Reporting on the Chronicle of Philanthropy’s 26th annual “Philanthropy 400,” a widely circulated AP story is entitled, “United Way loses its ranking as America’s largest charity.” The Chronicle’s lead article about the ranking this year renders the news as, “Fidelity Charitable Knocks United Way Out of Top Place in Ranking of the 400 U.S. Charities That Raise the Most.” A related Chronicle article by the same writers is, “Fidelity Overtakes United Way as New Charity Champion.” The Chronicle offers a total of 13 articles related to their 2016 “Philanthropy 400” report.
The two Chronicle articles above use racing imagery to describe the “neck and neck” competition through the years to be the “king of the hill.” Fidelity Charitable jumped so far ahead this year that it easily beat the 2015 Philanthropy 400 “photo finish.” But who knew they were in a race? Even as we consider the situation, headlines and all, we find ourselves comparing apples and oranges.
Fidelity Charitable is an independent public charity that has helped donors support more than 219,000 nonprofit organizations with more than $23 billion in grants. Established in 1991, Fidelity Charitable launched the first national donor-advised fund program. The mission of the organization is to further the American tradition of philanthropy by providing programs that make charitable giving simple, effective and accessible.
Fidelity Charitable, also called the Fidelity Gift Fund, does not “fundraise”; along with other investment companies holding donations, it provides a relatively passive but helpful vehicle for holding money and administratively facilitating the grants process. This is attractive to many donors for a variety of reasons. Under its model, donors find their own recipients and set their own priorities. It’s a low touch method of intermediation that provides an immediate tax break for potentially years of gifts.
The Associated Press mentions one particular advantage that Fidelity and others offering donor-advised funds bring to philanthropy: “They’re efficient at processing non-cash donations such as real estate, securities, even bitcoins. Fidelity says about two-thirds of its contributed dollars last year were non-cash assets. By some calculations, donor-advised funds could soon account for 10 percent of all giving from individual Americans.” As we mentioned: helpful, attentive to donor interests, and a light touch.
United Ways, on the other hand, very definitely fundraise, complete with publicly set local goals. United Ways see part of their value-add in directing the donor dollar, even going so far as establishing their own priorities for local giving. This is a high-touch method of intermediation, one whose receipts have declined by a third over the past 25 years. That’s no surprise, considering the ease with which nonprofits can be researched and gifts given these days, along with the workplace and corporate changes affecting the success of the United Way model. The organization has attempted to block this decline in various ways over that period by reinventing itself—creating funding agendas for communities and increasing its focus on large donors—but it is leaking for reasons probably more associated with an epochal shift than with focus or capacity.
If one were to compare these two models, you do see one method of acting as intermediary to donor dollars as emergent and the other as fading, but even then, one ought to count all such donor-advised fund hosts, including Schwab Charitable, which is 4th on the list; Vanguard, which is 11th; and even perhaps the Silicon Valley Community Foundation (10th on the list) where 79 percent of the money is held in donor-advised funds. Pit them against the United Way, and perhaps other workplace solicitation campaigns like the Combined Federal Campaign, which has been experiencing its own relatively precipitous dive, and the race, if there were one, would have finished long ago. If you did not know that, you haven’t been paying attention.
Now, add to that inconsonance the fact that these two types of intermediaries are on the same list as organizations like Harvard and Doctors Without Borders, which raise money for one specific institution’s work. Is it useful to define the complexity of the nonprofit world with a one-dimensional ranking—at least as far as the headlines go?
In another awkward fit, the two Chronicle of Philanthropy articles under these winners-and-losers headlines remind us that widespread death and misery help move a charity up the Philanthropy 400 ladder (or, rather, in a charity’s presumed strivings to be “king of the hill”): “Growth has been spurred in part by a series of major humanitarian disasters, including the 2010 Haiti earthquake, the 2011 Asian tsunami, and the Syrian refugee crisis.” MSF doctors ranked 73rd this year, “down” from 69th in 2015—shame on them! Instead of taking pride in their fundraising department, Doctors Without Borders are more likely coming to terms with PTSD