Since our July roundup of research, we’ve seen yet more new insightful data and analyses. Our picks for this month’s roundup touch issues like the debate over the effectiveness of donor-advised funds, higher education, society’s carrying capacity for nonprofits, and behavior of charitable donors. Here’s an overview of the newest research that caught our attention.
Stop Warehousing Wealth in Charity Funds
A new report from Institute for Policy Studies (IPS) warns that despite the burgeoning growth of charitable contributions through donor-advised funds, the philanthropic mechanism may not actually be paying out to charity. Though the form of giving has risen to about $23 billion annually, the report, Stop Warehousing Wealth in Charity Funds, finds that only about 20% of that money is actively going to cause work. The IPS report elevates the concern that because the majority (about 70%) of charitable funding comes from individuals, the rise of DAFs may mean a siphoned cashflow to nonprofits doing urgent work. At the same time, issues considered less urgent may snowball while funding sits in reserves.
More on the report:
• This popular form of charity might just be a tax shelter for the 1%
Low-Income Students at Selective Colleges: Disappearing or Holding Steady?
One of the main points made in a July 2018 report from the American Enterprise Institute is that the opportunity gap for America’s poorest students has neither increased nor shrunk significantly since 1999-2000. Moreover, the report authors say that despite the drastic rise in costs of college attendance, the net cost of attendance at the 200 most selective colleges rose only $1,358. That the share of low-income students at elite colleges hasn’t decreased is heartening. As is the fact that the cost of attendance hasn’t risen at the same rate as it has for those students’ more affluent peers. However, Washington Post writer Valerie Strauss made the case for why, rather than maintaining the status quo, the ultimate goal should be to increase the share of students from low-income backgrounds at the most selective institutions.
More on the report:
• The talent is out there. So why don’t elite colleges enroll more low-income students?
A Field Too Crowded? How Measures of Market Structure Shape Nonprofit Fiscal Health
In a recent piece that appeared in The Conversation, nonprofit researchers Robert Christensen and Rebecca Nesbit unpack the findings of a March 2018 report on the relationship between the density of nonprofits in a given market and the overall fiscal health of tax-exempt organizations. Though fiscal health is measured with some nuance depending on the field of nonprofit activity, the research suggested a trend that had less to do with distribution alone, and more to do with how evenly resources are allocated in the region being studied. The fiscal health of markets with dense nonprofit distributions only experienced a negative effect when resources were evenly distributed. In markets where resources were less evenly distributed, organizations experienced more positive fiscal health in spite of denser distribution. Despite the general trendlines, Christensen and Nesbit suggest that the average region and market has room for more nonprofit service, as most U.S. communities have an average of fewer than 3 nonprofits per 1,000 people.
More on the report:
• America Has 1.5 Million Nonprofits and Room for More
Best of Intentions: Using Behavioral Design to Unlock Charitable Giving
Nonprofit behavioral design firm ideas42 and the Gates Foundation teamed up to release a new report that chronicles the findings from several experiments aimed at nudging people toward auditing their own behavior to act more altruistically. Some of the effective tactics tested for the Best of Intentions report, were:
- A workplace donation platform that allowed users to indicate what percent of their income they wanted to give, then compare it to average gift from all donors
- Campaign emails with dollars-given and distance-to-go figures
- In the case of donor-advised funds, an email summarizing the activity of the donor’s funding in terms of how much they contributed overall and what proportion has been granted out
More on the report:
• These charity experiments successfully nudge people to give more
Add Your Voice
The research summaries above are by no means an exhaustive list of the newest information out there to help us better understand the nonprofit landscape. So if we missed a report you think we should know and share about, let us know by leaving a comment!
