• Working Papers about Giving USA
• Working Papers from the Center on Philanthropy Panel Study
• Working Papers from the Nonprofit Overhead Cost Study
• Working Papers from the Lake Institute on Faith and Giving
• Working Papers on General Research about Philanthropy or Nonprofit Management
• Recent work by Philanthropic Studies Faculty

Working Papers about Giving USA

1.Estimating charitable giving by will bequest for Giving USA
Melissa Brown, Patrick Rooney, John J. Havens
Presented at the annual conference of the Association for Research on Nonprofit Organizations and Voluntary Action (ARNOVA),  November 18, 2005 in Washington D.C.
Summary:  In a typical year since 2000, Giving USA has estimated that living individuals contributed 75 percent of total charitable gifts and that estates contributed about 7 or 8 percent, with institutional donors donating the balance. The estimating procedure used for estate contributions relies extensively on amounts claimed by estate tax returns as deductions for charitable contributions. Giving USA supplements the tax return data with an estimate of giving by estates that fall below the tax filing threshold.  As the estate tax filing threshold began increasing and tax rates began decreasing in 2001, a number of authors (Joulfaian 2000; Gale & Bakija; Greene and McClelland) predict declining charitable contributions from bequest gifts. With fewer estates tax returns filed, and the possibility that none will be filed after 2010, the impact of the reduced tax rates must be measured using new methods that do not rely so extensively on tax return data.  Giving USA  has been investigating and continues to investigate alternative methods to estimate charitable bequests that do not rely so heavily on estate tax return data. This paper reports the results of this effort and describes the bequest estimating procedure adopted for use in Giving USA beginning with the 2005 edition. This procedure incorporates survey results showing bequest amounts received at higher educational institutions and estimates charitable bequests made by estates below the federal filing threshold. The paper concludes that to track changes resulting from lowered tax rates and higher filing thresholds adequately, alternative data sources will need to be developed.

2. “Estimating Charitable Deductions in Giving USA"
Partha Deb, Mark Wilhelm, Melissa Brown, Patrick Rooney
Final report is published in the Nonprofit and Voluntary Sector Quarterly, Vol 32, No. 4, 2003, pp. 548-567.
Summary: The Center on Philanthropy and the Giving USA Advisory Council on Methodology periodically review the estimating procedures used in Giving USA and make revisions as approved by the Advisory Council. A revision was made to the procedure used to estimate individual giving in Giving USA 2002. This is a technical revision and this paper provides details about the revision and why it was made.

3.“Methodologies Used to Develop Estimates of the Sources of Giving and Contributions by Type of Recipient in Giving USA 2001 for Charitable Contributions in 2000”  Mimeo, IUPUI – September 2002.
Summary: Giving USA, a publication of the AAFRC Trust for Philanthropy, estimates chartable contributions using a number of resources, including tax return information provided by the Statistics of Income (SOI) division of the Internal Revenue Service and studies conducted by other organizations. To estimate the distribution of giving by type of recipient organization (by subsector), Giving USA surveys nonprofit organizations each year. This paper reviews the methodologies used for each source estimate and for the subsector estimates.
      In general, steps used to develop the estimates are summarized here briefly for those wishing an overview and presented later in more technical form in the order in which they are performed. The technical discussion enables someone using the same types of data to replicate the steps used to generate the estimate.

4. “Reconciling Estimates of Religious Giving"
Melissa Brown, Patrick Rooney, Joseph Claude Harris. Mimeo, IUPUI
Summary: Since religious organizations have long been the single largest type of recipient of American giving, the authors undertook in 2003 to examine the Giving USA estimating procedure for giving to religion and compare Giving USA estimates with other approaches for estimating contributions to religion. The yearbook of philanthropy since 1955, Giving USA uses research done by other organizations to estimate giving to religion. Two studies form the basis of Giving USA's estimates. The first is a report from INDEPENDENT SECTOR, which used a national survey of congregations and estimated total giving to religion of $50 billion for 1986. The second is the annual rate of change in giving to religion, which is derived from denominational reports compiled annually by the National Council of Churches of Christ-USA. Since 2002, data about Catholic parish giving has been incorporated into the denominational list that is the basis of the estimated rate of change in giving to religion year to year.

5.“Estimating Corporate Charitable Giving”
Patrick Rooney, Melissa Brown, William Chin
Summary: Estimating corporate giving is an important part of the estimation process for Giving USA and is used independently by a variety of practitioners, policy makers, business leaders, and the media. While Giving USA has changed its estimation process over time, it has never previously examined what might be the "best" model for these estimations. We tested hundreds of permutations and combinations of variables and specifications that were used historically and that were suggested to us by scholars and practitioners from around the country. This paper summarizes the problem, the process and the results.

