How many miles does the typical million-dollar check travel between the philanthropist’s mailbox and the inbox at the major gifts office? While we may not be able to answer that question exactly (and there is no such thing as a typical million-dollar check), we can draw some valuable insights from a recent study by the Lilly Family School of Philanthropy at Indiana University and CCS Consulting. IU studied 20,941 gifts of $1 million or more between 2000 and 2011. They found that most major gifts go to organizations in the donor’s home state or region.
Overall, the IU researchers found that 47 percent of large gifts, and 52 percent of large gift dollars, went to in-state recipients. Sixty percent of million-dollar-plus gifts went to organizations in the same geographic region. The study sheds light on the state of local philanthropy, and it should prompt some serious questions.
Higher education institutions experienced the highest levels of giving (by far) among categories of recipient organizations, with 48 percent of major gifts. Major gifts to colleges and universities amounted to $86 billion, or 32 percent of total major gift dollars. At a distant second were public-society benefit organizations such as grant-making foundations, advocacy groups, and think tanks—8.5 percent of major gifts went to these organizations, totaling $11 billion, 4 percent of major gift dollars. Following closely after the public-society benefit category were health; human services; and arts, culture, and humanities.
Higher education institutions can thank donors who share the same state for about half of their major gifts. Sixty percent of big higher education funders live in the same region. The vast majority of charitable bequests to colleges and universities (61 percent of gifts and 75 percent of dollars) originate in the same state. The Chronicle of Higher Education maintains a running list of top donations to the cause of higher education, including $1 billion from the Bill and Melinda Gates Foundation to the Gates Millennium Scholars Program beginning in 1999, $600 million from Gordon and Betty Moore and their foundation to the California Institute of Technology in 2001, and $460 from the F.W. Olin Foundation to establish the Franklin W. Olin College of Engineering in 1997. The Moore gift went to an institution in their native California, and the New York-based F. W. Olin Foundation planted its college in nearby Massachusetts.
Over 40 percent of major gifts and major gift dollars to public-society benefit organizations stayed in-state, and a little over half stayed in the same region. Meanwhile, 80 percent of large charitable bequests and 88 percent of large charitable bequest dollars to public-society benefit organizations went to in-state organizations.
Environmental organizations attracted individual in-state major donors to the tune of 58 percent of gifts and 78 percent of dollars given. Yet only 40 percent of foundations’ big donations remained in-state. While just over two-thirds of large environmental bequests stayed in the same state, such local gifts were on the smaller side, with only 19 percent of total large-bequest dollars staying in the same state.
The highest rate of in-state or regional gifts of $1 million or more occur within the health category. Of individual major gifts to hospitals and other health organizations, 72 percent of gifts and 81 percent of dollars went to organizations in the same state; the number increased to 78 percent and 86 percent respectively when it came to organizations in the same region. About half of corporate major gifts and 60 percent of major foundation gifts to health organizations remained in-state. Almost 70 percent of charitable bequests to health organizations were given in the same state, and 80 percent were given in the same region.
About 60 percent of large gifts and dollars to arts, culture, and humanities groups stayed in-state. When it came to human services organizations like the American Red Cross, Goodwill, and the YMCA, about half of major gifts from individuals and foundations went to in-state causes, and 60 percent went to regional human service groups. Corporate giving showed a radically different pattern: only 12 percent of corporate gifts to human services organizations stayed in-state.
One of the most striking findings of the IU study is that relatively little major gift money from individual donors goes to support local churches and other in-state religious organizations. Only 36 percent of individual major gifts to religious organizations stayed in the same state, and these were generally smaller gifts—a mere 20 percent of individual major gift dollars to religious organizations stayed in state. Only 34 percent of major charitable bequest dollars to religious organizations went to local churches and other in-state religious groups. Clearly, national and international ministry organizations are far more effective than local ministries at bringing in major gift dollars from individuals and bequests. Local ministries fare better with foundations; 51 percent of foundation gifts and 58 percent of foundation gift dollars in the religious organization category went to in-state religious institutions.
So, while most million-dollar-plus donations in America go to in-state or regional organizations, this isn’t true in every category of organizations. And foundation, corporate, and individual giving patterns may differ remarkably within categories.
We can regard the overall picture for state-based and regional major giving as a sign of health for local philanthropy. But there is reason for concern when it comes to the specific numbers. Why do 60 percent of environmental large gifts from foundations go to out-of-state organizations? Why do 80 percent of religious major gifts from individuals go to out-of-state organizations? And why do 88 percent of human services major gifts from corporations go to out-of-state organizations?
Finally, we might ask whether our own communities—those places to which, and neighbors to whom, we owe our love and loyalty—would be better off if even more philanthropy stayed local?