Charitable giving up and evolved post-recession

Even as giving to Twin Cities nonprofits has rebounded in recent years, organizations face new challenges in getting their share of the money.

Donors are likely to want more information about how their dollars are spent before they commit to giving. They want to feel engaged in a cause that matters to them throughout the year, leaders of area nonprofits say.

In response, fundraising campaigns are changing. Many are becoming year-round efforts that enable contributors to see what their money is accomplishing. There are more volunteer opportunities, and more efforts to communicate online and in nontraditional methods.

"What I would say is postrecession donors are different, and we're different," said Sarah Caruso, president and chief executive of Greater Twin Cities United Way. "Donors want very specific information. They want a direct line of sight from their gift to the difference it's making in the community."

The new approaches are paying off. This year's Star Tribune Nonprofit 100, dominated by large health care concerns and private universities, saw revenue grow an average 5 percent in 2014, including donations, grants and sales of products.

Across the nation, Americans donated about $358.4 billion to charities in 2014, more than the previous peak in giving in 2007, before the Great Recession, according to the 2015 Giving USA report. The amount was the highest total in the report's 60-year history.

"I think the main reason [for the growth] is the healthier American economy," said Josh Birkholz, chair of Giving USA Foundation's advisory council on methodology and a principal at Edina-based nonprofit consulting firm Bentz Whaley Flessner.

Several years ago, "all bets were off," said Danielle St. Germain-Gordon, director of development for the Guthrie Theater. In 2008 and 2009, the Guthrie had to undergo serious cuts to its programming, she said. In 2013, the theater posted its first deficit in nearly 20 years. But last year, the Guthrie's contributed income increased 23 percent compared with the year before.

For the Guthrie, the biggest impact in fundraising in recent years has been corporate giving, St. Germain-Gordon said. Some local companies that have partnered with the Guthrie in the past have spread their donations outside the Twin Cities as their workforce becomes more global.

As a result, the Guthrie has begun to focus more of its fundraising efforts on individual giving and national foundations' contributions, she said. "We are looking outside our backyard."

Nonprofits across the country are adjusting their strategies after lessons learned during times of financial hardship and to address shifting donor priorities.

For one, organizations are trying to diversify their revenue streams to make sure they are not over-reliant on any one type of funding, Birkholz said. During the recession, certain types of giving suffered more than others, and now nonprofits are trying to protect themselves from being vulnerable.

At the same time, the museum and other nonprofits are also facing more demanding individual donors, who are asking organizations to be more accountable and transparent about how funds are used.

"Our strategy is recognizing that donors' expectations are increasing," Egeberg said.

The key is to keep donors informed and engaged, especially millennials, Egeberg said. The museum has experimented with programs like "Social Science," an adults-only series of events that covers anything from the science of beer to the science of sex.

Next year, United Way — which brought in $84 million in revenue in 2009 and is expecting it could reach $100 million this year — is revamping its website to make it easier for individuals to get involved, Caruso said.

The organization also is trying to improve ways to communicate its impact with donors and potential donors. Donors want data to make sure that their money is actually making a difference in the community, she said.

Some of the more traditional methods of communicating with donors such as mail requests and phone calls have continued to fall by the wayside.

The Guthrie closed its call center two years ago. While the number of donor households decreased when the call center was shuttered, the change saved the Guthrie money because it cost more to run the center than what it was raising, St. Germain-Gordon said.

Instead, the Guthrie is concentrating its efforts on engaging in other ways. It has expanded the times of its donor lounge and last month started having box office staff ask ticketbuyers to round up their purchases and donate the difference.

Some organizations are shifting to continual fundraising instead of focusing on large capital campaigns.

The Science Museum's strategy is to begin "mini-campaigns" of a few million dollars to help with exhibits and other projects, Egeberg said.

The society's last large capital campaign, which raised $32 million in private funds, was more than a decade ago for the construction of the Mill City Museum, Rudnitski said. But organizations also need financial help in between large projects, she said.

As 2015 closes, Birkholz said there is uncertainty about what the year will look like in terms of giving because of the volatility of the market, but he hopes it is similar to last year.

Still, he said, "If that stock market tanks, the economy goes down, we are going to go right down with it."

Nicole Norfleet • 612-673-4495