Good News for Tough Times

by Laura Huth, President & CEO, do good Consulting

In June, the Giving USA Foundation, through its annual yearbook on philanthropy called Giving USA, released updated statistics for charitable giving in the U.S.

I’m not one big on statistics – I’d much rather hear or tell a story. But these numbers and trends are compelling, so I want to share them with you.

There is much talk these days about the recession. People are struggling and making different choices regarding fuel and transportation, housing, food, and luxury items.

But one area of spending has to date largely escaped the downward pull of the recession: charitable giving.

For non-profits focused on grassroots giving and individual donors, the news is heartening: an area donors seem to not be skimping on is donations.

In 2007, the time period monitored by the Giving USA report, total giving by individuals, corporations, and foundations for the first time rose about the $300 billion mark to a record $306.4 billion. Donations from individuals rose to nearly 75% of the total to $229 billion, an increase of 2.7% from last year (not adjusting for inflation). Include donations from individuals given through bequests, and this figure jumps to 88%, or $252 billion.

And, every type of public charity receiving donations saw gains in 2007: arts/humanities; education; environment; health; human services; international affairs; and religion.

Del Martin, chair of the Giving USA Foundation, summed up the report saying, “What you can’t forget is that the ‘little guys’ – the families most affected by the economy – kept on giving despite any worries they might have had about their personal situations.”

Of course, this still means that people are paying bills first, then considering charitable gifts. But they are making other choices – in transportation, housing, and in other areas to allow them to still do both, and this is heartening.

The report attributes the 2007 increases largely to the strong stock market performance in the first half of the year, overall growth in the economy as measured by gross domestic product, and increases in corporate and personal income as reported at the end of the year.

According to George Ruotolo, chair of the Giving Institute, the report “shows that a strong start to the economy in 2007 helped lift giving despite worries at year's end from gasoline prices or the housing and mortgage crisis."

Now, the report’s numbers are from 2007 and the so-called recession has continued downward into 2008. But as we moved into the recession in 2007 with forecasts abounding about tighter times, people’s giving changed – for the better. Always the optimist, I am hoping that this trend continues right through 2008 to benefit our country’s charitable causes.

So what do these statistics mean for your non-profit? Proceed with a degree of caution, but also a healthy dose of optimism.

When economic times get a little tougher, it’s heartening to learn that we turn to carpooling, bulk food purchases, and smaller TVs. But our commitment to helping others in tight times is not one of the things those in the U.S. consider “luxuries,” but essentials. Giving is still strong; people still care. That’s good news for tough times.

To view the 2008 Charitable Giving pie chart, click here.

Internet Organizing: Surfing With the Times

Okay, so I confess that it wasn’t until about a year and a half ago, and under extreme duress, that I finally opened a My-Space account. I still feel a bit silly sometimes for having it. Last week I absolutely forced myself to open a Facebook account, but I have yet to post a profile picture. And the other day I received an invitation from a colleague to become a part of her professional network at LinkedIn.

“What is all of this, and why am I involved!?” the critic in me says.

And then the organizer in me explains that these networks are a creative and fun part of an enormous trend toward using web tools for organizing.

Take the Obama campaign, for example. His campaign has done some phenomenal things on-line, and folks can rate him as their #1 My-Space friend if they’d like to.

All types of people and social movements are riding this wave. We should too, because the younger generation is constantly tapped into these sources, and that’s the generation we most need to educate and motivate on our issues. Long-term change cannot be achieved without always funneling in new minds to the movement.

Although it is true that internet networking is a huge hit, a way of life, with the younger crowd, it’s a misconception that only the younger generation is using these tools. Many people in other generations are recognizing the importance of the internet’s place in social communications. (For related information, see the Q&A column from July 2008’s Doing Good.)

Other low-cost ways in which computer technology is being used in community organizing includes setting up blog sites; placing Google ads to get attention; and converting member and activist sound bites into MP3s that can be later used on an organization’s website, used for presentations, or even sent to legislators.

do good highly recommends exploring this resource area if your organization hasn’t already done so. You may be excited and inspired by what you find!

Q&A: Politics and Non-Profits: What's Permitted?

Dear do good,

As election season heats up, I find myself thinking about politics. To effectively attain my non-profit’s mission of affordable health care, I think it’s important to get involved in advocacy and help shape public policy. I know there are laws governing such things for groups deemed 501(c)(3) and would like to know what we can and can’t do as November approaches.
- Seeking to Change the World, Chicago

Dear Changing the World,
As a 501(c)(3) organization, your activities must be almost entirely educational, charitable, or scientific. Your tax designation exempts your group from most federal taxes and contributions to your organization are tax deductible. These advantages mean that lobbying and other activities are limited by federal law. However, all 501(c)(3) organizations are permitted to engage in advocacy activities to at least some degree.

