World Giving Index

Australia is the most generous country in the world

The high levels of involvement in the three giving behaviours in Australia mean that this country sits at the top of the World Giving Index this year. In a typical month, more than two-thirds of Australians donate money to charity and help a stranger. More than a third volunteer. In addition, Australia has the highest score on average over the past five years. There is tangible evidence that the Australian government is taking action to further encourage philanthropy, allowing the donations and efforts of the Australian public to have yet more impact.

Globally, average participation in giving has fallen since 2007

The average participation in each of the giving behaviours has fallen since 2007. Participation in helping strangers stood at 47.0% in 2007, and fell to 45.1% by 2011. The equivalent figure for donating money to charity was 29.8% in 2007, falling to 28.0% in 2011. The decline for volunteering time was the largest of the three: from 21.4% to 18.4%. Although the percentage of people participating has declined, the actual number of people who donate money and volunteer time is higher than it was in 2007. This, however, has been shown to be due to the rise in the global adult population over the period - had there been no increase in population since 2007, fewer people would now be engaged in each of the three giving behaviours.

There has been a 'double dip' in giving

Global participation in each of the three behaviours was at its lowest level in 2009. Engagement in the three behaviours then rebounded relatively strongly in 2010, before falling again in 2011. Over recent years, the fluctuation in global participation in giving has echoed both the rate of growth in global gross domestic product (GDP), and the numbers of disasters and emergencies recorded around the world.

2011 witnessed a sharp fall in engagement across giving behaviours

Between 2010 and 2011 the number of people who have donated money, volunteered time and helped a stranger have each, on average, fallen by at least 100 million. Average participation has also fallen by approximately two percentage points in each case. The most generous countries have very diverse social, economic, geographic and political profiles The World Giving Index focuses on the percentage of people who donate money, volunteer time, and help a stranger, to any extent, in a typical month. It does not quantify the amount of money donated, the number of hours volunteered, or the number of strangers helped. The strength of this approach is that it provides a clear view of the basic state of giving worldwide - by showing who is 'included' in giving, and who is not. The 20 highest ranked countries have very diverse profiles. Geographically, the list includes at least one country from each continent. In terms of economic strength, it includes Qatar, the second highest on the list of countries by GDP per capita, and Liberia, the second lowest. It includes the United States of America, a country of over 300 million people, and Trinidad and Tobago, a country of just over one million.

Helping strangers is the most commonplace giving behaviour, volunteering time the least

The proportion of people who help strangers on a monthly basis (45.1%) is more than seventeen percentage points greater than the proportion who donate money, and more than double the proportion who volunteer time. Over time, participation levels in the three giving behaviours have fluctuated in unison Over the five-year period examined in this report, levels of engagement in the three behaviours have broadly fluctuated in unison. Only at one point - 2008 - was any divergence observed. At this point, the percentage of people donating money rose markedly as engagement in helping strangers fell.

Continents differ clearly in how they give

The report shows how much variation exists in terms of the extent to which people of different continents are able to engage in the three giving behaviours. Engagement in donating money for example is more than four times higher in Oceania than it is in Africa. Average participation in helping strangers is also far higher in Africa than it is in either Europe or Asia. Africa has seen a clear reduction in its giving, over the past five years Africa's average giving score for the most recent year stands three percentage points lower than its average across the past five years. All other continents are within one percentage point of their five- year average. Moreover, the reduction in giving in Africa has been felt evenly across the three giving behaviours of donating money, volunteering time and helping strangers.

Globally, women donate money more than men but men volunteer time and help a stranger more than women

Throughout the past five years, at any point in time, there has been less than a five percentage point difference between the proportion of men and women who donate money to charity, volunteer time, and help strangers. Whilst it is true that more women donate money to charity than men, and that more men volunteer time and help strangers, it is also true that the aggregate differences between the two are relatively narrow. Deeper research would be required to understand if the total value of money donated, or total amount of time dedicated to giving, are as similar.

Young people are less engaged with donating money to charity

There is a marked difference in the involvement of the world's youngest and oldest people when it comes to donating money. Over the past five years, the youngest generation (16 - 24 year olds) has consistently been within a few percentage points of the oldest generation (50+) in terms of likelihood to volunteer time and helping strangers, but as much as 10 percentage points less likely to donate money to charity.

