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Study: Only half of American households donate to charity

Study: Only half of American households donate to charity

For the first time in nearly two decades, only half of U.S. households donated to a charityBy HALELUYA HADERO AP Business WriterJuly 27, 2021, 9:05 PM• 4 min readShare to FacebookShare to TwitterEmail this articleFor the first time in nearly two decades, only half of U.S. households donated to a charity, according to a study released Tuesday. The findings confirm a trend worrying experts: Donations to charitable causes are reaching record highs, but the giving is done by a smaller and smaller slice of the population.The study, published every other year by Indiana University’s Lilly Family School of Philanthropy, comes from a survey that has been tracking the giving patterns of more than 9,000 households since 2000, when 66% of U.S. households donated to a charitable organization. That number dropped to 49.6% in 2018, the latest year with comprehensive figures from those households.Experts say many factors are contributing to the decline. The percentage of Americans who give to religious causes has decreased in tandem with attendance at worship services as the number of Americans not affiliated with any religion grows. Separately, the share of Americans who give to secular causes began to drop following the economic turbulence of the Great Recession, but it hasn’t bounced back. It reached a new low — 42% — in 2018, the study said.Una Osili, the associate dean for research and international programs at the Lilly School, suggests this is, in part, because the Great Recession made it difficult for some younger Americans to establish a habit of giving. The study found only about a third of households headed by someone under the age of 40 gave to charity in 2018, a trend Osili believes will be a challenge for charities.“What are the factors that will bring them into giving? Especially if they are not attending services, and not participating in networks that will lead to giving,” she said.The nationally representative study from the university does have its limitations. It measures giving to charitable organizations, but doesn’t analyze donations made through informal crowdfunding campaigns, which tends to draw younger audiences. It does, however, measure contributions of goods and services.The study says declining levels of trust among Americans for institutions and each other may also contribute to the move away from charitable giving. That mistrust is especially pronounced among millennials, which could cause another layer of challenges for charitable organizations.The data shows a majority of households headed by a person who had a college or a graduate degree, and was married or widowed gave to charity. Wealth was also a factor.Nearly 8 out of 10 households with more than $200,000 of wealth gave to charity in 2018, the study said. By contrast, less than 4 in 10 households with wealth less than $50,000 made donations.“The overall pie (in giving) is slowly moving towards the ultra wealthy,” said John List, an economics professor at the University of Chicago who studies giving, adding that this shift can be dangerous. “Rich people give to causes that rich people want to give to,” he said. “You have a very different supply of goods and services from the charitable community when the rich people give versus when the middle-class or lower-class gives.”Critics have long argued that large charitable donations by wealthy philanthropists are only possible in an era of rising income inequality, a point philanthropist MacKenzie Scott cited during her latest announcement of donations.Phil Buchanan, the president of the Center for Effective Philanthropy and author of “Giving Done Right: Effective Philanthropy and Making Every Dollar Count,” believes the declining giving participation rate also shows charities are failing to communicate their message effectively.American society tends to deify businesses and and athletes, he said. “And we can do a better job of elevating the work and heroism of nonprofits in communities all across the country.”————The Associated Press receives support from the Lilly Endowment for coverage of philanthropy and nonprofits. The AP is solely responsible for all content. For all of AP’s philanthropy coverage, visit https://apnews.com/hub/philanthropy.

