Excellence in Giving Blog
With increased competition, the pressure on nonprofits to invest more in fundraising has brought about better marketing materials, more development staff, and stronger donor pitches. This trend has made it harder for even the smartest donors to tell the difference between hearing a good story and identifying the right place to make a big gift.
Many nonprofits are turning to traditional business models to supplement their fundraising income or, in some cases, walk away from the donation model entirely. How are these nonprofits freeing themselves from donor dependency? And which organizations should consider doing the same?
Charitable Giving in the United States reached record levels in 2016 for the third year in a row (Giving USA). It grew 16% from $335 billion in 2013 to $390 billion in 2016. How many nonprofits caught the national giving wave? Why did some miss it and others exceed it?
Guidestar announced in January 2018, "Around 50 percent of the nation’s nonprofits are operating with less than one month’s cash reserves." That headline makes it sound like a half million charities could close if people stopped giving for a month. Oliver Wyman and SeaChange Capital Partners analyzed Guidestar's archived 990s from 2010-2014 to make this claim. Suzanne Coffman, Guidestar's editorial director, summarized the data from this study of nonprofit financials in a simple article (admittedly designed to market a Nonprofit Quarterly webiner): "Half of U.S. Nonprofits on Financial Precipice, New Report Finds." That's scary news.
The good news is that Guidestar's information is both old and incorrect.
Common question asked by nonprofit Boards: "How much should a nonprofit CEO get paid?" Common questions asked by donors: "Is that charity CEO over-compensated?" We at Excellence in Giving have to answer this question all the time for major donors our firm advises. And we have the data to do it.
Since we collected 75,000 fields of detailed organizational data over the last 2 years, we can now release an excerpt of our nonprofit CEO Compensation findings in 2018. Our study includes data from 372 nonprofits whose CEO compensation was analyzed according to staff size, annual expenses, CEO tenure, and geographic location. Here are the results...
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