'Restricted' Gifts on the Rise - US Survey
31 October 2005 at 12:10 pm
A US survey by software giant Blackbaud reveals that an increasing number of donors are giving ‘restricted’ gifts to ensure that donations are funnelled to specific causes.
Blackbaud’s State on the Nonprofit Industry survey found that approximately half (48.3%) of respondents report that they have seen an increased demand from donors asking that their contributions be restricted for a certain purpose.
Many factors have contributed to this developing trend, including an increase in disaster-relief funding, an overall demand for accountability and transparency in the sector, and personal preferences.
Blackbaud CEO Robert J. Sywolski says the survey found that more than 40 percent of donors report that a personal connection to a Not for Profit is the driving force behind determining where to make donations — so it’s no surprise that many would direct their gifts to a specific cause.
He says with the rise of restricted giving, NFP’s have a chance to build donor trust by proving to their supporters that they can effectively manage and spend donations appropriately.
Profile of a restricted giver
NFP’s responding to the Blackbaud survey report that older and higher income individuals are amongst those with a greater likelihood of making a restricted gift:
– Approximately 55 percent (54.2%) say high-income donors are most likely to request that their gifts be earmarked for a certain cause.
– More than 70 percent (72.3%) say middle-age to older donors (age 35+) are most likely to restrict their gifts.
– More than one-third (34.4%) of organisations say first-time donors will also restrict gifts.
Wanted: unrestricted gifts
With the increase in donations earmarked for certain uses, organisations are proactively pursuing and securing gifts from different sources to help cover general operating expenses. Also, survey respondents report that 44.9% of NFP’s are now specifically soliciting unrestricted gifts.
Organisations also report the following:
– 30.2% are seeking additional foundation grants to fund operating expenses.
– 33.4% are looking to other non-grant revenue sources to fund operating expenses.
– 14.4% are seeking additional government grants to fund general operating expenses.