“Checkbook philanthropy” breeds donor dissatisfaction

A report from UBS Wealth Management Americas found that nine in 10 millionaires say they make significant donations to charity, yet only 20% rate their giving approach as “extremely” or “very” effective. While the millionaires surveyed consider giving to be important, they often give haphazardly, in response to requests that come in. Only one in 10 incorporates philanthropic giving into their financial planning. This “checkbook philanthropy” translates into lower satisfaction with the effect the donations have on the donors’ communities and broader society.

Notably, most millionaires see giving time to be as valuable as giving money and find the former more personally meaningful. And investors whose friends and family also are involved reap more satisfaction from the impact of their philanthropy than those who give or volunteer on their own.

So, what can nonprofits do if they want to address these findings? Encourage contributors to donate their time as well as their money. Also ask them to recruit family and friends for volunteer work and donations.

Nonprofit CEO pay on the rise

The Chronicle of Philanthropy’s annual compensation survey has found that executives of large nonprofits and foundations are starting to see bigger raises. This follows a long dry period during which the median annual increases basically just kept up with inflation.

For the 82 organizations on which the Chronicle had 2011 and 2012 data, the median change in salary was 4.9%. Since the end of the financial crisis in 2009, not-for-profits have increased top executive compensation modestly — on average about 3% per year. But, excluding the organizations that reduced pay or kept it flat, the remaining organizations surveyed boosted their CEO pay in 2012 by 6.8%. The survey also found 18 CEOs with compensation exceeding $2 million. In comparison, chief executives of S&P 500 companies saw median compensation rise 9.5% in 2013, to $10.1 million.

New tool assigns dollar values to social projects

Based on social-science research, a new online tool designed by the Low Income Investment Fund (LIIF) puts dollar values on the social impact of investments in areas such as affordable housing, child care centers and improved schools in impoverished neighborhoods. LIIF developed its “social impact calculator” to assess how effective it is in creating opportunity and reducing inequality.

The calculator estimates the monetized impact of investments. For example, the impacts of a high-performing school would include boosted lifetime earnings, reduced odds of incarceration and decreased health care costs for students. LIIF is making the calculator and its methodology fully accessible to others — or “open source” — at liifund.org/calculator.