Perhaps Not All News is Bad

It should come as no surprise that donations from America’s most generous donors dropped considerably in 2009.

Since 2000, The Chronicle of Philanthropy has compiled an annual list of America’s most-generous people.  According to the Chronicle, donors on the Philanthropy 50 donated a total of $4.1 billion to nonprofits last year.  An impressive figure, but a drop of nearly 75% when compared to 2008’s total of $15.5 billion.  This year’s total also represents the second lowest year since the newspaper began tracking a decade ago.  For those on the list, the median gift in 2009 was $41.4 million compared to $69.3 million in 2008 and $74.7 million in 2007.

While these figures only confirm that 2009 was a dismal year for nonprofits, the recession may have catalyzed other trends which could ultimately strengthen the sector as a whole.  One of those trends, as noted by the Wall Street Journal, is the fact that a growing number of donors are no longer content to simply write large checks.  They are seeking ways to become more engaged in the process, and they are interested in finding organizations or strategies that can provide measurable returns on issues important to the donors.

The Journal emphasize this point with a quote from Stacy Palmer, the editor of the Chronicle, who stated: “Wealthy Americans increasingly see philanthropy as way to catalyze big changes in society, rather than choosing only to write a check for a new building or to further existing projects…. More and more top donors now put their money, clout and vision into fueling the development of new ideas and shaping future leaders–whether in education, business ethics, economics or climate change.”

Another interesting trend was also highlighted by the Journal in an article posted at the beginning of the month.  The author recounts how the recession has forced a number of nonprofits to close and more significantly, it has catalyzed the merger of others.  While not always an easy process, these mergers have resulted in cost savings and higher returns for a number of organizations.

These themes of mergers and greater collaboration among nonprofits is also finding a foothold among donors.  As noted in the article, funders like the the Lodestar Foundation, started by Arizona entrepreneur Jerry Hirsch, now awards a $250,000 annual collaboration prize to encourage nonprofits to increase efficiency and eliminate duplication by joining together. This spring, world leaders and philanthropists will meet at Oxford University for former eBay President Jeff Skoll’s annual forum on social entrepreneurship with the theme being: “Catalysing Collaboration for Large-Scale Change.”

In my perspective, these two trends are important to identifying new solutions to timeless social problems as well as increasing the efficiency of a sector not always know for effectiveness. While 2009 will definitely go down in the philanthopric record books for being a terrible year, perhaps it did not bring only bad news.

-Christopher Lindsay

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