Effort to fund racially diverse climate groups gets momentum

Effort to fund racially diverse climate groups gets momentum

An effort to disclose and increase how much philanthropic funding goes to minority-led environmental organizations receive is gaining momentumBy HALELUYA HADERO AP Business WriterJuly 22, 2021, 9:10 PM• 3 min readShare to FacebookShare to TwitterEmail this articleEfforts to increase how much philanthropic funding goes to minority-led environmental organizations are gaining momentum, with one group’s push for transparency from the nation’s top climate donors drawing big-name support.For months, Donors of Color Network, a philanthropic group dedicated to funding racial equity efforts, has asked the top 40 climate funders to disclose what percentage of their funding during the past two years went to organizations led by Black, Indigenous, Latino and other racial minorities, and pledge at least 30% of their climate donations to such groups.On Thursday, two of them — the California-based William & Flora Hewlett Foundation and the Boston-based Barr Foundation — released data that shows 10% of their climate funding went to minority-led environmental justice groups. That number was 31% at the New York-based JPB Foundation, another top donor.With those announcements, five of the top 40 donors have released their data from the last two years, along with another nine smaller funders. Donors of Color says four of the top 40 donors — and a dozen other foundations — have signed its pledge, agreeing to meet the 30% minimum the group has set and release their funding data.Advocates for environmental justice — which promotes fair treatment of racial minorities and low-income residents when dealing with environmental issues — argue more funding for their groups is needed to win the climate change debate.A study released last year from The New School showed that, between 2016 and 2017, environmental justice groups received just 1.3% of the funding earmarked for climate organizations in the Gulf and Midwest regions.“Engaging those communities in decision-making (and) in the solutions for climate is essential,” said Miya Yoshitani, the executive director of the Oakland-based Asian Pacific Environmental Network and a member of the White House Environmental Justice Advisory Council. It’s important, she said, for communities “to see themselves as part of the solution to this incredible and enormous problem.”The Hewlett Foundation is one of three top donors that only agreed to the transparency portion of the pledge. Larry Kramer, the president of Hewlett, says the organization declined to pledge 30% of its climate funding towards minority-led groups as a matter of “both legal and policy judgment.”“We don’t think there are magic numbers,” Kramer said. “We prefer to do our grantmaking, be transparent about it and always be working to improve.”Kramer says the foundation is doing other things to improve diversity among its climate grantee pool, including employing efforts to make its own staff — and the staff of the organizations it supports — more diverse.Five of the the top 40 donors have declined the pledge, with some citing that their climate funding is mostly done outside of the U.S., according to the Donors of Colors Network. Ashindi Maxton, the executive director of the organization, says the group is in conversation with more than two dozen of the other top donors about the pledge, though some say they don’t sign pledges.“No one has said that they don’t sort of agree with the ultimate end goals of what we’re doing,” she said. “A lot of people just have a lot of internal machinery to move to do this.”—————The Associated Press receives support from the Lilly Endowment for coverage of philanthropy and nonprofits. The AP is solely responsible for all content. For all of AP’s philanthropy coverage, visit https://apnews.com/hub/philanthropy.

