Inclusion should be among nonprofit fundraising strategies

New nonprofit organizations are on the rise in the United States and in Madison. Familiar organizations like the YWCA Madison, the Boys and Girls Club of Dane County, Centro Hispano and United Way of Dane County, as well as lesser known entities like Operation Welcome Home, conNEXTions, or E3inspire, each have a need to raise funds to perform services that are valuable to our communities. Key to successful future fundraising will be the ability of organizations to continue to engage majority culture while expanding their donor of color base.

Years ago, it was widely assumed that people of color lacked the financial resources and the tradition of charitable giving. However, it is widely documented and embraced today that every racial and ethnic group has a rich tradition of philanthropy. As populations of color grow and people of color become majorities in communities across America, successful nonprofit organizations will need to diversify their donor base to sustain and grow their operations.

America is in the midst of a dramatic cultural shift, but studies by Cultures of Giving, Coalition for New Philanthropy, and Emerging Practitioners in Philanthropy suggest that organized philanthropy appeals and methods significantly lag behind the shift in population and are ineffective in garnering support in communities of color as our nation becomes increasingly more ethnically and racially diverse.

The February 2015 Blackbaud Institute study, Diversity in Giving: The Changing Landscape of American Philanthropy, revealed that 75% of today’s donors are non-Latino whites, despite making up 62.4% of the population. Why is this the case? Are whites more generous than other racial and ethnic groups? No, but there are factors like income and religious engagement that are stronger predicators of giving behavior than race or ethnicity. These factors are evident from examining census results.

In 1967, when the 200-millionth American was born, 78% of U.S. residents were classified as white. By 2006, when the 300-millionth American was born, that number had dropped to just over 60%. The U.S. Census Bureau predicts that by the 2044, Asian, Hispanic, multiracial groups, and traditionally underrepresented populations will hit majority status. Ninety-percent of U.S. population growth over the next 45 to 50 years is expected to come from people of color, with the most significant gains being in the Latino population.

Immigration is also a major factor in this demographic revolution. More than 12% of the residential population of the U.S. is made up of people born outside the borders of this country, which is the largest percentage since the 19th century. More than 50% have come to the U.S. since 1990, and these numbers don’t include the millions of undocumented residents. In his book, Brown is the New White, Steven Philips writes, “Every day the population of white people in the U.S. grows by 1,053 people, while the population of people of color grows by almost seven times that number.” The numbers suggest that there is a significantly growing population to include and embrace in philanthropic efforts.

The fact is that just like the majority culture, people of color want to give and will give to charities in which they see the ability to make a difference. Whether in a neighborhood school, local homeless shelter, community arts programs, literacy program, community garden, scholarship fund, or help for the elderly, people of all ethnicities are willing to help where they see the need. Organizations should never assume that a particular person or group of people won’t offer and supply financial support. Although donor priorities, values, and habits differ somewhat between ethnic or racial groups, people of color will give more if asked.

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It makes sense to tap into donors of color to engage more people in philanthropy. Understanding where the opportunity exists is key to that engagement.

Among African-American donors, religion dominates giving priorities. Blackbaud Institute’s report reveals that 50% of African-Americans say they donate to their place of worship more than any other nonprofit category. Local social service, children’s welfare, health, youth development, and anti-racism or anti-hate organizations are also categories favored by African-Americans.

Among Asian-American donors, researchers found that the most mentioned philanthropic categories include health, children’s, and local social service organizations. Compared with the overall donor universe, Asian-American donors prefer to give to organizations that make a difference by providing direct services, support nonprofits because of their faith or religion, and prefer to give to organizations that make a difference by changing policies or laws. Asian-American donors are also more likely to give online via an organization’s website and are twice as likely as other donors to say they have given via a crowdfunding project.

Latino giving is characterized by spontaneity. They are more likely to make their giving decisions in the moment and frequently give to children’s causes, their place of worship, or health and social service organizations. Latino donors tend to be younger and have more male donors than female compared to other ethnicities.

Examining these donor subgroups reveals important tends. Most people, regardless of ethnicity, want to feel like they are making a tangible difference — and know they are contributing to important, lasting change. People also want compelling giving opportunities and the opportunity to see how their money is being used.

Ultimately, nonprofit organizations need to go beyond historical giving methods by targeted outreach to communities of color. Listening to, interacting with, and understanding the needs of donors, discovering their passions, and finding out what motivates their giving should be the guiding principles to grow and sustain philanthropy.

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