Working Papers from the Center on Philanthropy Panel Study (COPPS)

Data used in the following working papers come from the Center on Philanthropy Panel Study (COPPS), a module of the Panel Study of Income Dynamics (PSID) conducted by the University of Michigan’s Institute for Social Research. COPPS is a privately-funded series of questions on the PSID that began in 2001 and continues with generous contributions from donors.

1. The Intergenerational Transmission of Generosity, February 2008 working paper (forthcoming in the Journal of Public Economics)
Wilhelm, Mark, Eleanor Brown, Patrick Rooney, and Richard Steinberg

Using the Center on Philanthropy Panel Study and data from two generations of the same families, we find that religious giving of parents is strongly correlated with the religious giving of their adult children. The correlation is as strong as the association of the income and wealth of parents and their adult children. The correlation for secular giving is smaller than for religious giving. It is about the same level of correlation that is found among parents and their adult children for consumption expenditures generally, things such as the amount spent weekly on groceries or dining out.

2. Who decides in giving to education? A study of charitable giving by married couples, International Journal of Educational Advancement, Vol. 7, No. 3.
Patrick Rooney, Eleanor Brown, and Debra Mesch

This work examines the socio-demographic determinants of giving to education, including data available about "who decides" when a married couple makes charitable gifts. After controlling for other factors, the level of education for each spouse is positively associated with giving to education. As expected income and family wealth are also positively associated with giving to education. Higher levels of education are associated with larger contributions to education (any level of education), which is also as expected. The number of children living at home is another determinant of giving to education (more children at home means more giving, all other factors being equal). Men have little or no influence on the decision to give to education or on the amounts given to education. When the woman is the decision-maker about charitable giving, there is more likely to be a positive effect on giving to education and on the amount given to education.

3. Family Structure and Income during Childhood and Subsequent Prosocial Behavior in Young Adulthood
Robert Bandy and Mark Ottoni Wilhelm

There is extensive research about how children learn "prosocial behavior," which includes giving and volunteering, but few of those studies have looked at what happens within a family in the years the child is maturing. Prior research looks at family dynamics and the impact on the child's well-being, but that research does not consider prosocial behavior. Mark Ottoni Wilhelm and Robert Bandy have used the Panel Study of Income Dynamics to examine events that occurred in participants' youth and their current giving and volunteerng. Their results point to adolescence as a sensitive stage in the development of giving and volunteering. Changes in family structure from divorce or remarriage and low income during adolescence are each associated with lower giving when that young person matures, after holding constant income, education, and other factors associated with giving. Low income during adolescence is negatively associated with volunteering during young adulthood.

4. Donor Stability: Findings from The Center on Philanthropy Panel Study

We have observed that in annual surveys of households, approximately two-thirds of American households report being donors to charities in the prior year. We anticipate that many of them are the same donors year to year. However, until the Center on Philanthropy Panel Study (COPPS) data were available for the exact same households from several years, this hypothesis was unable to be tested. In this presentation, we describe the characteristics of “repeat donors” (give in two of the three years surveyed) vs. “occasional donors” (give in one of the three survey years) vs. “persistent donors” (give in all three years). We also examine factors that explain whether or not a household is likely to be a donor in all three years available for analysis. Finally, we investigate which factors are associated with donors becoming non-donors during each of the timeframes studied. These are important to understand from a practitioner and research perspective.

5. Changes in Religious Giving Reflect Changes in Involvement: Age and Cohort Effects in Religious Giving, Secular Giving, and Attendance
Mark O. Wilhelm, Patrick M. Rooney and Eugene Tempel
All at Indiana University-Purdue University Indianapolis
Published in the Journal for the Scientific Study of Religion, June 2007.

Wilhelm, Rooney, and Tempel present two patterns over time in religious giving, secular giving, and religious service attendance. Data from the 1974 National Study of Philanthropy, the 2001 COPPS, and the 1972-2002 General Social Survey are used to describe giving patterns. The first pattern describes the pre-war group (born 1924-1938) as they aged between middle adulthood (ages 35-49) and their senior years (ages 62-76). The second pattern compares the baby boom group (born 1951-1965) in middle adulthood to the middle adulthood pre-war group. Patterns are presented for all families as well as separately for Catholic and Protestant families using data from three sources.

The patterns indicate the pre-war group increased their religious giving and attendance as they aged, but—compared to the pre-war group in middle adulthood—baby boomers give less than expected to religion and attend religious services less. Baby boomer giving is noticeably less-than expected and attendance noticeably lower among Catholic boomers, but less so among Protestant boomers. The authors argue that together all these patterns are evidence that changes in religious giving reflect changes in religious involvement.