Critics take aim at charitable money sitting in donor funds

Critics take aim at charitable money sitting in donor funds

Wealthy philanthropists have long enjoyed an advantageous way to give to charity: Using something called a donor-advised fund, they’ve been able to enjoy tax deductions and investment gains on their donations long before they give the money away.These so-called DAFs set no deadlines for when the donations must reach charities; the donors themselves decide when and where the money goes.Critics complain that because DAFs provide no financial incentive to quickly donate the money, much of it ends up sitting indefinitely in the accounts rather than being distributed to needy charities.That criticism has helped drive a Senate bill that would tighten the rules for DAFs and aim to speed donations to charities. The bill, introduced by Sens. Angus King, a Maine Independent, and Chuck Grassley, an Iowa Republican, appears to be gaining bipartisan support in Congress.The bill would make numerous reforms to DAFs by, among other things, creating new categories of accounts.One type of account would give donors an immediate income tax deduction for money they agree to give to a charity within 15 years.The second type would let them delay the distribution of their money for 50 years. These donors would get no income tax deduction until then. But they would still get to enjoy capital gains and estate tax savings for donating stocks or gifts into a DAF.Community foundation-sponsored DAFs with less than $1 million would be exempt from the requirement. But donors with more than $1 million in such accounts would qualify for upfront tax benefits only if they distributed at least 5% of their assets annually or gave their money to a charity within 15 years. Under current law, assets can remain in a DAF indefinitely, tax-free.“This is about as common sense a bill as I’ve ever seen,” said King, who caucuses with Democrats.“The idea of getting a tax deduction today for money that may not be paid out for 50 years makes no sense,” the senator added. “I understand you might want to put it into a fund and have someone else manage it. But it’s got to go out within a reasonable period of time. Otherwise, it’s an abuse of the tax code.”The proposed reforms have opened a rift in philanthropy circles among billionaire donors, community foundations and trade associations and have sparked intense lobbying efforts both for and against the legislation.The debate was ignited when John Arnold, a Texas-based billionaire who made his fortune in hedge funds and now co-chairs Arnold Ventures, joined with a group of scholars and philanthropies to propose a set of reforms under a coalition they called The Initiative to Accelerate Charitable Giving. The group met with lawmakers to advocate for the reforms, which have largely been incorporated into the Senate bill.What sparked Arnold’s interest, he said, was seeing rich people with philanthropic intent funneling money into DAFs yet distributing very little of it to charities.“The money was just sitting there growing,” Arnold said. “There wasn’t any intent of abuse of the system. But the money was just building up because there was no forcing mechanism.”Opponents of the bill counter that tighter restrictions on DAFs are unnecessary because the average annual payout rates for DAFs hover around 20% — much higher than the 5% minimum required of private foundations. Richard Graber, who leads the conservative Bradley Foundation, calls the legislation “a solution in search of a problem.” (The foundation is affiliated with Bradley Impact Fund, a DAF sponsor).Yet without payout requirements, supporters of the legislation say DAFs — which hold an estimated $142 billion in the United States — have essentially become warehouses for charitable donations. The accounts let donors set up endowed accounts that exist in perpetuity and can pass on to their heirs.A June report by the Council of Michigan Foundations showed that 35% of DAFs sponsored by Michigan community foundations distributed no money in 2020, a year marked by enormous need because of the viral pandemic.Today, roughly 1 in 8 charitable dollars are estimated to go into DAFs. The New York Community Trust, a community foundation, established the first DAF in 1931. Their use accelerated in the 1990s, when Fidelity Charitable launched a national donor-advised fund program. Charitable arms of many financial firms, including Vanguard Charitable and Schwab Charitable, now run robust DAF programs.Community foundations, along with universities, hospitals, faith-based groups and large charities like United Way also sponsor DAFs. Collectively, they account for a 300% growth in DAF accounts over the past 10 years, according to the National Philanthropic Trust.Eileen Heisman, who leads the philanthropic trust, notes the ease of opening a DAF account online, the emergence of workplace charitable-giving accounts and low initial minimum contributions. Indeed, Fidelity and Schwab require no initial contributions at all for opening a DAF account, Heisman noted, thereby transforming it into a financial vehicle anyone can use. Still, the average value of a DAF account — estimated at about $162,000 — shows that DAFs remain a vehicle mainly for the affluent.The Senate bill was crafted with guidance from Ray Madoff, a Boston College law professor who, alongside Arnold, has called for stricter DAF rules. Madoff and a colleague published a study in May that showed that working charities had lost $300 billion in contributions over a five-year period as more people channeled donations through DAFs and private foundations rather than directly to charities.The Philanthropy Roundtable, a conservative-leaning group that opposes payout requirements for DAFs, disputes those findings. Its president, Elise Westhoff, argues that “more mandates and regulations on giving will just make it harder for all Americans to support the causes they care about.”Supporters of the bill, including William Schambra, a philanthropy expert at the conservative Hudson Institute, say much of the pushback reflects a financial incentive that DAF sponsors want to preserve: The fees they charge to manage the accounts.Some community foundation leaders agree.“Community foundations’ business models are based on asset management,” said Paul Major, the CEO of the Colorado-based Telluride Foundation. “They charge fees, and that’s how they fund their operations. If they have less money to manage, they bring in less fees.”“But the objective of charitable giving is not to manage more money,” Major said. “The objective is to put the money to work.”Other experts agree on the need to rein in DAFs but favor a different approach. Edward A. Zelinsky, a professor at Yeshiva University’s Benjamin N. Cardozo School of Law, argues that creating a minimum annual contribution requirement for all DAFs would more effectively accelerate donations to charities.Some community foundations say they think the bill is unnecessary because their organizations already have policies that incentivize faster payouts. Jeff Hamond, who oversees a coalition of 130 community foundations, contends that the legislation would increase the financial burden on community foundations, requiring them to track each donation.“For every kind of additional cost burden you put on a community foundation,” Hamond said, “you’re actually driving more people to Fidelity, Vanguard and Schwab.”The Senate bill would also prohibit donors from claiming tax benefits for complex donations — like real estate — that exceed the value of the gift. It would also incentivize private foundations to increase their payouts to 7% and bar them from meeting their payout requirements by paying salaries or other expenses for relatives or by donating to DAFs.The Senate bill has been referred to the Finance Committee, though a vote hasn’t been scheduled. A spokesman for King’s office said the senator expects a bipartisan House version of the bill to be introduced in the coming weeks.“I haven’t met anybody yet that I’ve described it to,” King said, ” who does anything but say, ‘Why didn’t we do this a long time ago?’ ”———The Associated Press receives support from the Lilly Endowment for coverage of philanthropy and nonprofits. The AP is solely responsible for all content. For all of AP’s philanthropy coverage, visit https://apnews.com/hub/philanthropy.

