Donation Patterns of Individuals and Small Foundations
From research findings, international giving resources and organizations that individuals and small foundations can use to make international giving impactful and efficient include Global Giving, the Giving Global Matrix, GuideStar, BBS Wise Giving Alliance, and CharityWatch. Additionally, individuals in the United States contributed a total of $309.66 billion to charity in 2019, and evidence of how much donors care about due diligence when donating internationally is in the existence of due diligence businesses and NGO watchdog and oversight organizations in the charitable giving sector. A detailed look at the research findings and research strategy follows below.
International Giving Resources and Organizations
- Global Giving is "a nonprofit that supports other nonprofits by connecting them to donors and companies."
- The organization helps donors in the United States make safe and easy tax-deductible donations to vetted charity organizations that are locally-driven. These organizations are spread out across the world.
- Since 2002, Global Giving has helped raise over $519 million from over 1.18 million people that have supported 27,745 projects in 170 countries across the world.
- Donors use the organization to safely and easily give to vetted nonprofits that are located anywhere in the world in an efficient and impactful manner.
Giving Global Matrix: Tax, Fiduciary and Philanthropic Requirements
- Giving Global and KPMG partnered to produce the Giving Global Matrix, a resource that individuals and small foundations can use to navigate the tax requirements and allowances that govern charitable giving in 60 countries that are located in North America, Latin America, Africa, Europe, Asia, and the Middle East.
- The Giving Global Matrix provides a country-to-country analysis of the tax, fiduciary, and philanthropic requirements of giving internationally that individuals and small foundations can use to create an efficient and impactful strategy of giving.
- Individuals and foundations can utilize the report to get a better understanding of each featured country's unique tax law requirements and charitable environment. This information can be used to efficiently achieve global philanthropic goals.
- Categorized reports for various regions can be accessed on the company's website.
- A dated article on the Wall Street Journal identifies GuideStar as a database that contains the tax filings and other information of over 1.8 million active nonprofits. The platform also has historical data for charities that individuals and small foundations can use in conducting due diligence.
- GuideStar contains the most complete and up to date information on nonprofits that can be used by individuals and small foundations to find, research, and analyze charitable giving opportunities.
- The platform provides reports, the profiles of nonprofits, and facts & insights that can be used to gather information and facilitate safe and impactful philanthropy.
- GuideStar's directory of charities and nonprofits has information for 14,380 international development and relief services charities, 820 international human rights charities, 1,057 international peace and security charities, 2,996 promotion of international understanding charities, and 3,900 services and other charities.
BBS Wise Giving Alliance
- BBS Wise Giving Alliance is a "standards-based charity evaluator that seeks to verify the trustworthiness of publicly-soliciting charities by completing rigorous evaluations based on 20 BBB Standards for Charity Accountability."
- The standards were developed to help donor decisions in philanthropic giving and to foster public confidence in charities. Consequently, individuals and small foundations can use the BBS website to perform due diligence and find useful information on wise giving.
- BBS maintains a list of charities that individuals and foundations can use to look at a snapshot of an international charity that they want to donate to. Example profiles of international charities include the profiles for African Wildlife Foundation and Lutheran World Relief.
- The platform has a donor section that contains useful information that individuals and small foundations can use to make their international giving safe, impactful, and efficient. It is worth noting that the accountability assessment and reports offered by BBS to donors are free of charge.
- CharityWatch is a watchdog and information database for local and international nonprofits and charities. The organization's main purpose is to maximize the effectiveness of each and every dollar that is contributed to charity by giving donors information that they can use to make informed giving decisions.
- The organization's goals include educating the public on the importance of wise giving, wasteful and unethical practices of nonprofits, and to provide recognition to highly effective and ethical charities.
- CharityWatch maintains lists of all charities, top-rated charities, and high asset charities. Additionally, the organization also has resources for donors that individuals and small foundations can use to make their international giving decisions and ensure their donations are impactful.
- Examples of international charities that have been evaluated by CharityWatch include Aid for Starving Children, World Wildlife Fund, and the Children's Hunger Relief Fund.
Donation Patterns of Individuals and Small Foundations
- In 2019, Americans gave a total of $449.64 billion to charity. This figure reflects a 5.1% increase from 2018.
- Out of the $449.64 billion, foundations contributed a total of $75.69 billion while individuals contributed a total of $309.66 billion.
- Around 90% of high net worth households in the United States give to charity. Additionally, on average, "high net worth donors gave $29,269 to charity in 2017 while general population households gave $2,514."
- According to Statista, there are around 5.91 million high net worth individuals in the United States. Using these statistics, it was concluded that around 5.319 million high net worth individuals contribute to charity in the country.
- In the United States, individuals "account for 4 of every 5 dollars given to charities in this country."
- According to Giving USA, a total of $28.89 billion was donated to international causes in 2019.
- Additional information on how much individuals and small foundations contributed to the total dollar amount highlighted above was not available in the public domain.
Due Diligence and Donating Internationally
Monitoring the Impact of Donations
- Today, many donors care about due diligence because they are concerned about the impact that their funds have had and whether the funds were used for legitimate purposes.
- This is because, when donors give large sums of money to charity, it is vital that they verify that the money is going to a genuine organization and funds are used appropriately without misuse.
- In the United States, around two-thirds of high net worth families "reported that they give to organizations when they believe their gift will make a difference and when they know the organization is efficient in its use of donations."
Existence of Due Diligence Companies
- The existence of businesses that offers charity due diligence services also points to the fact that donors care about due diligence and they are actively looking for due diligence services before putting their funds into charitable organizations.
- Examples of such companies include Global Philanthropic, CAF America, NGO Global Connect, International Due Diligence Organization, and Wealth-X.
NGO Oversight Organizations
- The presence of NGO watchdogs and evaluators that offer most of their information on the legitimacy of NGOs for free also signals to the importance of due diligence to donors. This is because such entities act as information hubs and databases that potential donors can use to make a sound giving decision.
- Examples of such organizations include BBS Wise Giving Alliance, National Center for Charitable Statistics, Charity Navigator, and CharityWatch.
- These organizations provide lists of charities and ratings/grades that show the performance of the charities. This information is mostly free to access by potential donors in their due diligence research process and further shows the importance due diligence is regarded with in the charitable giving industry.
We were able to find most of the requested information from credible sources that included NGO watchdogs and evaluators, business news resources, and statistical resources. However, for the first part, information on examples of individuals and small foundations that have used the resources was unavailable. We primarily searched for this information in NGO watchdog and evaluator resources such as CharityWatch, BBS Wise Giving Alliance, and Global Giving. We attributed the unavailability of this information to the privacy component of charitable giving where many entities do not want their details divulged. For the second part, information on the number of individuals and small foundations that give less than $5 million to international charities was unavailable. We primarily focused our search on statistical resources such as Giving USA, Statista, NPTrust, and US Census Bureau. We attributed the unavailability of this information to the segmentation standards implemented on the available United States charitable donations data.
- High net worth individuals that donate to charity = 5.91 million x 90% = 5.319 million.