The Chronicle of Philanthropy (12/11/08) recently published a study sponsored by the Philanthropic Collaborative which concluded that for every dollar contributed by a foundation to the philanthropic sector an economic benefit of $8 is realized. The research was produced by Sonecon who projected that the $42.9 billion dollars donated by foundations in 2007 returned $367.9 billion in ‘direct economic benefits’.
In these times of reduced endowment returns nonprofit organizations are increasingly focusing on annual donors. A colleague pointed out recently that a single dollar donated annually would require $20 or more in endowment principle. Stated differently, your contribution of $25 would require a $500 endowment gift to create $50 in returns annually. A $50 gift requires $1,000 in endowment principal, $100 requires $2,000 to be committed to endowment and finally a $1,000 gift needs $20,000 in endowment to generate a similar return. Does your organization have a more realistic chance of finding a donor at the $100 level annually or a donor willing to commit $2,000 donation to endowment. In these difficult times, many endowment gifts have been slashed by a third or even half due to volatile investment markets requiring eve larger gifts to match an annual fund contribution.
$1 might be worth a lot more than any of us thought.
What-if-concepts 