Five myths about charitable giving

By Ken Stern, Published: December 27

http://www.washingtonpost.com/opinions/five-myths-about-charitable-giving/2012/12/27/99cde18a-4de6-11e2-839d-d54cc6e49b63_print.html

Ken Stern is the chief executive of Palisades Media Ventures and a former chief executive of National Public Radio. His book “With Charity for All: Why Charities Are Failing and a Better Way to Give,” will be published in February.
by Ken Stern The last few days of the year may be a time of celebration and indulgence, but it is also when many people think about helping others. Though much of the roughly $240 billion in individual charitable contributions comes in December, these donations are often made hastily, based on poor information. Before writing those end-of-the-year checks, here are some things to remember about how charities work and how to evaluate them.

1. Charities are principally dedicated to serving the poor and needy.
The term “charity” is associated with helping the poor and downtrodden, but American charities — 1.1 million organizations with $1.5 trillion in annual revenue — make up a large, rapidly growing economic sector that includes health care, higher education, scientific research, social services and the arts. There is incredible diversity among charities, from tiny neighborhood food banks to multi-state hospital chains boasting lavish concierge services and million-dollar salaries for executives. In fact, hospitals are the largest component of the U.S. charitable sector, but they are more likely to be profitable than for-profit hospitals and aren’t much more likely to serve the needy.
It’s also astonishingly easy to start a charity. The Internal Revenue Service approves more than 99.5 percent of charitable applications, often in very short order. Because of this, the sector includes more than a few organizations that have little connection to common notions of doing good: the Sugar Bowl, the U.S. Golf Association, the Renegade Roller Derby team in Bend, Ore., and the All Colorado Beer Festival, just to name a few.


2. Donors should reward charities that have low overhead.
The notion that charities should put as much money as possible into services and as little as possible into overhead expenses is widely accepted. Overhead ratios, which measure the relationship between a charity’s income and expenses, are one factor in popular rating systems such as Charity Navigator and the Better Business Bureau’s Wise Giving Alliance. Charity Navigator, for example, suggests that administrative spending greater than 30 percent is unreasonable, and it rewards its highest ranking to organizations that put less than 15 percent of their resources toward such costs.
Low overhead has become a point of pride — and marketing — for charities such as the Brother’s Brother Foundation, a Pittsburgh-based relief organization whose Web site boasts that “less than 1% of the value of donations [is] used for overhead.”
But charities need to spend on research, training and financial systems, all classified as “overhead,” to be effective. Those that shortchange these investments — and many do — are less likely to achieve their goals. The American Red Cross, for instance, struggled during Hurricanes Katrina and Sandy in part because it hadn’t invested enough in the infrastructure necessary to handle complex emergency relief.
That lack of investment is partly due to public pressure, rather than a shortage of funding. When then-Red Cross chief executive Bernadine Healy tried to appropriate unused money from the 9/11 Liberty Fund to correct weaknesses in the group’s broader emergency response capacity, she was forced to resign.


3. Tax incentives are critical to charitable giving.
People with income in the lowest quintile give a higher percentage of their earnings to charity than do more wealthy Americans. This pattern persists despite the fact that low earners have less disposable income and rarely take advantage of itemized tax deductions for charitable donations. Sure, some contributions are tax-driven: Almost a quarter of online giving occurs in the last two days of the year as taxpayers rush to qualify for deductions. But Americans’ generosity may be more resistant to changes in the tax laws than most people think.
According to Congress’s Joint Committee on Taxation, the charitable tax deduction will cost the federal government $230 billion from 2010 to 2014. Some economists believe that charities would lose less than that amount if the exemption were eliminated or modified, since people give for many reasons unrelated to tax incentives. Because of the perceived unfairness and inefficiency of the current system, many analysts, including at the Congressional Budget Office, have begun to look at substantial changes, from establishing floors or ceilings for deductions (sometimes in combination with making incentives available to non-itemizers) all the way up to eliminating the deduction.


4. Nonprofits are not profitable.
In 2010, U.S. charities reported more than $2.7 trillion in assets. Even putting aside the multibillion-dollar endowments of Harvard and Yale universities, many lesser-known charities have substantial war chests. In 2007, Ascension Health, a large Midwest charity hospital chain, reported reserves of $7.4 billion, more than twice the cash on hand at the Walt Disney Co.
Some donors look for small, underfunded charities, thinking their gifts will make a bigger difference. But that is not necessarily an effective strategy. Many of the charities with strong track records in delivering results — organizations such as Youth Villages of Memphis and the Nature Conservancy — are also quite good at building financial reserves. Charities like these identify clear goals and have third parties evaluate their work, practices that are more important than how much they have in the bank.