6. “Patterns of Giving and Volunteering in COPPS 2001” Richard Steinberg and Mark Wilhelm, IUPUI
Summary: This paper examines giving compared across generations, religious affiliation, race, and education. Richard Steinberg and Mark Wilhlem, both of the Department of Economics in the School of Liberal Arts at IUPUI, examined giving data in the COPPS wave of 2001. They found that controlled for other variables, older households (head of household born before 1945) give more than Boomers (born 1945-1964) and “Gen X” (head of household born since 1964). The difference was statistically significant for giving to religion and total giving, but not for giving to secular causes.
     Controlled for other variables, households headed by someone who reports being Protestant gave significantly more to religion than households headed by someone in one of the other faith groups (Catholic, Jewish, No Religion, and Other). Households headed by someone who reported being Jewish give nearly 40 percent more to secular causes as households headed by someone of another faith.
     With controls for other variables, the differences in giving by households headed by a member of a racial or ethnic minority are not statistically significant. Also with controls for other variables, the importance of education is pronounced. The researchers found statistically significant changes in the amount given with every increase in educational level (no high school degree; high school; some college; college degree; post-graduate degree).

7. “Giving: The Next Generation – Parental Effects on Donations”Mark Wilhelm, Rich Steinberg, Mimeo, IUPUI
Summary: Adult children whose parents are donors are far more likely to be donors themselves than are adults whose parents are not currently donors. Adults whose parents give to religion are, when controlled for other factors such as income and education, 11 percentage points (a large difference) more likely to give to religion than are adults whose parents do not contribute to religion. The difference is the same for non-religious giving – adults whose parents contribute to non-religious causes are 11 percentage points (controlled for other variables) more likely to give than are adults whose parents are not donors to non-religious causes.

8. “Tracking Giving Across Generations” Nov. 2003
Rich Steinberg and Mark Wilhelm, Mimeo, IUPUI
Summary: In an article prepared for New Directions for Philanthropic Fundraising, Richard Steinberg and Mark Wilhelm summarize the type of data collected in COPPS and provide at least four areas of fundraising practice that can be improved with knowledge gained about donors from COPPS: targeting, predicting, benchmarking, and persuasion.

9.“Inheritance and Charitable Donations” 2002.
Richard Steinberg, Mark Wilhelm, Eleanor Brown, and Patrick Rooney, Mimeo, IUPUI
Summary: Richard Steinberg, Patrick Rooney, Eleanor Brown (of Pomona College), and Mark Wilhelm find that giving from inherited wealth rises slowly compared to giving from non-inherited wealth, assuming both forms of wealth increase comparably. This is true for total giving and for gifts to religion, combined causes, people in need, health, education, and other causes. However, when an individual receives income that derives from inherited wealth (e.g., dividends or rents received), the individual gives from that income about the same as he or she gives from labor income. However, having income derived from inherited wealth increases the likelihood that an individual will donate at all. Transfer income (from government to an individual or from one individual to another) has either a small or no apparent effect on donations.

10.“The Intergenerational Transmission of Generosity”
Mark Wilhelm, Eleanor Brown, Patrick Rooney, and Richard Steinberg. 2004. Mimeo, IUPUI.
Summary: The Center on Philanthropy Panel Study (COPPS) has provided the first data on the giving of parents and their children.

• COPPS has found that adult children whose parents give currently are much more likely to be donors themselves than are children whose parents do not give currently; they are also far more likely to give more money than children of non-donors.
• In addition, parents' religious giving emerges as an engine for religious generosity, affecting the religious giving of their adult children, but having no effect on children's "secular" giving (e.g., to United Way, help the poor, education, etc. ).
• No relationship exists between the adult children's religious affiliation and their secular giving (except among those of the Jewish faith, who also make large donations to secular causes).
• There is a significant relationship between parents’ secular giving and their adult children's secular giving; Parents who give generously to secular causes have adult children with higher probability of giving to secular causes and who give at higher amounts than are seen among adult children whose parents do not give as generously to secular causes. This suggests a transmission of values for secular giving.

