Opinion Columns & Blogs

Foon Rhee: Sacramento-region charities look online and to the young to increase giving

Huge gifts – like the $125 million donation announced this month by the University of the Pacific in Stockton – grab the headlines.

But it’s the quieter accumulation of smaller donations, especially online and from younger people, that will determine the long-term growth of charitable giving in the Sacramento region.

That’s where local nonprofit leaders are putting much of their attention, anyway.

For instance, the Sacramento Region Community Foundation is gearing up to join the first nationwide online Day of Giving next May 6. Locally, the goal is to raise $1 million in 24 hours from 5,000 donors, 30 percent of them first-time contributors.

That would be a groundbreaking achievement. The event follows up on the region’s first Arts Day of Giving in April that brought in nearly $412,000 from about 3,500 donors. That blew past the minimum goal of $100,000 and demonstrated again the power of the Internet as a fundraising tool and the growing importance of marketing through social media. Grassroots enthusiasm was key to the success – arts groups got the word out to their supporters, and dozens of restaurants and others gave discounts to donors.

Linda Cutler, who took over as community foundation CEO this year, says many contributors are getting savvier about where they put their money. No matter the size of their gift, donors want it to have a real impact in people’s lives.

So the foundation has just started a six-month strategic review to figure out the areas of greatest need, including whether there should be more focus on systemic causes “further upstream.”

That approach could appeal to younger donors, who tend to support causes, rather than institutions. Relatively cash poor, they also donate their time, another way to meet people, says the 2013 Millennial Impact Report.

Interestingly, the wealthiest donors are also volunteering more often to support issues they care about. Those who volunteered more than 100 hours that year gave twice as much as those who didn’t and tended to contribute to those groups, according to a 2012 study by Bank of America.

The region’s nonprofits need to reach out to the young and the wealthy if they are to close the “giving gap” with the rest of the country and to recover from the Great Recession.

Businesses and individuals pulled back as unemployment rose, the stock market plummeted, and the local real estate market cratered. The community foundation cut its grants to local groups from a high of $9 million in 2006 to about $4 million in 2012. It also manages charitable funds for individuals, nonprofits and corporations and tries to expand philanthropy in El Dorado, Placer, Sacramento and Yolo counties.

The campaign totals for United Way California Capital Region dropped from $13.8 million in 2007-08 to $11.3 million in 2012-13. It has 160 partners and works with 750 employers on workplace giving campaigns in the four-county region, plus Amador.

Cutler and Victoria Kosha, the local United Way’s interim president and CEO, say contributions are bouncing back as the economy rebounds, and say they are optimistic about continued improvement. It could take several years to return to pre-recession levels, however. Nationally, while giving increased by 3.5 percent last year, donations are still down by 8 percent from the peak in 2007.

During the downturn, weaker nonprofits – those without good leadership, or spent too little on services or overlapped with stronger groups – didn’t survive. To cut expenses or just stay afloat, some merged, including big-name groups such as the Sacramento Opera and Sacramento Philharmonic. Many others were forced to take a hard look at their missions and finances.

“It’s not a bad thing at all,” Cutler told me.

She says that nonprofits, however well-intentioned, can have more impact if they are efficient, if they cooperate with others working on the same issues and if they act more like for-profit companies in their marketing.

I’m with her. Because I donate through my workplace campaign and have given to various charities, my mailbox fills up with pleas for money. Nowadays, it takes a truly creative pitch to get my attention.

Nonprofits around here have to be particularly innovative to overcome some disadvantages. The capital region is home to far fewer Fortune 500 and other major corporations than San Francisco or Los Angeles, for example. That makes individual donations, which account for nearly three-fourths of overall giving, even more important.

A 2011 study done for the community foundation found that 62 percent of households in the four counties donated to charity, compared to 66 percent nationally, and that the average amount given was $365 less a year. The foundation launched a three-year multimedia campaign to get to the national averages and to boost gifts to local nonprofits. That could mean $250 million more a year.

Nationally, about half of the total donated by individuals comes from households with total wealth of at least $1 million or with income of at least $200,000 a year. While the Sacramento region doesn’t have as many super-rich philanthropists as, say, the Bay Area, it has plenty of residents with six-figure salaries and its share of baby boomers with sizable estates. It also turns out that the widest “giving gap” here is among the wealthy.

The University of the Pacific bequest shows the impact that one couple’s generosity can make. The $125 million will expand the university’s endowment by more than half, generating enough cash to fund scholarships for elite students who might otherwise attend Stanford, and for needy students who might not otherwise go to college at all.

Yet, as university President Pamela Eibeck tells how it happened, the gift also illustrates how such donations sometimes result from coincidence and pure luck over many years.

Robert and Jeannette Powell of Gold River, who were also major supporters of local arts, didn’t go to the university. Through friendships with people who happened to be on the university’s Board of Regents, Robert Powell joined the board in 1989. A high school dropout, he was awarded an honorary law degree in 1996. Jeannette became a regent in 1999. In 2007, the Powells promised a donation of at least $100 million. They made their fortune in construction and development – and cashed out just before the housing crash; wise investments drove up the value to $125 million.

That string of good fortune doesn’t happen very often. Counting on the wealthy to carry the load isn’t enough. We all have to pitch in – so nonprofits have to prove they’re worthy of our support.