Zimmerman Lehman : "The Importance of Individual Giving"

The Importance of Individual Giving: Individual Contributions Totaled Over $181 Billion In 2003*

*Please note recent updated amounts

Private gifts to nonprofits (from foundations, corporations, religious grantors and individuals) totaled over $240 billion in 2003, according to the recently released study Giving USA 2004. The bulk of this giving- 83.5% or $200.96 billion- was by individuals (alive and deceased- as through bequests). Foundations and corporations combined gave only 16.5% or $39.76 billion (see the accompanying chart for details). Zimmerman Lehman vehemently believes that INDVIDUAL SOLICITATIONS ARE CRICITAL to every nonprofit organization intent on doing effective fundraising.

Although it is certainly important to pursue grants from institutional sources (foundations, businesses, religious philanthropies, and government agencies), you must understand that, in the world of philanthropy, grants are considered "soft money." That is, grants are almost always time-limited and are subject to political winds and the idiosyncrasies of grantor board members.

On the other hand, an individual donor who believes in your cause and who has been properly cultivated will see your organization through thick and thin. Year after year, the American Association of Fundraising Counsel's statistics (again, see chart below) on private giving to charities in the United States reveal that between 80 and 90 percent of these gifts-amounting to hundreds of billions of dollars annually-come from individuals. Any organization that thinks it can float on grants is tragically mistaken; the huge majority of private philanthropic contributions come from individuals.

WHY IS THIS SO CRITICAL? If your organization conducts a mail campaign, asks for gifts by phone, or sells tickets to a special event, the income derived from these efforts can be used in any fashion you deem appropriate (as opposed, say, to a grant from a foundation, which is usually given for a specific project). The nicest money to raise, obviously, is unrestricted money. Nonprofits often, for example, have difficulty finding funds to hire development staff. A sufficient pool of unrestricted funds enables an organization to hire competent fundraisers.

If an individual gives your organization a contribution, and if you cultivate that person with intelligence, respect, and imagination, there is every reason to expect more and larger gifts from that person in the future. This potential rarely exists with grants, and foundations often want to know where you will get your funding from when the grant runs out.

Many organizations put off starting individual solicitation programs because they do not offer a "quick fix" of big money. You may very well lose money on your first efforts to solicit individuals. The organization, however, that understands fundraising realizes that effective individual solicitation depends upon creating a system for the long haul. Successful solicitation of a contribution via a mail campaign opens the way for inviting the donor to a special event, and his or her enjoyment of the special event opens the way for a major or planned gift in the future. If you haven't already started a successful individual campaign there is no better time than right now! Couldn't your organization use some of those billions given away each year?

The following chart may be found at http://www.aafrc.org/bysourceof66.html

2003 CONTRIBUTTIONS:
$240.72 BILLION BY SOURCE OF CONTRIBUTIONS
Individuals: $179.36 billion; 74.5%
Bequests: $21.60 billion; 9.0%
Foundations: 26.30 billion; 10.9%
Corporations: $13.46 billion; 5.6%

* This article was written in 2004. Here are the reported amounts for 2007: A total of $306 billion was contributed to nonprofits in 2007. Individuals gave 75% or $229 billion. Another 7.5 % or $23 billion was donated through bequests for a total of 82.5% or $252 billion by individuals. Foundations gave 12.5% or $38.5 billion and corporations gave 5% or $16 billion.

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