11. Economist Analyzes Differences in Six Major Surveys of Giving
Mark O. Wilhelm, associate professor of economics and philanthropic studies at IUPUI, in "The Distribution of Giving in Six Surveys" examines six major household surveys of giving and attempts to trace the differences in their measurements to underlying differences in survey methodology. Among the six surveys are the oldest national household survey; a survey that is in widespread use among researchers, practitioners, and policy-makers; and a new survey, which is the initial wave of the first panel survey of giving. Wilhelm expects that his results should be helpful to analysts trying to decide which dataset is best-suited to address particular questions.
     Preliminary analysis of the results from the newest survey, the Center on Philanthropy Panel Study (COPPS), show that nearly every respondent (98.5 percent) answered all the survey questions about charitable giving. In other surveys this figure can be as low as two-thirds. Just as important, the COPPS seems to be the only survey to obtain measurements of giving, among respondents who contribute very large amounts, that are similar to those obtained by the Filer Commission's National Study of Philanthropy (1974). The success of the COPPS in these two dimensions is probably due to the design of the
questionnaire, the use of interviewers experienced in asking about financial issues, and the respondents who, through their experience as participants in a long panel study, also are accustomed to answering questions about financial matters. These advantages, combined with the sample size, make the PPS a good tool for evaluating giving.

12. Parental Influence on Charitable Giving
Patricia Hughes and William Luksetich, both of St. Cloud University, St. Cloud, Minnesota. This working paper was prepared for the 2005 conference of the Association for Research on Nonprofit Organizations and Voluntary Action.

In this paper, authors Hughes and Luksetich study the impact of parental influence on the philanthropic giving and volunteering of their children. Four factors are highlighted as possible methods of the transmission of values: parental income, generosity, volunteering, and religious affiliation. The research finds that the generosity of parents significantly influences children’s giving and volunteering, but social-economic status also plays a part. Also, volunteering and religious affiliation are found to not have a significant impact on the children’s charitable behavior.

13. Cultural Preconditions of Giving and Volunteering: Occupational/Industry/Professional Influences
Natalie J. Webb of the Naval Postgraduate School, Monterey, California Rikki Abzug of New School University, New York, New York

Working paper prepared for the 2005 Annual Conference of the Association for Research on Nonprofit Organizations and Voluntary Action

Webb and Abzug explore the role of occupation, profession, and/or industry in explaining the varying rates of individuals’ giving and volunteering (as opposed to households). In order to model the preconditions of giving and volunteering, the authors look at patterns through institutional cultures defined by occupation, profession, and/or industry. Variables are added that capture the pressures individuals face as members of occupations, professions, and/or industries. Additional factors that are explored include religious affiliation, age, whether children are present in the family unit, racial background, years of formal education, and gender.

14. Altruism or Egoism? Charitable Giving and the Federal Income Tax
Lori Stuntz, Ph.D. Portion of a dissertation prepared in the Dept. of Economics, University of Texas at Austin

In this paper Lori Stuntz studies the effect of income tax deductions on charitable giving. A comparison is made for donations that benefit the poor and donations that benefit the rich. The author generates conditions that explain each type of giving by using a theoretical model. A variety of tax laws are analyzed for their effect on giving. The author finds that tax deductions encourage more donations to charities that benefit the poor.

Working Papers from the Nonprofit Overhead Cost Study

1.  “How Fundraising is Carried Out in U.S. Nonprofit Organizations” Patrick Rooney, Mark Hager, Tom Pollak.
International Journal of Nonprofit and Voluntary Sector Marketing, Vol 7, No. 4, 2002, pp. 311-324.
Summary: A substantial number of nonprofit organizations in the USA report inflows of charitable contributions or grants without expenditures allocated to fundraising costs. This observation raises questions about how fundraising is carried out. Based on a survey of U.S. charities, the paper observes that nonprofit organizations use a range of internal capacities and external relationships to conduct their fundraising. The use of staff members dedicated to fundraising is common, but much fundraising is still carried out by executive directors, volunteers and board members. Also, a substantial number of organizations engage external entities, including federated campaigns, support organizations and professional fundraising firms to generate contributions. Results are based on the Nonprofit Overhead Cost Study.

2.   “Fundraising Costs”
Patrick Rooney, Joseph Cordes.
In Effective Economic Decision-Making for Nonprofit Organizations, New York: The Foundation Center, 2004. Dennis Young (ed.).
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Summary: Editor Dennis R. Young offers practical guidelines to help nonprofit managers maximize the effectiveness of their valuable resources. Nonprofit leaders must advance their mission while balancing the agendas of trustees, funders, government, and staff. Here, expert authors explore the core operating decisions that face all organizations and provide solutions that work for nonprofits of any size.

3. “Paying for Not Paying for Overhead”
Patrick Rooney, Ken Wing, Mark Hager, Tom Pollak.
Foundation News and Commentary 
Summary: Article published in Foundation News and Commentary detailing the results of the Nonprofit Overhead Cost Study. More details about the cost study are located on the Nonprofit Overhead Cost Study web site.