5. It is easy to find a good charity to support.
In fact, it is enormously difficult. Not only is there considerable confusion among charities — for example, there are more than 60,000 with the word “veteran” in their names — there is little information on groups’ effectiveness. The mutual fund industry employs 159,000 people to help investors make good choices. But there are fewer than 100 people nationwide whose jobs are to help the giving public make wise donations. So what is a conscientious donor to do?
Put in the work. On average, Americans spend more time watching television in one day than they do researching charities in an entire year. Finding good charities takes time. It means using the few organizations, such as GiveWell, that do in-depth studies of charities’ effectiveness. And it means remembering that the best organizations, charitable or otherwise, are built on more than a good story or a charismatic leader.
As Warren Buffett once said: “I try to buy stock in businesses that are so wonderful that an idiot can run them. Because sooner or later, one will.” That’s good advice when trying to make sure donated dollars actually do good.

Sample Receipt Letter

If your charity is looking for new ways to raise cash, you may be interested in holding auctions where members of the community can bid on goods and services that are donated by interested parties. Non-profit organizations can raise their profile by offering items for auction that people actually want to bid on. As such, it’s important to remember to acknowledge the person or organization that has donated items for your charity to auction off.

Expressing Thanks

Saying “thank you” goes a long way toward forging relationships between your charity and the organizations that donate goods and services to promote your cause. You will want to study a sample receipt letter to see what you should be writing to the people offer donations to you.

After all, your charity is presumably in it for the long haul, and you will likely want to hold a charity auction at least once per year, if not once per season. Depending on the financial goals of your organization, you may need to solicit valuable items and services to auction off, so you can raise the appropriate level of funding.

By studying a sample receipt letter, you can see that you need to thank the donor for his or her time, effort and material support. You’ll need to include information about what the donor provided and state when it is scheduled to be auctioned. It’s also important to include information about the location and the venue if it is an auction taking place in a building, or the website if it is an online auction.

When you thank the donor, remember to include contact information so he or she can quickly reach you with any questions or concerns.

Tax Deductible

When you write a receipt letter, it’s prudent to remind the donor about the tax advantages of helping out your charity. While not every donor organization is primarily interested in benefiting with its tax-deductible donations, it is still a factor to consider.

Besides getting name recognition to acknowledge the support being offered, the donor will be able to lessen its tax liability by making donations to your organization, and it is only fitting that you confirm your non-profit status.

After you study a sample receipt letter to help you write your own letter on behalf of your charitable organization, you will be prepared to put in your own words the gratitude that you want to express, and your hope that the donor will continue to find your charity worth supporting in the future.

Free Charity Auction Software

Auctions are a great way for charities to raise funds to support their ongoing activities and to finance the purchase of goods and services for their clients. An auction is also a great way to energize the community and encourage people to learn more about the charity and the good works it performs.

People who might otherwise not be so interested in donating money to a charity may find themselves enticed into making a contribution when they stand to gain something in the auction.

If your organization is preparing to run an auction, you will want to get some free charity auction software. Even if you are a computer novice, you can quickly learn how to use auction software to help your organization.


Features of Charity Software

Once you obtain free charity auction software, you will be able to easily set it up and begin raising money.

Typically auction software enables you to set up pre-bidding before the main event, which is particularly helpful in attracting people to your charity and to drum up excitement and interest in the items or services being auctioned.

You can use the software to register bidders ahead of time, to help you get an idea of how many participants there will be. The software will also let you set up sponsors for the event. For example, if your organization wants to auction off a weekend at a local resort, different resorts in your area can sign up with the software.

Use the software to enter pictures and descriptions of all the items being offered, so people can use their computers to see what they can bid on. Likewise, the software lets you keep track of donors, register their credit cards and generate invoices for them to pay after the auction has concluded.


Raise More Money

Charity auction software is ideal for helping your organization raise more funds for your vital projects. For example, by using the software’s integrated social media functions, you can advertise and promote the auction to your organization’s online friends, which will help spread the word and bring in more funds.

Software for charity auctions usually has an event countdown timer, which gives people a sense of urgency to make their bids. What’s more, you can use the built-in goal thermometer to keep track of how much money has come in and to show people just how much more they need to spend to meet your organization’s needs.

The nutshell: Non-Profits explained

The term “nonprofit” simply refers to “not being commercial motivated.” To think that non-profits should not make any profits is simply wrong. As a matter of fact, they can, do and should make profits. Important is what is done with those profits and where they came from. 

