Charitable Organizations Industry Trends

Charities Seek Ethnic Diversity

The Joint Affinity Groups, a national coalition of grantmaker associations, says that lack of diversity on the staffs and boards of charitable organizations may impede the industry's ability to respond effectively to the needs of minority communities.

Purchased Fundraising Lists

Letter, email, and telephone fundraising campaigns increasingly rely on donor lists bought from other organizations. Large national nonprofits often sell access to their donor lists to smaller nonprofits. Brokers and list managers have become sophisticated at building lists that target potential donors according to desirable demographic characteristics.

Public Confidence Declining

Misbehavior by some nonprofits in recent years has eroded public support. More nonprofits are emphasizing ethics as their way of rebuilding public trust by drawing up stiff codes of conduct and appointing ethics officers. Others are drawing up a donors' bill of rights that assures contributors access to information about its finances. Nonprofits are being encouraged to conduct annual ethics audits, and are beginning to require CEOs to certify their organizations' annual financial statements.

Corporate Donations Highly Cyclical

US corporations that donate are motivated partly by income tax deductions. Charitable contributions from corporations and foundations increase sharply during strong economic periods. Corporate giving has been steady at about 1 percent of pretax corporate income.

Nonprofit Fundraising Costs Vary

Fundraising and administrative costs can vary depending on the nonprofit's size, age, and type. Educational, environmental, artistic, and health nonprofits tend to spend more on fundraising and administrative costs, while public-benefit and other nonprofits tend to spend less. Overall, fundraising and administrative costs average 25 percent of revenue.