4. “Understanding Management and General Expenses in Nonprofits”
Patrick Rooney, Tom Pollak, Mark Hager
Summary: There has been growing coverage by the press and the accounting profession about how nonprofits report their management and general costs. There has also been growing attention by some donors, perhaps made most famously by claims by some donors that nothing should go to administration. While this area of nonprofit management has caught the attention of the public, it has largely escaped the research lens of scholars. This paper is a first step to understanding and explaining what management and general costs look like in the nonprofit sector and whether or not various institutional characteristics such as mission, size, age, sources of revenues, and/or accounting practices can help explain some of the variation in management and general expenses. We find that these institutional characteristics do matter quite a bit in explaining differences in management and general costs in nonprofits. For more information, please visit the Nonprofit Overhead Cost Study web site.

5. “Variations in the Cost of Fundraising in Nonprofits”
Tom Pollak, Mark Hager, Patrick Rooney
Summary: The desire of individual donors and institutional funders to know how their money is spent, along with the increasing availability of financial information on nonprofit organizations has increased the use and abuse of financial measures of nonprofit efficiency. We focus on two measures: the proportion of budget spent on non-program expenses and the ratio of fundraising expenses to contributions. We hypothesize variations in these measures by organizational size, age, and subsector, and we test these hypothesis with data reported by the organizations to the Internal Revenue Service. We conclude that the ratio measures vary by organizational characteristics, a factor both widely cited by watchdog groups and overlooked by agents that attempt to apply the measures to nonprofit organizations without regard for systematic variation. We also conclude that other basic factors besides size, age, and subsector are important in explaining the relative efficiencies of nonprofit organizations. For more information, please visit the Nonprofit Overhead Cost Study web site.

6.  “Donating to Charity: A Guide” 2004  The Urban Institute and Indiana University
Summary: Are you choosing the charities you donate to, or are they choosing you?  Are you responding to telephone and mail appeals you receive, or are you deciding what’s important to you?  The information in this guide will help you make informed decisions about donating to a charity. For more information, please visit the Nonprofit Overhead Cost Study web site.

7.  “Lessons for Boards: from the Nonprofit Overhead Cost Project” 2004. The Urban Institute and Indiana University
Summary: Many nonprofit organizations have problems accurately tracking and reporting their overhead expenditures in financial statements. Is your organization one of them?  This guide reviews major findings from a national study and makes recommendations in four areas:  Financial controls, Financial reporting, Financial staffing, and organizational effectiveness. For more information, please visit the Nonprofit Overhead Cost Study web site.

8. “Special Issues in Nonprofit Financial Reporting: A Guide for Financial Professionals” 2004. The Urban Institute and Indiana University
Summary: Nonprofit managers and their donors rely on functional expense reporting for both management and giving decisions. However, many nonprofit organizations misreport these expenses. Research findings fall into four areas:  Functional expenses, capital gifts, in-kind donations, IRS Form 990. For more information, please visit the Nonprofit Overhead Cost Study web site.

9.  “What We Know About Overhead Costs in the Nonprofit Sector”
Brief #1, February 2004, Urban Institute and Indiana University
Summary: Brief #1 summarizes findings from IRS Form 990 data and overhead cost survey data, concluding that a surprisingly high percentage of nonprofit organizations (37%) with private contributions of $50,000 or higher reported no fundraising costs. The brief also discusses the staffing patterns of nonprofit organizations' fundraising efforts and the fundraising tactics that they employ. For more information, please visit the Nonprofit Overhead Cost Study web site.

10. “Who Raises Contributions for America’s Nonprofit Organizations?”
Brief #2, July 2004, Urban Institute and Indiana University
Summary: Brief #2 summarizes findings from the overhead cost study survey, conducted in the fall of 2001. It describes the recent growth of use of staff members whose primary responsibility is fundraising. Even in organizations with such a staff member, involvement of other staff, volunteers, and board members in fundraising is common. Additionally, some organizations receive fundraising support from partner organizations, either other community organizations that share their funds or professional solicitation firms that conduct fundraising campaigns. For more information, please visit the Nonprofit Overhead Cost Study web site.

11. “Getting What We Pay For: Low Overhead Limits Nonprofit Effectiveness”
Brief #3, August 2004, Urban Institute and Indiana University
Summary: Brief #3 is the first of two that summarize results from detailed case studies of the financial management of nine nonprofit organizations. It focuses on the relationship between spending on administration and fundraising and the effectiveness of nonprofit organizations in carrying out their missions. Smaller organizations tended to invest less in organizational infrastructure, resulting in conditions that compromised their effectiveness. Part of the reason why these organizations invested less in infrastructure involved their reliance on grants with limits on how much could be spent on overhead costs. For more information, please visit the Nonprofit Overhead Cost Study web site.

