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A donation is a gift given by physical or legal persons, typically for charitable purposes and/or to benefit a cause. A donation may take various forms, including cash offering, services, new or used goods including clothing, toys, food, and vehicles. It also may consist of emergency, relief or humanitarian aid items, development aid support, and can also relate to medical care needs as i.e. blood or organs for transplant. Charitable gifts of goods or services are also called gifts in kind.
In the United States, in 2007, the Bureau of Labor Statistics found that American households in the lowest fifth in terms of wealth, gave on average a higher percentage of their incomes to charitable organizations than those households in the highest fifth. Charity Navigator writes that, according to Giving USA, Americans gave $298.42 billion in 2011 (about 2% of GDP. The majority of donations were from individuals (73%), then from bequests (about 12%), foundations (1.8%) and less than 1% from corporations. The largest sector to receive donations was religious organizations (32%), then education (13%). Giving has increased in 3 out of 4 years since 1971 (with the occasional declines occurring around recession years).
Blackbaud reports that, in the US, online giving in 2012 grew 10.7% on a year-over-year basis. The percentage of total fundraising that comes from online giving was about 7% in 2012. This was an increase from 6.3% in 2011 and is nearing the record level of 7.6% from 2010 when online giving spiked in response to Haitian earthquake relief efforts. Steve MacLaughlin notes in the report that "the Internet has now become the first-response channel of choice for donors during disasters and other emergency events."
Donations are given without return consideration. This lack of return consideration means that, in common law, an agreement to make a donation is an "imperfect contract void for want of consideration." Only when the donation is actually made does it acquire legal status as a transfer or property. In civil law jurisdictions, on the contrary, donations are valid contracts, though they may require some extra formalities, such as being done in writing. In politics, the law of some countries may prohibit or restrict the extent to which politicians may accept gifts or donations of large sums of money, especially from business or lobby groups (see campaign finance). Donations of money or property to qualifying charitable organizations are also usually tax deductible. Because this reduces the state's tax income, calls have been raised that the state (and the public in general) should pay more attention towards ensuring that charities actually use this 'tax money' in suitable ways.
There have been discussions on whether also a donation of time should be tax deductible.
In countries where there are limits imposed on the freedom of disposition of the testator, there are usually similar limits on donations.
The person or institution giving a gift is called the donor, and the person or institution getting the gift is called the donee.
In India, donations for charitable purposes are eligible for tax exemptions.
Donating in the name of others:
It is possible to donate in the name of a third party, making a gift in honor or in memory of someone or something. Gifts in honor or memory of a third party are made for various reasons, such as holiday gifts, wedding gifts, in memory of somebody who has died, in memory of pets or in the name of groups or associations no longer existing. Memorial gifts are sometimes requested by their survivors (e.g. "in lieu of flowers, contributions may be made to ABC Charity"), usually directing donations to a charitable organization for which the deceased was a donor or volunteer, or for a cause befitting the deceased's priorities in life or manner of death. Memorial donations are also sometimes given by people if they are unable to attend the ceremony.
Fundraising or fund raising (also known as "development") is the process of gathering voluntary contributions of money or other resources, by requesting donations from individuals, businesses, charitable foundations, or governmental agencies (see also crowd funding). Although fundraising typically refers to efforts to gather money for non-profit organizations, it is sometimes used to refer to the identification and solicitation of investors or other sources of capital for for-profit enterprises.
Traditionally, fundraising consisted mostly of asking for donations on the street or at people's doors, and this is experiencing very strong growth in the form of face-to-face fundraising, but new forms of fundraising, such as online fundraising, have emerged in recent years, though these are often based on older methods such as grassroots fundraising.
Many non-profit organizations take advantage of the services of professional fundraisers. These fundraisers may be paid for their services either through fees unrelated to the amounts of money to be raised, or by retaining a percentage of raised funds (percentage-based compensation). The latter approach is expressly forbidden under the Code of Ethics of the Association of Fundraising Professionals (AFP), a professional membership body. However, by far the most common practice of American non-profits is to employ a staff person whose main responsibility is fund raising. This person is paid a salary like any other employee, and is usually a part of the top management staff of the organization.
Some non-profit organizations nonetheless engage fundraisers who are paid a percentage of the funds they raise. In the United States, this ratio of funds retained to funds passed on to the non-profit is subject to reporting to a number of state's Attorneys General or Secretaries of state. This ratio is highly variable and subject to change over time and place, and it is a point of contention between a segment of the general public and the non-profit organizations.