Critics take aim at charitable money sitting in donor funds

Critics take aim at charitable money sitting in donor funds

Wealthy philanthropists have long enjoyed an advantageous way to give to charity: Using something called a donor-advised fund, they’ve been able to enjoy tax deductions and investment gains on their donations long before they give the money away.These so-called DAFs set no deadlines for when the donations must reach charities; the donors themselves decide when and where the money goes.Critics complain that because DAFs provide no financial incentive to quickly donate the money, much of it ends up sitting indefinitely in the accounts rather than being distributed to needy charities.That criticism has helped drive a Senate bill that would tighten the rules for DAFs and aim to speed donations to charities. The bill, introduced by Sens. Angus King, a Maine Independent, and Chuck Grassley, an Iowa Republican, appears to be gaining bipartisan support in Congress.The bill would make numerous reforms to DAFs by, among other things, creating new categories of accounts.One type of account would give donors an immediate income tax deduction for money they agree to give to a charity within 15 years.The second type would let them delay the distribution of their money for 50 years. These donors would get no income tax deduction until then. But they would still get to enjoy capital gains and estate tax savings for donating stocks or gifts into a DAF.Community foundation-sponsored DAFs with less than $1 million would be exempt from the requirement. But donors with more than $1 million in such accounts would qualify for upfront tax benefits only if they distributed at least 5% of their assets annually or gave their money to a charity within 15 years. Under current law, assets can remain in a DAF indefinitely, tax-free.“This is about as common sense a bill as I’ve ever seen,” said King, who caucuses with Democrats.“The idea of getting a tax deduction today for money that may not be paid out for 50 years makes no sense,” the senator added. “I understand you might want to put it into a fund and have someone else manage it. But it’s got to go out within a reasonable period of time. Otherwise, it’s an abuse of the tax code.”The proposed reforms have opened a rift in philanthropy circles among billionaire donors, community foundations and trade associations and have sparked intense lobbying efforts both for and against the legislation.The debate was ignited when John Arnold, a Texas-based billionaire who made his fortune in hedge funds and now co-chairs Arnold Ventures, joined with a group of scholars and philanthropies to propose a set of reforms under a coalition they called The Initiative to Accelerate Charitable Giving. The group met with lawmakers to advocate for the reforms, which have largely been incorporated into the Senate bill.What sparked Arnold’s interest, he said, was seeing rich people with philanthropic intent funneling money into DAFs yet distributing very little of it to charities.“The money was just sitting there growing,” Arnold said. “There wasn’t any intent of abuse of the system. But the money was just building up because there was no forcing mechanism.”Opponents of the bill counter that tighter restrictions on DAFs are unnecessary because the average annual payout rates for DAFs hover around 20% — much higher than the 5% minimum required of private foundations. Richard Graber, who leads the conservative Bradley Foundation, calls the legislation “a solution in search of a problem.” (The foundation is affiliated with Bradley Impact Fund, a DAF sponsor).Yet without payout requirements, supporters of the legislation say DAFs — which hold an estimated $142 billion in the United States — have essentially become warehouses for charitable donations. The accounts let donors set up endowed accounts that exist in perpetuity and can pass on to their heirs.A June report by the Council of Michigan Foundations showed that 35% of DAFs sponsored by Michigan community foundations distributed no money in 2020, a year marked by enormous need because of the viral pandemic.Today, roughly 1 in 8 charitable dollars are estimated to go into DAFs. The