12. “The Quality of Financial Reporting by Nonprofits: Findings and Implications”
August 2004. The Urban Institute and Indiana University
Summary: Brief #4 is the second of two briefs that summarize results from detailed case studies of the financial management of nine nonprofit organizations. It focuses on public financial reporting and addresses issues such as weak methods for allocating staff salary costs to program, administrative, and fundraising expenses; the need for greater sophistication in accounting for capital gifts and in-kind donations; and the effects of unique IRS reporting rules on overhead and fundraising cost ratios. This brief concludes that simplistic efforts to assess and compare public charities based on their public financial reports may lead to flawed conclusions. For more information, please visit the Nonprofit Overhead Cost Study web site.

13. “The Pros and Cons of Financial Efficiency Standards”
August 2004, The Urban Institute and Indiana University.
Summary: Brief #5 discusses the use of financial efficiency ratios to evaluate and compare nonprofit organizations. Recent technological advances have made nonprofit financial reports and electronic databases widely available to analysts, further popularizing financial comparisons. In this brief, we summarize both the advantages and dangers of such analyses. The chief advantage is that managers and donors can productively use financial comparisons for decision making. The chief disadvantage is that analysts tend to over-rely on these measures when making judgments regarding the effectiveness or donation-worthiness of nonprofit organizations. For more information, please visit the Nonprofit Overhead Cost Study web site.

14. “Help Your Nonprofit Clients Improve Their Accounting for Capital and In-Kind Donations”
Patrick Rooney, Kennard Wing, Teresa Gordon, Mark Hager, Tom Pollak
Summary: Many nonprofit organizations, especially smaller ones, lack skilled financial professionals either on staff or on the board. Auditors and other external CPAs are in an excellent position to help these clients present their financial results in ways that will avoid misunderstanding and confusion on the part of financial statement users both inside and outside the client organization. Two areas that have created special problems for nonprofits are accounting for large capital donations and for in-kind donations. We’ll look at the problems first; then show you accounting solutions you can bring to your clients.

15.“Functional Expense Reporting for Nonprofits: The Profession’s Next Scandal?”
Patrick Rooney, Kennard Wing, Teresa Gordon, Mark Hager, Tom Pollak
Summary: Enron and subsequent corporate scandals sent a shock wave through the accounting profession that has yet to subside. The profession has been working hard ever since to overcome the damage to its prestige and to the public’s trust in it. The last thing CPAs need is a new scandal. Unfortunately, nonprofit financial reporting is a ticking time bomb just waiting to explode. The Nonprofit Overhead Cost Study project found serious and widespread errors in IRS Forms 990 and audited financial statements prepared or attested to by CPAs. The dollar values may be lower than for large, publicly traded companies, and the errors less likely the result of malfeasance, but these errors can and ought to be corrected. This article shows you where the problems are, and what you can do about them. For more information visit the Nonprofit Overhead Cost Study web site.

16. “Nonprofit Organizations and Functional Cost Allocations: The Auditors’ Perspective”
Patrick Rooney, Teresa Gordon, Elizabeth Keating, Tom Pollak
Summary: Fundraising and administrative costs reported by nonprofit organizations are often challenged by the media as excessive. At the same time, academic research suggests that these costs are systematically understated in the financial statements and that many tax-exempt organizations report zero fundraising costs. Prior research on this topic includes surveys of nonprofit organizations and case studies. Since auditors are responsible for providing an opinion on whether the financial statements are fairly presented, one might expect that the auditors would develop a thorough understanding of a nonprofit’s overhead costs and help ensure that such costs are fairly and accurately presented. This study reports on interviews with 50 randomly selected accounting firms that perform nonprofit audits. Respondents generally gave professionally acceptable answers indicating that audit procedures test for appropriateness of overhead allocations. Almost all felt that the cost allocation was the responsibility of the client. About half rated the internal controls of their nonprofit clients as strong. Materiality issues could explain a portion of the zero-reported fundraising cost issue. For more information visit the Nonprofit Overhead Cost Study web site.

