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Giving to Top Charities Rose Nearly 3.7% in 2020, Driven by Big Gifts From the Wealthy

Posted: 11/8/2021

Click here to read on The Chronicle of Philanthropy.

By Emily Haynes and Michael Theis

In a year beset with a public-health emergency, social unrest, natural disasters, and political upheaval, United Way Worldwide, the Salvation Army, and St. Jude Children's Hospital won more donations than any other nonprofits.

Those three charities topped the Chronicle's America's Favorite Charities ranking of organizations that raise the most in cash and stock contributions from individuals, foundations, and corporations. Roughly $1 out of every $11 donated in 2020 went to the 100 nonprofits on this list. Aggregate support for those charities grew modestly, rising nearly 3.7 percent. Adjusted for inflation, those groups raised 2.7 percent more than in 2019.

Some nonprofits that provide health care and basic needs saw big jumps in cash support. The Salvation Army (No. 2) raised nearly 31 percent more in 2020 than in 2019, and the Leukemia & Lymphoma Society (No. 48) chalked up a nearly 15 percent increase. International aid group Samaritan's Purse (No. 23) raised nearly 38 percent more, while Doctors Without Borders USA (No. 30) attracted almost 30 percent more in gifts.

Still, pandemic disruptions resulted in declines for many groups: The American Cancer Society (No. 36) raised roughly 20 percent less in 2020, and Catholic Relief Services (No. 49) saw support slip by more than 13 percent.

Feeding America (No. 33), the national network of over 200 food banks, saw more growth than any other charity on our ranking. The group raised over $515 million last year, more than three-and-a-half times what it brought in in 2019. Over the past two years, Feeding America raised $217 million from new donors who contributed $1 million or more in their first gift to the charity.

One of those donors was MacKenzie Scott, the novelist and former wife of Amazon founder Jeff Bezos, who gave $20 million to Feeding America and made additional gifts to 42 of its local or regional branches.

"We are in a fortunate position to have such an influx of donors, but the need is enormous," says Casey Marsh, chief development officer at Feeding America. "The cameras have started to go away from the food-bank lines, but the lines haven't gone away. It's so incredibly important that people stick with us."

Small nonprofits have fared much differently during the pandemic. According to one national survey, four in 10 small nonprofits faced revenue declines in 2020.

But donors didn't just parcel out their dollars to working nonprofits last year. They also continued to pour money into donor-advised funds, the charitable giving accounts housed at commercial banks, community foundations, and other charities. Donors receive a tax deduction when they contribute to their fund. They can then make charitable gifts from that account over time.

With a booming stock market, many donors chose to give to donor-advised funds last year. Together the five biggest donor-advised fund sponsors received $24.4 billion, slightly more than the top 23 charities on our list, which brought in $24 billion combined.

Fidelity Charitable alone took in more than $10.7 billion last year, nearly triple the $3.5 billion United Way Worldwide (No. 1) raised and nearly six times the $1.8 billion raised by the Salvation Army (No. 2).

The wealthiest donors drove giving last year. Their six-, seven-, and eight-figure gifts helped stave off the worst effects of the economic downturn. Some charities capitalized on those donors' willingness to give big by launching major fundraising campaigns. Grant makers and wealthy donors also made headlines by loosening or lifting restrictions on how charities could use the dollars they gave.

The share of Americans who give has been declining for decades, even as total giving continues to increase. But the pandemic deepened charities' reliance on donors who can make the biggest gifts, says Eric Javier, managing director at the consulting firm CCS Fundraising.

"If the market stays high and full employment lags, I would predict that this trend will continue: Charities will depend on the wealthiest donors," he wrote in an email. "These donors have both the financial capacity and psychological comfort to consider major gifts."

Big Gifts Get Bigger

Doctors Without Borders has zeroed in on gifts of $1 million or more as a critical revenue source. The coronavirus pandemic exponentially expanded the need for its health care programs. The organization had to quickly react to new health needs in the more than 70 countries where it works. It also opened new operations throughout Europe and in the United States to assist overloaded hospitals.

In February, it decided to rethink how it approaches people who can make big gifts. It used to take the same approach with everyone who gave more than $5,000 over three years. Now it is focusing on those donors who gave $25,000 or more over two years, with the goal of attracting bigger sums altogether.

To do that, fundraisers who used to divide their attention among 600 to 800 supporters each, are now assigned to focus on just 200 big donors. The charity is hiring more fundraisers to help reach more midlevel donors who might eventually be able to make big gifts.

The fundraising team took this step after a donor who had flown under the radar made a large unexpected gift in February 2021, says Kim Goldsmith-N'Diaye, director of development. About six years ago, this donor began contributing $100 a year to Doctors Without Borders. She increased the contribution to $1,000 a year and upped it to $500,000 in 2020. The real windfall came this year, when she made a $9.3 million gift of Tesla stock.

"We had not engaged with this person to find out who she was as a donor, what her interests were, where she wanted to go with it," Goldsmith-N'Diaye says.