New York Community Trust, a community foundation, established the first DAF in 1931. Their use accelerated in the 1990s, when Fidelity Charitable launched a national donor-advised fund program. Charitable arms of many financial firms, including Vanguard Charitable and Schwab Charitable, now run robust DAF programs.Community foundations, along with universities, hospitals, faith-based groups and large charities like United Way also sponsor DAFs. Collectively, they account for a 300% growth in DAF accounts over the past 10 years, according to the National Philanthropic Trust.Eileen Heisman, who leads the philanthropic trust, notes the ease of opening a DAF account online, the emergence of workplace charitable-giving accounts and low initial minimum contributions. Indeed, Fidelity and Schwab require no initial contributions at all for opening a DAF account, Heisman noted, thereby transforming it into a financial vehicle anyone can use. Still, the average value of a DAF account — estimated at about $162,000 — shows that DAFs remain a vehicle mainly for the affluent.The Senate bill was crafted with guidance from Ray Madoff, a Boston College law professor who, alongside Arnold, has called for stricter DAF rules. Madoff and a colleague published a study in May that showed that working charities had lost $300 billion in contributions over a five-year period as more people channeled donations through DAFs and private foundations rather than directly to charities.The Philanthropy Roundtable, a conservative-leaning group that opposes payout requirements for DAFs, disputes those findings. Its president, Elise Westhoff, argues that “more mandates and regulations on giving will just make it harder for all Americans to support the causes they care about.”Supporters of the bill, including William Schambra, a philanthropy expert at the conservative Hudson Institute, say much of the pushback reflects a financial incentive that DAF sponsors want to preserve: The fees they charge to manage the accounts.Some community foundation leaders agree.“Community foundations’ business models are based on asset management,” said Paul Major, the CEO of the Colorado-based Telluride Foundation. “They charge fees, and that’s how they fund their operations. If they have less money to manage, they bring in less fees.”“But the objective of charitable giving is not to manage more money,” Major said. “The objective is to put the money to work.”Other experts agree on the need to rein in DAFs but favor a different approach. Edward A. Zelinsky, a professor at Yeshiva University’s Benjamin N. Cardozo School of Law, argues that creating a minimum annual contribution requirement for all DAFs would more effectively accelerate donations to charities.Some community foundations say they think the bill is unnecessary because their organizations already have policies that incentivize faster payouts. Jeff Hamond, who oversees a coalition of 130 community foundations, contends that the legislation would increase the financial burden on community foundations, requiring them to track each donation.“For every kind of additional cost burden you put on a community foundation,” Hamond said, “you’re actually driving more people to Fidelity, Vanguard and Schwab.”The Senate bill would also prohibit donors from claiming tax benefits for complex donations — like real estate — that exceed the value of the gift. It would also incentivize private foundations to increase their payouts to 7% and bar them from meeting their payout requirements by paying salaries or other expenses for relatives or by donating to DAFs.The Senate bill has been referred to the Finance Committee, though a vote hasn’t been scheduled. A spokesman for King’s office said the senator expects a bipartisan House version of the bill to be introduced in the coming weeks.“I haven’t met anybody yet that I’ve described it to,” King said, ” who does anything but say, ‘Why didn’t we do this a long time ago?’ ”———The Associated Press receives support from the Lilly Endowment for coverage of philanthropy and nonprofits. The AP is solely responsible for all content. For all of AP’s philanthropy coverage, visit https://apnews.com/hub/philanthropy.

