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Philanthropy journal – More than money – Engaging donors

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By Todd Cohen

Philanthropy is on a roll, but it also has hit some bumps and needs to shift gears quickly.

Last year, donations both to 400 of the biggest U.S. charities and to community foundations grew 13 percent.

And in the seven weeks since the Sept. 11 terrorist attacks, individuals, foundations and corporations have donated more than $1 billion to support victims of the attacks.

That’s all good news, but it also raises questions: Where is the donated money going? How are charities using it? And what are they doing to involve donors in their work?

Charities can focus too much on raising money and too little on spending it wisely and converting donors into agents of social change.

A huge chunk of funds donated for Sept. 11 relief, for example, has fallen into philanthropic limbo, fragmented among hundreds of charities poorly prepared to handle a big surge in giving.

As a result, funds have failed to reach victims they were intended to help.

Nowhere is the turmoil more troubling than at the Red Cross — the charity that hauled in more than half the donations made after the Sept. 11 attacks.

The Red Cross has drawn fire for aggressive fundraising and sloppy handling of the funds it has received. And its president, Bernadine Healy, has quit under board pressure, in part because she wanted to use much of the donated money to meet other pressing needs.

Like the Red Cross, community foundations have honed the art of courting donors. But they also could fall victim to their own success if they lose sight of the vital larger role they can play in their communities as catalysts for change.

To market themselves more effectively and better serve donors, community foundations have bulked up their fundraising machinery and are working more closely with one another and with banks and other financial institutions.

They also are promoting their local presence as a competitive advantage over commercial charitable gift funds, which themselves have enjoyed rapid and aggressive growth.

The Fidelity Charitable Gift Fund, for example, now trails only the Salvation Army among all U.S. charities in annual dollars raised.

But community foundations could lose the edge they claim if they become so preoccupied with raising money that they miss – or steer clear of — the chance to agents of change.

The time is ripe. Despite the weak economy, Americans are contributing to charity. And they want to do more than write checks.

Donors want to get involved in the work of the charities they support, and they are looking for charities with innovative ideas for solving the toughest issues our communities face.

Donors also expect and deserve to know exactly where their money is going and how it is being spent.

If they harness their fundraising to hands-on philanthropy, charities can convert donors into doers and engage them in the work of healing and repairing our communities.

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