Philanthropy center busting assumptions: Institute's research shows there's still much to learn

June 18, 2007

The Center on Philanthropy at Indiana University plans to share more of its prolific research through two new courses to be tested this fall in Indianapolis, and launched here and elsewhere next spring.

Both new courses, including one on the dynamics of women's giving, could be a gold mine for perpetually prospecting not-for-profits-and for wealth advisers and wealth managers.

"We're hoping there could be some niches we can carve out in this area. There's a great thirst for knowledge," said Eugene R. Tempel, executive director of the center based at IUPUI.

The center's Women's Philanthropy Institute found, among other things, that women who participate in donor education programs are more likely to make larger gifts. They also tend to attach fewer restrictions to their gifts and often develop a long-term giving plan.

Because women tend to live longer than their spouses, they will command much of the $41 trillion that passes between generations over the next 50 years, according to the center.

Also being piloted this fall will be a course tailored to new CEOs of not-forprofits. Some of these leaders come from in-house but lack the management expertise and vision needed to guide the broader organization.

Others come from private industry. They're deer in the headlights when it comes to fund raising and the neverending challenge of scraping to cover costs of overhead.

Both courses will be offered in Indianapolis three times in 2008, plus the pilot courses offered this fall. They'll also be offered on a contract basis with organizations around the nation, starting next year.

In addition to courses offered to IU students, the center trains more than 7,500 CEOs, fund-raisers and volunteers each year. It's even provided training for employees of the prominent Pennsylvania-based Annenberg Foundation, which awarded $2.8 billion in grants to not-for-profits over the last 15 years.

Given that philanthropy is one of the world's oldest professions, a center the likes of IU's might appear suspect to some-a place where academics and burned-out not-for-profit executives frolic in grant money and compile mindnumbing reports of little real-world value to cash-strapped not-for-profits just trying to keep the lights on.

Not to Bill Stanczykiewicz, president of the Indiana Youth Institute, who says the center's expertise has "improved tremendously" its fund-raising skills and has provided training at reduced cost for other youth-serving groups statewide.

"The fund-raising school is indispensable to the nonprofit sector here in the state as is the training that they provide on a wide range of skills associated with fund raising," Stanczykiewicz said. "The center is sought by not-for-profit leaders around the world to provide information and training."

On this particular morning, Tempel had just met with three people from a Japanese not-for-profit who wanted help on how to best organize a capital campaign.

Surprising finds

Some assumptions about what works best in areas like fund raising are surprisingly off the mark, research by the center's full-time staff of 45 has found.

For example, many organizations seek as fund-raisers those most gregarious, with the best relationship skills.

"But [they] have to be very competent managers" as well. "Some of the best fund-raisers I know are not people you would think are the best fund-raisers," said Tempel, who looks like a bespectacled and balding version of the late Admiral Hyman Rickover, father of the nuclear Navy.

He sits at a desk sporting line charts. One is the center's Philanthropic Giving Index, which measures the attitudes of the giving climate twice a year.

The atmosphere for not-for-profits has been difficult. At one recent training session at IUPUI, a not-for-profit employee complained that phone-solicitation income has plummeted with the growth of caller ID, for example.

Donors also have more charitable causes to choose among. According to the center, the number of 501(c)3 organizations in the United States has soared to just over 1 million in 2005 from 626,225 a decade earlier.

One factor that might have helped, despite the rise, is that many not-for-profits have become more specialized-and so might be more inclined to give to specific causes that would appear to provide the most bang for the donor's buck.

At the same time, donors more than ever want to see measurable impact, Tempel said. It's the charity vs. philanthropy tension. While charity has come to denote short-term work, people talk about philanthropy as getting to the root of a problem. "There's just a lot more concern today about the outcome or impact of your work," he said.

Expensive research

One problem has been assessing that impact over the long haul-an expensive and often difficult task. The IU center's signature research is the Center on Philanthropy Panel Study, or COPPS. The work done in partnership with the University of Michigan's Institute for Social Research panel study of income dynamics follows the same 5,000 families' philanthropic behavior over several years. It's believed to be the only such survey of giving and volunteering in the United States, though it's costly-at about $565,000 every two years.

According to the IU center, the data have value to not-for-profits in many ways, such as in helping gear their solicitation efforts to certain donor types and to predict the effect changes in the economy or public policy can have on giving.

For example, giving patterns tend to mesh with one's life cycle, with peak giving between ages 40 and 65. And children of parents who give a lot to their churches or synagogues tend also to put a lot in the collection plate.

The Center on Philanthropy also has conducted numerous other studies of interest over the last 20 years, including, for Bank of America, the Study of High Net Worth Philanthropy along with, more recently, one eye-opener on foundation donors' willingness to pay for overhead.

It found that about two-thirds of not-forprofits surveyed said they lack adequate funding for overhead costs and that about the same percentage don't rely on foundations to pay for those core operations.

One reason is because not-for-profits expressed frustration about typically short-term financial support from foundations, such that they were reluctant to ask them to also pay for infrastructure needs. Yet Tempel said the work showed the need for better communication, that not-forprofits should explore the willingness of foundations to fund administrative costs.

"It shed light on an issue everyone thought was pretty much cut and dried."
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