Here is the deal on lobbying. First, let me define lobbying. There are two kinds of lobbying, direct and grassroots. According to the book, Organizing for Social Change:

• Direct lobbying “occurs when a representative of the organization communicates the organization’s view on a specific piece of legislation to an official. It is also direct lobbying to urge the public to support or oppose an initiative, referendum, or other ballot measure.”
• Grassroots lobbying “occurs when the organization urges the general public to communicate the organization’s position on a piece of specific legislation to these officials.”

Depending on the size of your organization, one of two sets of rules apply to lobbying:

1. 501(h) Expenditure Test – Using this test, non-profits can spend up to 20% of their budget on lobbying, and one quarter of that total on grassroots lobbying. Organizations that use this test can not spend over $1 million on lobbying.
2. Insubstantial Part Test – This test offers a vague definition of what is considered lobbying. Commentators suggest that a 501(c)(3) using this test is safe if they limit lobbying to 5% of the organization’s activities (using time, financial, and other metrics).

Unless your organization acts, the “Insubstantial Part Test” will be used to measure your lobbying activities. To have the “501(h) Test” apply to your organization, you must apply using Internal Revenue Service Form 5768 (this is an extremely easy-to-complete tax form). Some non-profits (namely religious institutions) are not allowed to choose the 501(h) option, and must do any lobbying under the Insubstantial Part Test.

When it comes to elections, 501(c)(3)s are very restricted. Such organizations can engage in non-partisan voter education and voter participation activities (i.e., voter registration), but are prohibited from activities that tend to support or oppose a candidate for public office.

While there are limits on lobbying and elections, there are many other ways to make important changes that are not restricted. 501(c)(3) organizations are allowed to:

• Bring a lawsuit
• Encourage an administrative agency to create or change an administrative rule
• Advocate before special purpose boards (such as school boards or zoning boards)
• Distribute “non-partisan analysis” on a legislative proposal (as long as it allows the reader to make up his/her mind about the proposal)
• Respond to a written request for assistance from a legislative committee

In short, 501(c)(3) organizations can get involved in public policy on a limited basis. It is best to stick with the issues that are close to your mission, and make sure you keep track of the amounts you spend on lobbying.

And, remember: as a private citizen you are allowed to participate in any political activity you would like.

So, go ahead, change the world. Just play by the rules and you can make a huge difference for your members, your organization, your community, and beyond!

For more information, check out the book Organizing for Social Change, by the Midwest Academy or IRS publication 557 (lobbying information begins on page 44).

- Jennifer Knapp, Special Projects Coordinator, do good Consulting

Have a question for do good Consulting's non-profit experts? Submit your questions to dogood@dogoodconsulting.org.

Group Profile: Central Illinois Community Blood Center

What better gift to give than the gift of life? Thousands of people across central Illinois have literally given a part of themselves to save the lives of others through blood donations. Blood donors could save the lives of people you love, work with, or socialize with in your community.

The Central Illinois Community Blood Center (CICBC) gives that gift to those in need with the generous donations of individuals in the region. The center serves its communities by providing life-saving blood used in surgeries, traumas, cancer treatments, and treatment of a wide variety of diseases.

This blood is much-needed. In fact, in the center’s service area, blood use is up 8%, while donations are on the decline.

The CICBC is a non-profit organization formed in 1971 by St. John’s Hospital and Memorial Medical Center in Springfield, Illinois, and now provides the blood needs of 19 hospitals in central and southwestern Illinois. In addition to hosting blood collections and Bloodmobile drives, the center also conducts public awareness and education programs regarding the importance of blood donations. Through its work the center saves the lives of thousands of citizens each year.

According to chief executive officer David Parsons, the organization is always asking how it can give back to the community in other ways too.

One way the organization does so is through its High School Challenge. Blood donations are made by students in the name of their particular high schools, which are divided into categories of small, medium, and large schools. Springfield Clinic then partners with the CICBC to offer three $1,000 need-based scholarships, one to a winner in each category. Memorial Hospital in Belleville, Illinois, does the same in its region.

The center also sponsors an annual high school golf clinic, recently held in conjunction with the LPGA golf tournament in Springfield. Parsons believes that this clinic helps to foster future leaders and volunteers for the community. CICBC’s hope is that these future leaders will donate blood at their high school, organize blood drives, or become interested in the health field.

Donating blood is safe and easy. You must be 17 years old (16 with a signed parental consent form), weigh at least 110 pounds, and be in good health. If you are eligible, call 217-753-1530 or see www.cicbc.org.

Want to see your favorite non-profit group profiled in an upcoming issue of Doing Good? Contact do good at 217-778-1687 or dogood@dogoodconsulting.org.