Donations for racial equity have surged. But by how much?

Donations for racial equity have surged. But by how much?

A report released Thursday says more than 90% of donors who supported racial equity initiatives in 2018 have yet to report how much they gave in 2020By HALELUYA HADERO AP Business WriterJuly 15, 2021, 8:23 PM• 3 min readShare to FacebookShare to TwitterEmail this articleMore than a year after the police killing of George Floyd and the avalanche of donations toward racial equity initiatives that followed, the actual gift amounts and their destinations remain largely unknown, complicating efforts to gauge the effectiveness of the donations and their recipients.According to a joint report released Thursday by PolicyLink, a research firm that focuses on advancing racial and economic equity, and The Bridgespan Group, a New York-based consulting firm that has advised billionaire philanthropist MacKenzie Scott on her massive contributions, more than 90% of donors who supported racial equity initiatives in 2018 have yet to report how much they gave in 2020.The study further highlights the limitations experts have experienced tracking charitable dollars for racial equity causes amidst America’s racial reckoning. So far, only $1.5 billion of the nearly $12 billion that was pledged can be tracked to actual charitable recipients, according to the philanthropy research organization Candid.A comparison of Candid’s preliminary 2020 data to 2018, the most recent year for which there’s comprehensive figures, led researchers to the findings released Thursday. There has always been a lag in reporting philanthropic data since it’s tied to tax filings. Because of the limitations, the report is calling for institutional funders to proactively share information about their grants to Candid.“One of the larger takeaways is around what’s not possible to say at this point about the data for 2020,” said Laura Lanzerotti, a partner at The Bridgespan Group.Another complication with tracking the donations has been defining what ‘racial equity funding’ really means. There is no sector-wide consensus in the donor world about what contributions fall under that term.Michael McAfee, the president and CEO of PolicyLink, says a consensus is needed to distinguish “between really good acts of charity,” and “the liberatory work that is necessary to create” a just and fair society.Though, Una Osili, the associate dean for research and international programs at the Family School of Philanthropy at Indiana University, says that might also present more challenges.“There may be a need for more systematic definition because this work is boundary spanning,” she said. But, Osili added, advocacy efforts aimed at influencing public policy – and other things recommended in the report – may not fall under traditional activities for tax-exempt nonprofits.“That also presents another complication, because generally speaking, those are tracked separately by the IRS as 501(c)(4)s” – social welfare groups that don’t get tax exemptions.———The Associated Press receives support from the Lilly Endowment for coverage of philanthropy and nonprofits. The AP is solely responsible for all content. For all of AP’s philanthropy coverage, visit https://apnews.com/hub/philanthropy.

Donations for racial equity have surged. But by how much?

Donations for racial equity have surged. But by how much?