Her team got lucky, she says. "It was an incredible gift, but we should not have been surprised; we should be fully engaged with our donors."

Some large nonprofits are not only raising the baseline for major gifts but also refocusing on winning bigger, transformational donations. Fundraisers at the Nature Conservancy (No. 20) have set their sights on securing contributions of $5 million or more — way above its major-gift threshold of $100,000.

To keep up with species and habitat loss on a warming planet, the charity has to make big conservation investments. "In order to really hit the goals that we want to hit, we want to be able to raise $150 million a year in $25 million-plus gifts," says Tom Neises, chief development officer at the Nature Conservancy.

Some charities running campaigns struggled to identify potential donors because in-person events were canceled by Covid.

The charity is still far from achieving that goal, but Neises says thinking big is essential to continuing the organization's roughly 10-year trend of growing 6 percent a year. Last year, the group increased its cash support nearly 26 percent. "We won't be able to maintain that simply through our other revenue streams" — corporate support, foundation grants, and small and midlevel gifts, he says.

An influx of big gifts was common for nonprofits across our ranking, but in some cases, it wasn't enough to stave off an overall decline in donations. Cash giving to the YMCA of the USA (No. 63) fell more than 3 percent in 2020, despite an outpouring of support from major donors, including MacKenzie Scott, who contributed to the national office in addition to 43 local YMCAs.

Most support for the Y's central office comes from foundations and corporations, and Rebecca Bowen, chief advancement officer at the national office, attributes the overall giving decline to the timing of big grant or gift renewals. But the increase in individual giving was notable last year, she says. "We were pulling in funding from high-net-worth individuals to a degree we rarely see here."

Shift in Fundraising Culture

United Way Worldwide, which tops our list this year, was once defined by its workplace-giving campaigns, which raise recurring, modest contributions from everyday people. But workplace giving has been declining for years. In 2020, the number of workplace campaigns fell 15 percent. Among the affiliates that canceled or suspended those drives last year, 40 percent blamed the shift to remote work or layoffs due to the pandemic.

Major gifts of $10,000 and above and "mega gifts" of $100,000 or more helped the organization increase its cash support by more than 3 percent from 2019 to 2020. This is the first time since 2014 that United Way Worldwide raised more year-over-year. Among those were contributions MacKenzie Scott made to 46 United Way affiliates.

Big contributions from other wealthy donors helped, too. A recent survey of 1,626 households whose median wealth was $2 million found that 88 percent of wealthy families made a charitable contribution last year. Those donors primarily supported religious, health, and education nonprofits as well as charities providing basic needs.

An increased reliance on a smaller pool of major donors could represent a cultural shift for United Way Worldwide and its local and regional affiliates.

"United Way likes to think of ourselves as democratizing philanthropy," says Tolli Love, chief investor relations officer at United Way Worldwide. "To have fewer people deciding where the philanthropic resources go, it's a danger or a risk that could possibly leave everyday community supporters disenfranchised."

United Way fundraisers are trying to address this disparity by creating more volunteer opportunities and other ways for supporters to advance the mission even if they can't make a big gift.

Lots of Campaigns

Major fundraising drives, such as capital and comprehensive campaigns, are having a moment. Many of the campaigns are at colleges and universities. This year's top 100 ranking includes 41 colleges and universities. As a group, donations to those institutions fell just over 3 percent from 2019 to 2020, but the full picture of higher-education fundraising is uneven. Together the public colleges and universities in our ranking saw a 7.7 percent increase in cash support in 2020, while private colleges and universities saw gift revenue decline 9.5 percent year over year.

While in aggregate, the 19 private colleges in our ranking saw a decline in cash support, those figures are heavily skewed by Michael Bloomberg's $1.8 billion gift to Johns Hopkins University (No. 4) in 2019. Excluding that gift, private college fundraising increased by 7.1 percent. Nine private colleges saw increases while 10 saw decreases. And even institutions that posted declines did better than most other groups on the list.

The University of Wisconsin at Madison (No. 80) is one of the universities that adjusted its campaign schedule because of the pandemic, pushing its end date back a year. The $3.2 billion comprehensive campaign began in 2015 and is now in its last year.

Although the pandemic inspired fundraisers at the Wisconsin Foundation & Alumni Association to extend the campaign, it didn't freeze giving the way fundraisers feared.

"Our team was very successful in closing major and principal gifts," says Alisa Robertson, chief advancement officer at the foundation. But the challenge, she added, was finding new donors who would give big.

The pandemic prevented the usual in-person gatherings that go along with a campaign. Without opportunities to connect with potential new donors face-to-face, fundraisers struggled to identify them. What's more, fundraisers stopped appeals to annual-fund donors for the latter half of 2020 as racial-justice protests swept the country. The pause made it more challenging for fundraisers to find new major donors among annual-fund supporters.

But once again, major gifts saved the day. The Madison campus has raised more than $4 billion, exceeding its goal. Robertson and her team are already in the quiet phase of planning the university's next campaign, to fund diversity, equity, and inclusion efforts.

