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Report -- Big Donors Tend To Give Locally

By The NonProfit Times - April 17, 2013

Big donors haven’t let their big gifts stray far from home for the past decade or so. Donors like to watch them grow up and prosper.

The majority of publicly announced gifts of $1 million or more (60 percent) are from donors who live in the same state or geographic region as the nonprofit or foundation that receives the gift, according to the Indiana University Lilly Family School of Philanthropy in Indianapolis, Ind.

About half of all publicly announced gifts of this size (47 percent of the total number of gifts and 52 percent of the total dollar amount) come from donors living in the same state between 2000 and 2011.

Health, arts, culture and humanities, higher education, foundations and government agencies received more than half of their $1 million-plus gifts from donors in the same state. Approximately two-thirds of $1 million or more gifts to these types of organizations were given by donors in the recipient’s geographic region.

The study and report were sponsored by CCS, a fundraising, consulting and management firm, through their William B. Hanrahan Fellowship at the Lilly Family School of Philanthropy.

The study analyzes data from the Million Dollar List, the Indiana University Lilly Family School of Philanthropy’s comprehensive, searchable online database of publicly reported charitable gifts of $1 million or more to organizations in the United States. The Million Dollar List provides donors, nonprofits, scholars and the public with insights into high-level philanthropy and tools that can inform and enhance their philanthropy. It contains more than 68,000 gifts and is updated on an ongoing basis, according to the school.

Foundations and higher education institutions were the top two recipients of $1 million-plus gifts between 2000 and 2011, with each receiving about one-third of the total dollar value of gifts at this level. The remaining dollars were relatively evenly split among the other types of organizations. No subsector (apart from higher education and foundations) received more than 10 percent of publicly announced $1 million-plus gifts.

“This is good news for nonprofits and the donors who support them,” said Una Osili, Ph.D., director of research at the Indiana University Lilly Family School of Philanthropy. “Contrary to conventional wisdom, organizations of any type can attract million-dollar gifts. Donors at this level are motivated to give to a wide variety of organizations and causes, and the information from this study and the Million Dollar List can help them identify areas that could benefit from their support.”

A small but growing number of million dollar gifts are from donors located outside of the U.S. There has been an increasing trend among some types of nonprofits to seek out high-dollar gifts from these donors. In particular, this approach has been successful for higher education institutions and some internationally focused foundations, according to study results.

Gifts of $1 million or more are sensitive to changes in the economy and in various economic factors, the study found. Publicly announced $1 million-plus gifts fluctuated dramatically in both number and dollar amount throughout the 12-year period studied. Giving at this level to most types of recipient organizations declined from 2001 to 2003, and again from 2008 to 2010 before recovering somewhat in 2011.

In general, publicly announced $1 million-plus gifts to arts, culture, and humanities organizations and to environmental groups shifted the most in response to economic fluctuations, whereas $1 million-plus giving to health and human services organizations shows the least sensitivity to variations in the economy. Million-dollar gifts from individuals were affected more by economic changes than were gifts from foundations and corporations, suggesting that even at this high level of giving, feeling financially secure is an important factor in individual donors’ decisions to give, according to the report’s authors.

Individuals and foundations are the primary sources of publicly announced gifts of $1 million or more. Approximately one-third of such gifts made between 2000 and 2011 — representing half of the total dollar amount of gifts at that level — came from gifts made by individuals during their lifetime. If charitable bequests are included, individuals contributed 40 percent of all such gifts and 65 percent of the total dollar amount. Foundations, on the other hand, made 43 percent of $1 million-plus gifts, accounting for 25 percent of the total dollar value.

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