Working Papers from The Lake Institute on Faith and Giving

1. "Changes in Religious Giving Reflect Changes in Involvement: Life-Cycle and Cross-Cohort Evidence on Religious Giving, Secular Giving, and Attendance” June 2005.
Mark Wilhelm, Patrick Rooney, and Eugene Tempel
Summary: This paper describes religious giving, secular giving, and religious service attendance patterns over time. Two types of patterns are described: a life-cycle pattern for the pre-war cohort (born 1924-1938) between their middle adult (ages 35-49) and senior (ages 62-76) years, and a cross-cohort pattern comparing their middle adult years with the middle adult years of the baby boom (born 1951-1965). Patterns are described for all families as well as separately for Catholic and Protestant families. We use data from three sources to describe the patterns.
      The patterns indicate little change in religious giving and attendance over the pre-war cohort’s life-cycle, but compared to the pre-war cohort in middle adulthood, baby boomers give less-than-expected to religion and attend less. Baby boomer giving is noticeably less than expected and attendance noticeably lower among Catholic boomers, but not as much among Protestant boomers. We argue that together all these patterns are evidence that changes in religious giving reflect changes in religious involvement.

Working Papers on General Research on Philanthropy or Nonprofit Management

1. “Presidential Satisfaction with Development Programs in Research and Doctoral Universities”
Patrick Rooney, Gary Bouse, Gene Tempel
Paper published inThe CASE International Journal of Educational Advancement, Vol. 3, No. 2, 2002, pp. 133-148.
Summary: The increasing costs of higher education and the decreasing willingness of taxpayers to support it have amplified the importance of fundraising in the modern university. The (dis)satisfaction of the university president with his/her development program can have profound ramifications for the success of the program and the careers of the development professionals. This paper addresses a gaping hole in the academic and practitioner knowledge base: What makes presidents satisfied and/or dissatisfied with their institution’s development efforts and how do they evaluate the performance of the development program.

2. “Executive Compensation and Gender: A Longitudinal Study of a National Nonprofit Organization”
Patrick Rooney, Debra Mesch
Summary: The results of this study indicate that there are significant differences in executive compensation between men and women in this national nonprofit organization. These results suggest that the compensation differences between men and women are a result of longer tenure, better performance and serving in larger organizations. These results were further supported when controlling for significant interactions between gender and human capital variables; the coefficient for gender remains large even when including the significant interaction terms. In general, our results indicate that women are paid significantly less than men. What we do not know, however, is information about job interruptions for the female CEOs. The literature is clear that job interruptions (employment gaps and leaves of absence) for both males and females can affect long-term compensation. Finally, we cannot claim that our study is evidence for a prima facie case of discrimination. Our study does show a pattern consistent with discriminatory behavior—holding constant the human capital variables traditionally found to explain discrepancies in pay. But our pattern is one in which these differences get larger as organizational size increases—except for the largest organization. Furthermore, all of the hire, fire, and pay decisions are made by local boards, each acting autonomously.

3. “A Measurement of Volunteering:  A Methodological Study Using Indiana as a Test Case”
Kathryn Steinberg, Patrick Rooney, William Chin
Final version published in Nonprofit and Voluntary Sector Quarterly, Vol. 31, No. 4, 2002, pp.484-501
Summary: How much does survey methodology matter when measuring volunteering?  Every four years the Center on Philanthropy at Indiana University conducts a telephone survey (called “Indiana Gives”) of the giving and volunteering behaviors of Indiana citizens. In a recent wave of the Indiana survey, conducted in October and November 2000, we asked eight groups of approximately 100 randomly selected Indiana residents to complete one of eight surveys related to giving and volunteering. We found that the longer and more detailed the module, the more likely an individual was to have provided volunteer service in the past year, and the higher the average number of hours provided, even after controlling for differences in age, income, household status, itemization status, and race. Further research is needed to ascertain whether there may be a “point of diminishing returns” in terms of optimal survey length and detail, and whether recall is inhibited for high-end volunteers only.

4.  “A Methodological Comparison of Giving Surveys: Indiana as a Test Case”
Patrick M. Rooney, Kathryn Steinberg, Paul Schervish
Published in Nonprofit and Voluntary Sector Quarterly, Vol. 30, No. 3, 2001, pp.551-568.
Summary: Every four years the Center on Philanthropy at Indiana University conducts a telephone survey (called “Indiana Gives”) of the giving and volunteering behaviors of Indiana citizens. As we prepared to conduct the Indiana Gives survey for the year 2000, we asked a larger methodological question: How much does survey methodology matter for generating accurate measures of giving and volunteering?  In this most recent wave of the Indiana survey, conducted in October and November 2000, we asked eight groups of approximately 100 randomly selected Indiana residents to complete one of eight surveys related to giving and volunteering. We found that the longer the module and the more detailed prompts it contained, the more likely a household was to recall that it made any charitable contribution and the higher the average level of its giving. These differences persist even after controlling for differences in age, educational attainment, income, household status, race and gender.