The term "professional fundraiser" is in many cases a legislated term referring to third-party firms whose services are contracted for, whereas "fundraising professionals" or development officers are often individuals or staff at charitable non-profits. Although potentially confusing, the distinction is an important one to note.
Fundraising professionals, who have been employed with not-for-profit organizations as fundraisers or as fundraising consultants, for at least sixty (60) months, can become certified as a Certified Fund Raising Executive (CFRE). The CFRE credential is administered by CFRE International, an independent 501(c)6 whose sole mission is dedicated to setting standards in philanthropy through a valid and reliable certification process.
A specialty within the fundraising profession is the "grant professional." Grant professionals with at least three years experience, and other requirements, can become certified as Grant Professional Certified (GPC). The GPC credential is administered by Grant Professionals Certification Institute, whose mission is to strengthen the nonprofit sector's ability to pursue and maintain public sector and private sector funding by promoting competency and ethical practices within the field of grantsmanship. The certification process is designed to measure minimum knowledge and skills related to all aspects of grant development and management, including but not limited to such areas as grant research or pre-production, grant construction, grant reporting, public sector funding, private sector funding, ethics and grant accountability.
A fundraiser is an event or campaign whose primary purpose is to raise money for a cause, charity or non-profit organization. Fundraisers often benefit charitable, non-profit, religious, or non-governmental organizations, though there are also fundraisers that benefit for-profit companies and individuals.
One specific type of event is the "ad book" fundraiser, where those who wish to give funds to a fundraising group do so through the sponsorship or statement within a book of advertisements.
Online fundraising pages have become very popular for people taking part in activities such as marathon running. Those pages facilitate online payments in support of the charity event.
Popular charity fundraisers in major American cities include lavish black-tie gala benefit dinners that honor celebrities, philanthropists, and business leaders who help to fundraise for the event's goals through solicitations of their social and business connections.
Often called donor cultivation, relationship building is the foundation on which most fundraising takes place. Most development strategies divide donors into categories based on annual gifts. For instance, major donors are those that give at the highest level of the organization's fundraising scale and mid-level donors are in the middle.
More sophisticated strategies use tools to overlay demographic and other market segmentation data against their database of donors in order to more precisely customize communication and more effectively target resources. Research by Peter Maple in the UK shows that charities generally under invest in good marketing research spending around a quarter of what an equivalent sized for profit company might spend.
Donor relations and stewardship professionals support fundraisers by recognizing and thanking donors, and demonstrating the impact of their donations in a fashion that will cultivate future giving to nonprofit organizations.
Recent research by Adrian Sargeant and the Association of Fundraising Professionals' Fundraising Effectiveness Project suggests the sector has a long way to go in improving the quality of donor relations. The sector generally loses 50–60% of its newly acquired donors between their first and second donations and one in three, year on year thereafter. The economics of regular or sustained giving are rather different, but even then organizations routinely lose 30% of their donors from one year to the next.
A capital campaign is "an intensive fundraising effort designed to raise a specified sum of money within a defined time period to meet the varied asset-building needs of an organization". Asset-building activities include the construction, renovation or expansion of facilities (for example, a new building), the acquisition or improvement of land, equipment, or other items, and additions to a financial endowment. Two characteristics set capital campaigns apart from other forms of fund-raising activities. First, "the gifts solicited are much larger than those generally sought during an annual fund". Second, "pledges are emphasized as commitments payable over a number of years convenient to the donor or through the transfer of appreciated real or personal property".
Various types of capital campaigns have been identified. The traditional "brick and mortar" campaign, focused on building construction or improvements, was considered a "once in a lifetime" campaign in the past because of the ambitious goals of the campaign. Today, however, organizations frequently schedule capital campaigns every five to ten years, and "the megagoals announced by large institutions often are the result of 'counting everything' during a five-to seven-year campaign period".
A second type of capital campaign is the comprehensive, integrated, or total development campaign, which aims for a longer fund-raising program based on a long-term analysis of the organization's needs and direction. This form of capital campaign includes ordinary fund-raising actives, such as annual gift drives, which are "slower-paced and lack the intensity of the traditional capital campaign".
We can't solve problems by using the same kind of thinking we used when we created them.