Nonprofit News Weekly Rundown Episode 8

Every Monday I publish a short video that highlights the news, trends, research, and stories from across the nonprofit industry. While video might be the way I like to consume content, I also realize that some folks out there might want to read an article or listen to a podcast. For the audiophiles, you can find these episodes wherever you listen to podcasts including Spotify, Apple Podcast, and Google.

If you are more interested in reading relevant news from our industry, I will be posting a blog every Monday summarizing the video contents here on LinkedIn. For this week’s news, we take a look at how small nonprofits are faring in 2020, examine the role of AI in Fundraising, and highlight a group of philanthropists looking to reform charitable giving laws. As always, we will finish the episode with some good news from our industry.

Small Nonprofits Struggling in 2020

DonorPerfect recently released their 2020 Fundraising Benchmarks Report that highlighted the struggles that all nonprofits are having this year in raising funds for their missions. Specifically, the report calls out that “small nonprofits have experienced a significant drop in giving (-18% in the most recent 3-month period) as a result of the pandemic”. The report also draws attention to organizations whose missions aren’t directly aligned to Covid19 relief as also struggling more than others. Arts and Cultural organizations seeing the largest decrease in funding over the past three months with a drop of more than 29% year over year.

AI for Fundraising Report

A new survey conducted by the AI in Advancement Advisory Council (organized by Gravyty) reported that 82% of fundraising leaders believe that AI will be part of the solution to the challenges that organizations are facing from the pandemic. The council interviewed more than 300 fundraising leaders which provided a view into thinking on AI for advancement teams. Some of the most interesting statistics to come out of the study are as follows.

• 73% of fundraising teams currently have hiring freezes
• Over 80% of respondents see AI as a tool to help identify new donors
• 62% of those surveyed expect AI to take over for human fundraisers in some capacity in the future
• Concern over algorithm bias is top of mind

The Push for Reform in Charitable Giving

Barrons.com recently published a great article on an organization called the Initiative to Accelerate Charitable Giving that is looking to get congress to reform the outdated laws governing charitable giving. Given the crisis that so many communities are in with the pandemic, this group is urging foundations and Donor Advised Funds (DAF’s) to open their wallets and distribute some of the 1 Trillion dollars sitting in accounts. The organization has some really interesting ideas about how to get this money into the hands of charitable organizations.

“This coalition is asking Congress and the incoming presidential administration of Joseph Biden, for “emergency charitable stimulus” legislation to require private foundations to boost their annual payout rate to 10%, and to require a mandatory payout rate of 10% for DAFs, for three years, specifically to facilitate more dollars reaching charities hit by the Covid-19 crisis. According to the Independent Sector, an organization that supports the nonprofit sector, 7% of nonprofits in the U.S. are expected to close because of the pandemic.

The agenda for the Initiative to Accelerate Charitable Giving, which is still in the phase of reaching out to more supporters, is to push for long-lasting policy reforms. Among these would be a “non-itemizer” tax benefit, to encourage anyone who files taxes to give to charity. They also are proposing tax incentives that would encourage private foundations to distribute more of their assets, including an exemption from excise taxes for foundations that payout at least 7% of their assets in a given year.

The group also believes Congress should ensure that private foundations can’t meet their payout obligations by transferring funds to a DAF, or by paying family member salaries (which is currently allowed by law).

For DAFs, the group is recommending that all funds in these vehicles are distributed within 15 years. They are also recommending an “aligned benefit rule,” that would allow a donor to get a break on capital gains taxes and estate and gift taxes upon funding their DAF, but would withhold the income-tax deduction until distributions are made to a public charity.”

Good News of The Week

Ahmed Muhammad was babysitting his youngest family members and ended up stumbling into becoming a nonprofit founder. Ahmed was looking for activities and decided that he would show his nieces and nephews how to make a battery out of potatoes. This project led him to create Kits Cubed a nonprofit that provides science experiment kits to schools and individuals to help them feel more comfortable with S.T.E.M. Ahmed, started to promote these kits and it caught on. He then partnered with an established nonprofit and Kits Cubed took off. Last week, Ahmed was accepted into Stanford University, becoming the first member of his family to go to college. Read the full article here and check out Kits Cubed.Small Nonprofits in 2020 Story — https://bit.ly/3nV4ms9

2020 Growth in Giving Report — https://bit.ly/38F5cCJ

AI and Fundraising Article — https://bit.ly/2WTrhbs

State of AI in Advancement Report — https://bit.ly/34PNdZ7

Philanthropist Push for Reforms — https://bit.ly/2WTrkEa Accelerate

Charitable Giving Initiative — https://bit.ly/2M4bAMb

Good News Story of the Week — Ahmed Muhammad — https://cnn.it/3aKUdKN