There are three basic types of nonprofit organizations:

• Informal Nonprofit Organizations
• Incorporated Nonprofit (Corporation)
• Tax-Exempt Organization

Informal Nonprofit Organizations

Anybody can form an “informal” nonprofit, simply by getting together with other people to provide support or services to benefit others. We see this all the time - "Save the Trails of Marquette County", "Recycle Otsego County", "Friends of St. Ann". There are no special benefits in being an informal nonprofit, other than personal satisfaction in helping others. However, there may be certain legal liabilities.

Informal nonprofit organizations should check with an attorney before starting an informal nonprofit to discuss possible legal liability risks. If you plan to deduct expenses, receive donations, or charge any fees, you also need to talk with a tax accounting professional.

Informal nonprofit organizations are not, and cannot be, tax-exempt organizations.

Incorporated Nonprofit Organizations

This type of nonprofit is formed by incorporating in a particular state to form and be recognized as corporation. A corporation takes the place of individual ownership. Just like a for-profit organizations the corporation “owns” itself, and therefore, can own its own property, have its own bank account, take out its own loan, and can continue on its own eve if the founder leaves the organization.

One of the major benefits of incorporation is that the corporation takes on legal liability and financial risks so that founders, officers, and board members have little or no liability (with the exception illegal acts, or gross fiscal misconduct).

Nonprofit corporations can be classified in many ways, including as a public benefits corporation, public charity, or educational foundation.

Nonprofit corporations may be formed to benefit members of an organization (a club, or mutual benefit society) or for some public purpose (such as a disaster relief, social assistance programs, or youth development programs).

A nonprofit organization is not automatically tax exempt.

Tax-Exempt Organizations

Nonprofit corporations must file with the IRS as a separate step in order to receive tax exempt status. An organization cannot receive tax exemption unless it has first formed as a corporation with an accepted charitable structure and purpose.

Not all nonprofit organizations are eligible for tax exempt status. Only those that meet certain requirements, as defined by the IRS, will receive exempt status. You will need to complete an IRS Form 1023 to apply. The form is long, the process is expensive, and it can take up to one year to receive a decision.

Tax-exempt corporations are required to operate their business in certain ways, file a Form 990, and meet other IRS requirements, or risk losing their exemption status.

How to write a fundraising ask letter

Writing a successful fundraising letter is a work of art. Unfortunately however, many lack style, are unimaginative, repetitious and just plain a general waste of time. So, how do you actually write a successful fundraising letter? 

The most important thing of a non-profit charity fundraising letter is the first few sentences. What comes, after that only plays a second row role.

Grade A+ letters grab you right from the start. They speak to your values and give you a compelling reason to donate. Those letters are truly personal. Grade F letters on the other hand have nothing to do with you or give you any reason why you should donate to the charity.

Here are some examples of different fundraising letters:

• Grade F - Dear Friend, Christmas is right around the corner. We are all busy preparing for the festivities. The feast is being prepared, last minute shopping is being done and don't forget about those greeting cards. We, here at the Community Foundation, have also been busy....
• Grade C - Dear Community Foundation Member, Yesterday, Ally F. and her sisters had a wonderful day. They experienced the true meaning of Christmas. For the first time in two years Ally and her family were able to enjoy a Holiday dinner together. Ally's eyes tearded up from pure joy, as she opened her gifts. It is because of donors like you.....
• Grade A - Dear Linda, Having a hard time finding the right gift? Give the gift that keeps on giving and provide hope, mobility and freedom to a child. Your gift of $85 will give a brand new wheelchair to a child in need....

Retain Non-Profit Volunteers

Finding the right volunteers for your non-profit charity auction can be a true struggle. Young, top tech talent is most likely busy working for corporate America. They enjoy generous paychecks and benefit package along with fun company perks. Non-profits struggle to compete, since they most likely are not able to accommodate the same.
This is where non profit charities need to find different ways to attract potential volunteers/employees. 
These days, young professionals thrive on passion for mission. Making a difference for society is inspiring for many volunteers and the reason to give. Volunteers for non profit charities want to feel like they are part of something bigger. Doing good feels great to them and therefore volunteers don't mind making sacrifices.
Also try to make your non profit charity volunteers feel part of the project. They need to have the feeling that they are needed and not just used. Giving them responsibility for big chunks of a project, such as a non profit charity auction, makes them feel appreciated. Using BiddingOwl makes this task a little bit easier. Each volunteers can be given a separate user account that gives them access to certain part of the non profit charity auction process. Volunteers will have fun using the easy to use system.