A report released Thursday says more than 90% of donors who supported racial equity initiatives in 2018 have yet to report how much they gave in 2020By HALELUYA HADERO AP Business WriterJuly 15, 2021, 8:23 PM• 3 min readShare to FacebookShare to TwitterEmail this articleMore than a year after the police killing of George Floyd and the avalanche of donations toward racial equity initiatives that followed, the actual gift amounts and their destinations remain largely unknown, complicating efforts to gauge the effectiveness of the donations and their recipients.According to a joint report released Thursday by PolicyLink, a research firm that focuses on advancing racial and economic equity, and The Bridgespan Group, a New York-based consulting firm that has advised billionaire philanthropist MacKenzie Scott on her massive contributions, more than 90% of donors who supported racial equity initiatives in 2018 have yet to report how much they gave in 2020.The study further highlights the limitations experts have experienced tracking charitable dollars for racial equity causes amidst America’s racial reckoning. So far, only $1.5 billion of the nearly $12 billion that was pledged can be tracked to actual charitable recipients, according to the philanthropy research organization Candid.A comparison of Candid’s preliminary 2020 data to 2018, the most recent year for which there’s comprehensive figures, led researchers to the findings released Thursday. There has always been a lag in reporting philanthropic data since it’s tied to tax filings. Because of the limitations, the report is calling for institutional funders to proactively share information about their grants to Candid.“One of the larger takeaways is around what’s not possible to say at this point about the data for 2020,” said Laura Lanzerotti, a partner at The Bridgespan Group.Another complication with tracking the donations has been defining what ‘racial equity funding’ really means. There is no sector-wide consensus in the donor world about what contributions fall under that term.Michael McAfee, the president and CEO of PolicyLink, says a consensus is needed to distinguish “between really good acts of charity,” and “the liberatory work that is necessary to create” a just and fair society.Though, Una Osili, the associate dean for research and international programs at the Family School of Philanthropy at Indiana University, says that might also present more challenges.“There may be a need for more systematic definition because this work is boundary spanning,” she said. But, Osili added, advocacy efforts aimed at influencing public policy – and other things recommended in the report – may not fall under traditional activities for tax-exempt nonprofits.“That also presents another complication, because generally speaking, those are tracked separately by the IRS as 501(c)(4)s” – social welfare groups that don’t get tax exemptions.———The Associated Press receives support from the Lilly Endowment for coverage of philanthropy and nonprofits. The AP is solely responsible for all content. For all of AP’s philanthropy coverage, visit https://apnews.com/hub/philanthropy.

Data gaps make it difficult to track racial equity funding

Data gaps make it difficult to track racial equity funding

A report released Thursday says more than 90% of donors who supported racial equity initiatives in 2018 have yet to report how much they gave in 2020By HALELUYA HADERO AP Business WriterJuly 15, 2021, 2:56 PM• 3 min readShare to FacebookShare to TwitterEmail this articleMore than a year after the police killing of George Floyd and the avalanche of donations toward racial equity initiatives that followed, the actual gift amounts and their destinations remain largely unknown, complicating efforts to gauge the effectiveness of the donations and their recipients.According to a joint report released Thursday by PolicyLink, a research firm that focuses on advancing racial and economic equity, and The Bridgespan Group, a New York-based consulting firm that has advised billionaire philanthropist MacKenzie Scott on her massive contributions, more than 90% of donors who supported racial equity initiatives in 2018 have yet to report how much they gave in 2020.The study further highlights the limitations experts have experienced tracking charitable dollars for racial equity causes amidst America’s racial reckoning. So far, only $1.5 billion of the nearly $12 billion that was pledged can be tracked to actual charitable recipients, according to the philanthropy research organization Candid.A comparison of Candid’s preliminary 2020 data to 2018, the most recent year for which there’s comprehensive figures, led researchers to the findings released Thursday. There has always been a lag in reporting philanthropic data since it’s tied to tax filings. Because of the limitations, the report is calling for institutional funders to proactively share information about their grants to Candid.“One of the larger takeaways is around what’s not possible to say at this point about the data for 2020,” said Laura Lanzerotti, a partner at The Bridgespan Group.Another complication with tracking the donations has been defining what ‘racial equity funding’ really means. There is no sector-wide consensus in the donor world about what contributions fall under that term.Michael McAfee, the president and CEO of PolicyLink, says a consensus is needed to distinguish “between really good acts of charity,” and “the liberatory work that is necessary to create” a just and fair society.Though, Una Osili, the associate dean for research and international programs at the Family School of Philanthropy at Indiana University, says that might also present more challenges.“There may be a need for more systematic definition because this work is boundary spanning,” she said. But, Osili added, advocacy efforts aimed at influencing public policy – and other things recommended in the report – may not fall under traditional activities for tax-exempt nonprofits.“That also presents another complication, because generally speaking, those are tracked separately by the IRS as 501(c)(4)s” – social welfare groups that don’t get tax exemptions.———The Associated Press receives support from the Lilly Endowment for coverage of philanthropy and nonprofits. The AP is solely responsible for all content. For all of AP’s philanthropy coverage, visit https://apnews.com/hub/philanthropy.

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