised fund administrator, told The Chronicle of Philanthropy.

“Donor-advised funds are the fastest-growing charitable giving vehicle in the United States because they are one of the easiest and most tax-advantageous ways to give to charity,” Fidelity Charitable says.

As explained by The Chronicle of Philanthropy, a donor-advised fund works much like a charitable savings account; donors receive the same tax benefits they would get with a gift to a food bank or homeless shelter, but the donors’ money often is kept in the fund for many years and invested.

“Although the nonprofit managing the fund technically controls the money, donors recommend which charities should get gifts and when,” The Chronicle of Philanthropy says.

The rising popularity of donor-advised funds is borne out in Fidelity Charitable’s own results: During the first nine months of 2016, it distributed a record-breaking $2.3 billion in donor-recommended charitable grants, up 15 percent from the same period in 2015. Since its founding in 1991, Fidelity Charitable has granted nearly $25 billion to public charities. Today, the average grant is about $4,300.

Administrators of donor-advised funds like Fidelity Charitable and Schwab Charitable could see their assets swell even more in the near future. Money Magazine points out that if President-elect Trump and congressional Republicans make good on promises to cut tax rates, the tax deduction for charitable giving could be watered down as early as 2017. Through a donor-advised fund, a philanthropist can better manage the tax benefits of charitable giving, the magazine says.

As interest in donor-advised funds has intensified, so, too, has scrutiny of them.

A recent report from the Institute for Policy Studies, a liberal think tank, calls for an “urgent reform” of the philanthropy sector to, among other things, “discourage the warehousing of wealth” in donor-advised funds and private foundations.

A harsher critic of donor-advised funds is Ray Madoff, a law professor at Boston College and director of a philanthropy think tank at the college’s law school.

“As donor-advised-fund sponsors are becoming America’s biggest charitable entities, concerns about them become ever more consequential,” Madoff wrote in The Chronicle of Philanthropy. “Most troubling is that there is no evidence that the benefits from these funds are going to the public. Instead, most of the benefits appear to be going to America’s richest people, biggest financial houses and a host of investment advisers across the country.”

Despite the skeptics, donor-advised funds continue to carve out an undeniably bigger piece of the charitable pie. According to a 2016 report from the National Philanthropic Trust:

  • Charitable assets in donor-advised funds increased nearly 12 percent from 2014 to 2015, winding up at $78.64 billion.
  • Contributions to donor-advised funds ticked up 11.4 percent from 2014 to 2015, totaling $22.26 billion.
  • The number of donor-advised accounts rose from 242,390 in 2014 to 269,180 in 2015.

 
In its report, the National Philanthropic Trust predicts further growth of contributions to donor-advised funds, but probably not at the same torrid pace of recent years — a period when growth was fueled by uncertainty about tax policy, anxiety over the political environment and other market conditions.

Accounts for donor-advised funds now outnumber private foundations by 3 to 1, and the National Philanthropic Trust envisions this trend will continue as donors become more knowledgeable about these funds.

Eileen Heisman, CEO of the National Philanthropic Trust, says donor-advised funds “are a dramatically growing philanthropic vehicle and are being woven into the American way of giving.”

“While the motivations for giving have stayed the same for centuries, the methods have evolved,” Heisman adds. “Today’s donors are highly engaged in their giving. Baby boomers and millennials, in particular, want a close connection to their philanthropy and to track their charitable impact. [Donor-advised funds] provide the flexibility and management donors are seeking.”

This article is brought to you by the DMA. Click here to register for Nonprofit Federation Conference, Feb. 22-24, 2017, in Washington, D.C.

Travis LeBlanc, FCC’s top cop, takes ‘fearless’ and ‘bold’ approach

“Fearless” and “bold” are among the words that have been used to describe Travis LeBlanc. They’re traits he’s readily demonstrated as chief of the Bureau of Enforcement at the Federal Communications Commission (FCC).

Since taking the FCC post in March 2014, LeBlanc has gone after the likes of AT&T, ESPN, Marriott, PayPal, T-Mobile, Verizon and Viacom. Under LeBlanc’s watch, the FCC, in conjunction with other federal agencies, garnered more than $365 million in fines, settlements and refunds for consumers during his first year on the job, according to National Journal.

LeBlanc will deliver a keynote speech Feb. 18 at DMA’s Washington Nonprofit Conference.

In a relatively short period, the FCC’s “$365 Million Man,” as National Journal calls LeBlanc, has delighted consumer advocates and riled industry backers.

Among LeBlanc’s most vocal critics are several Republican lawmakers who are questioning the FCC’s recent spate of aggressive enforcement actions and are demanding a federal investigation into the FCC’s enforcement arm. 

On the flip side, LeBlanc does have friends in D.C. They include a pro-consumer group known as Public Knowledge. In June 2015, Public Knowledge applauded the FCC’s $100 million fine against AT&T for misleading consumers about its unlimited data plans.

Harold Feld, senior vice president of Public Knowledge, praises LeBlanc and FCC Chairman Tom Wheeler for working hard “to regain the public trust that the FCC stands with consumers. For too long, carriers have laughed at the FCC’s consumer protection regulations and viewed the occasional fine as a cost of doing business.”

To be sure, it’s not business as usual at the FCC’s enforcement bureau.

What sets LeBlanc apart from his predecessors at the FCC is that he’s not an FCC veteran. Rather, he’s a former prosecutor. Before joining the FCC, LeBlanc was a special assistant attorney general in California; in that role, he oversaw legal action involving sectors including telecom, cybersecurity and intellectual property. He set up California’s first units dealing with high-tech crime and privacy enforcement. In California, he pressured Google, Apple, Facebook and other tech giants to agree to privacy standards for mobile apps, National Journal says.

Given his prosecutorial chops, National Journal notes that LeBlanc “has little interest in playing nice” at the FCC.

“He is a savvy prosecutor who also knows how to secure agreements with private companies in order to advance the public mission,” says Wheeler, the FCC chairman.

LeBlanc’s arrival at the FCC represents a return to Washington, D.C. Before heading to California, he was an executive-branch attorney at the U.S. Justice Department. The Justice Department gig followed stints at D.C. law firm Williams & Connolly LLP and San Francisco law firm Keker & Van Nest, where his specialties included white-collar criminal defense and complex civil litigation. He also had been an appellate lawyer representative at the U.S. Court of Appeals for the Ninth Circuit.

LeBlanc’s academic background is equally impressive as his professional career. He holds degrees from Princeton University, Harvard University and the University of Cambridge.

This article is brought to you by the DMA. Nonprofit Federation Conference takes place Feb. 18-19, 2016, in Washington, D.C.