Karin George, managing principal at Washburn & McGoldrick, says the education fundraising firm has been overwhelmed by the number of clients kicking off campaigns or beginning the campaign planning process.

"There's the thought that once you say you're in a campaign, that means all of this philanthropy will come your way," George says.

But those gifts won't come automatically, she cautions. Even with wealthy donors able to make big gifts, fundraisers still need to do their due diligence to make a solid case for support.

Colleges and universities aren't the only groups that have had success running campaigns. International aid charity CARE USA (No. 55) launched its comprehensive fundraising campaign just as coronavirus lockdowns began. The drive was initially planned to raise $75 million in honor of the charity's 75th anniversary, but fundraisers quickly transformed it into a campaign to raise $100 million for Covid relief efforts by December 2021.

The campaign helped the fundraising team stay focused during a year of flash points, says Mary Anne Ericson, director of the crisis response campaign at CARE. The charity exceeded its campaign goal in late June, thanks to a rush of donations in support of its public-health work in India, which at the time was enduring a ravaging wave of the Delta variant.

Rather than wind down six months early, CARE stepped up its goal, aiming to raise an additional $50 million. "The need has only increased globally," Ericson says.

Return to Status Quo

The pandemic inspired high-profile examples of unrestricted gifts from foundations and individuals like MacKenzie Scott, who waived restrictions on how their gifts could be used as nonprofits faced a raft of new financial challenges.

"We're seeing a lot of donors ? especially on the larger gift side, like the high seven-figure, even eight-figure donors ? are much more open to unrestricted than ever before," says Mark Weir, chief development officer at the American Civil Liberties Union (No. 70). "It's definitely a huge change."

To date, however, donors' increasing openness to making unrestricted gifts to the ACLU has not translated into an avalanche of no-strings-attached contributions. Weir says his in-house fundraising data shows that the charity received a higher share of loosely restricted major gifts than unrestricted contributions in the 2021 financial year. "We're seeing a trend of donors still wanting to restrict their gifts, but less specifically," Weir says. More donors were giving to support broad objectives, such as voting rights or racial justice, rather than general operating support or specific programs.

In 2020, individual donors to the YMCA (No. 63) went above and beyond their usual program support, making unrestricted gifts directly to the charity's national office. Bowen, its chief advancement officer, credits some big unprompted gifts to national media coverage of YMCAs across the country meeting community needs. A large one, for example, came in after NPR ran a story on the YMCA that featured a photo of kids in a child-care program pretending to be airplanes to stay socially distanced.

"The adviser who called said, 'My donor saw that picture,'" Bowen says.

Already, though, some organizations are returning to the pre-pandemic status quo. At the YMCA of the USA, for example, every grant maker that waived limits on how the charity could use its contributions in 2020 gave again in 2021 — but all of the gifts were once again restricted.

The pandemic has given donors time to think about what's important. One fundraiser says that's led some to give more and others to give less.

A recent study by Candid and the Center for Disaster Philanthropy estimated that just 39 percent of gifts made from the start of the public-health emergency to January 20, 2021, were unrestricted. That share drops to a mere 9 percent when MacKenzie Scott's $4.2 billion giving spree is excluded.

Dale Bannon, national community relations and development secretary at the Salvation Army (No. 2), expects the general operating support some donors gave in 2020 was just a blip, motivated by the extraordinary circumstances of a global pandemic.

"During a national crisis, such as the pandemic, donors are definitely more open to unrestricted general giving because they know the need is so great," he says. "I do believe major giving and foundations certainly will return at some point to outcomes-based and restricted giving."

What Comes Next

As nonprofits that received a windfall in 2020 look ahead, they're trying to figure out how to keep new donors in the fold as a way to build on last year's success.

Feeding America is ramping up its investment in fundraisers who seek big gifts. The organization created the Feeding America Stewardship Center to put an increased focus on retaining donors. Staff at the center include communications and donor-relationship professionals. The charity created a new vice president position to oversee the center and plans to hire two new directors and two new managers as well. The center will focus on building ties with people who made their first gift — no matter the dollar amount — during the pandemic.

Many of these first-time donors gave in response to the historic need at the start of the pandemic — just as many donors give in response to a devastating hurricane or wildfire, Marsh says. But donors who respond to disasters with cash gifts generally stop giving them once the headlines fade. Feeding America wants to make sure its new pandemic donors don't disappear, she says. "We're very interested in looking at the long run."

But even charities that had banner fundraising years in 2020 are worried that contributions could level off while needs remain high.

"What we fear, like other nonprofits, of course, is donor fatigue," says Bannon at the Salvation Army. He blames a lack of media coverage of the hurricanes, floods, and wildfires for a recent drop in gifts to the charity's emergency disaster services.

The results from the upcoming year-end fundraising campaigns will be a sign for where giving is headed. For now, though, how donors will give is unclear.

"What happens when all the people of this country live inside for a year and a half?" wonders Sara Rubin, vice president of development at Ohio State University (No. 51). "For some people, it stimulated them to focus on what's important in life, and in some cases, that drives philanthropy up, and for other it drives it down."

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