Charity Must Make Itself a Market

Giving has become a major currency in the global economy yet remains an asset whose true worth and potential are undervalued and overlooked.

Government and business pay lip service to the important role charity plays in our communities and economy, yet treat it as a second-tier vehicle for social change, one that requires special treatment.

Nonprofits and philanthropic organizations reinforce the perception they are marginal players by acting as if their good intentions entitle to them to public and private investment, and free them of the need to compete in the marketplace under the same pressures and rules that other businesses face.

To increase their impact, people and organizations working and investing in the charitable marketplace need to be brutally honest about the value they add, the challenges they face, and their need to make their own way.

By moving beyond their sense of entitlement, confronting their strengths and weaknesses, and designing smart business models, nonprofits can more effectively engage customers, investors and partners and serve as leaders for change.

And nonprofits have a great story to tell.

Whether addressing problems at home or abroad, giving is built into Americans’ DNA.

Americans see problems and give their time, know-how and money to improve and enrich their communities.

As individuals and through their families and businesses, Americans create and invest in nonprofit and philanthropic organizations to address urgent social needs.

In 2007, charitable giving in the U.S. exceeded $300 billion for the first time, with individuals giving nearly 75 percent of those dollars, and bequests accounting for nearly 7 percent more, according to Giving USA 2008.

And in 2006, over 61 million individuals volunteered, representing over one-fourth of the U.S. population, with 15 million Americans volunteering on an average day, and the average volunteer serving over 200 hours a year, according to The Nonprofit Almanac 2008.

The U.S. nonprofit sector also is big, diverse and growing, the Nonprofit Almanac says, accounting for five percent of gross domestic product, over 8 percent of wages and roughly 10 percent of job.

In addition, the estimated value of volunteer time equals nearly half the wages nonprofits pay.

Nonprofit wages and employment both have been growing in their share of the economy, and nonprofit jobs in recent years have been growing three times faster than the rest of the economy.

Beyond those impressive numbers, the resources exchanged in the charitable marketplace simply make our communities better places to live and work.

But until nonprofits and givers get over their sense of entitlement and start building enterprising business models that break down the walls to true collaboration among nonprofits and with business and government, the charitable marketplace will remain a marginal force for social change.

Todd Cohen, a veteran news reporter and editor, is editor and publisher of Philanthropy Journal, an online newspaper published by the A.J. Fletcher Foundation in Raleigh, N.C. Cohen has taught nonprofit reporting and media relations at the University of North Carolina at Chapel Hill and at Duke University, and regularly speaks on the topics of nonprofit media relations and trends in the charitable world.

Read more stories by Todd Cohen.