November 2009 Archives

The Size of Charitable Giving

As the holidays approach, charities/non-profits nervously wait;  Will you be giving this year and how much?  The economic down turn, not surprisingly, has impacted our ability to donate to our favorite charitable causes.  Perhaps because it is the "season to be giving" and perhaps because we contemplate our tax deductions, December accounts for ~30% of our charitable giving (most of it on December 31!).  December is the make-or-break month for many non-profits.

Which got me thinking:  How much do we give?  I've been digging around for some numbers.  Here's some rough estimates.  They are huge!  Or in some cases surprisingly small.  (Someone, please correct me if I am wrong)

We give $300 billion a year (That's B as in BILLION).  Of this, approximately $100B come from big donations (say over $500K).  $100B goes to religious organizations.  And $100B are made in the amounts of a few dollars to a few thousand.  So, there are a lot of small donors out there.

Donations are only 23% "efficient."  Only  23 cents on every dollar donated actually make it to program services.  Give a buck, only 23 cents make it to your cause.  Wow.  This seems pretty inefficient.

Only 7% of donations are made on line.  Seems to me charitable giving is going to go the way of airline ticket sales, consumer banking, and searches for local businesses -- it will be mostly online.  We have a way to go.  This, I think will address some of the efficiency issues. raised $10 million in the past two years.  Causes is a great organization and forward thinking.  It's a superb example of how facebook and social networks can be used.  But, on execution -- $10MM seems just to be the tip of the iceberg.

NightwatchLogo.gifMy favorite charity is Operation Nightwatch.  (Disclousure:  My cousin is an employee there)  It is a small organization doing lots of good to help the homeless in Seattle.   How do organizations such as Operation efficiently raise contributions and "compete" with the big charities with "large" marketing budgets?

My interest in charitable giving on the small has been piqued.  How can we give more, maybe in small amounts, but at large efficiency?  If you are interested in helping me figure this out, leave me a comment.