5. “How Do Need, Capacity, Geography, and Politics Influence Giving?”
Kathryn Steinberg, Patrick Rooney, Wolfgang Bielefeld.
A version of this paper appeared in Gifts of Time and Money: The Role of Charity in America’s Communities. Lanham, MD: Rowman & Littlefield. Arthur Brooks, Editor.
Summary: In this paper we seek to shed light on the question: “What are the types of factors which influence individual giving?”  In recent years there has been a sustained effort, in and out of academia, to address this question. While we have learned a number of things, large areas have yet to be explored. For example, almost all work has been done on the impact on giving of individual factors, such as education, gender, race, income, etc. While these are clearly relevant, it is important to remember that people are also embedded in larger contexts. So, while their personal income will definitely influence their level of giving, the wealth or poverty (measured by average income) of their city might also have a significant effect on how much they give overall and to certain causes.

6. “Response Rates for Mail Surveys of Nonprofit Organizations: A Review and Empirical Test”
Patrick Rooney, Mark Hager, Sarah Wilson, Tom Pollak
Published in Nonprofit and Voluntary Sector Quarterly, Vol. 32, No. 2, 2003, pp. 252-267.
Summary: The failure of a substantial portion of mail survey recipients to respond to invitations to participate in research projects raises issues of nonresponse error. Because this error is difficult to quantify, survey researchers seek high rates of return to signal legitimacy and reduce questions regarding nonresponse bias. Research on survey method indicates that the design of the survey research process has a measurable influence on the rate of survey returns. This article focuses on three aspects of research design that are expected to influence mail survey returns in surveys of nonprofit organizations: questionnaire complexity, use of Federal Express versus standard mail, and the use of monetary incentives. Using an experimental design, the research concludes that questionnaire complexity and the use of monetary incentives generate no difference in returns, whereas the use of Federal Express to deliver the survey to nonprofit executives has a measurable positive effect.

7.  “America Gives: Survey of Americans’ Generosity After September 11”
Center on Philanthropy at Indiana University and Association of Fundraising Professionals. Jan. 2002.
Summary: The Center on Philanthropy at Indiana University surveyed 1,304 adults about their household’s philanthropic behavior after the events of September 11, 2001. The questions were part of a larger study on giving that the Center was conducting at the time of the September 11 attacks. The survey found that Americans were very generous in their response to the September 11 events.   Of the people surveyed, 74.4 percent responded to the tragedy with some form of charitable behavior—giving money; giving food, clothing, blood; and/or giving volunteer hours to help the victims. Among the 74.4 percent who responded to the tragedy by giving or volunteering, participation rates were as follows: 51.6 percent responded with exactly one of these types of charitable activity, 19.8 percent participated in two of them, and 3.0 percent participated in all three forms of philanthropy. This is a shortened, non-technical version of a more detailed study.

8.  “America Gives: A Survey of Americans’ Generosity After September 11 – Technical Version”
Kathryn Steinberg and Patrick Rooney
Published in Nonprofit and Voluntary Sector Quarterly, Vol. 34, No. 1, March 2005.
Summary: This paper describes a telephone survey (called "America Gives") which asked 1,304 randomly selected adults about their philanthropic behavior (giving of time and treasure) after the events of September 11, 2001. The questions were part of a larger national study (n = 4,200) on giving and volunteering that was being conducted at the time of the September 11 attacks. This paper provides a brief description of the study that was being conducted at the time of the terrorist attacks, the methodological considerations resulting from the immediate philanthropic response to the September 11 events, and steps that were taken to adapt the study to the changing national conditions. Next, we provide descriptive results from the survey, along with multivariate analyses of the determinants of giving and volunteering in this unique situation. Finally, we provide some caveats for researchers who may want to assess household giving and volunteering, and discuss implications for nonprofit managers and policy makers.

9. "Immigrant Assimilation and 7Charitable Giving"
Una Okonkwo Osili and Dan Du
Summary: Will immigration impact economic progress and social cohesion in host countries? One indicator that can shed new light on the complex process of immigrant assimilation is charitable giving. Charitable giving and other forms of civic engagement may affect norms of trust, connectedness, and cooperative behavior. We find that immigrant households appear to have lower average rates of participation and levels of charitable giving; these differences are not statistically significant, however, after controlling for permanent income and other household variables. There is considerable evidence that immigrants adapt rapidly to U.S. charitable institutions over time. Only recent immigrants (who arrived after 1990s) have significantly lower rates of charitable giving. Results on private transfers (giving to non-household members such as family, friends, relatives, and others) present a striking contrast. Immigrant households are significantly more likely to participate in private transfer networks.

Summary: The focus of this study was to ascertain the critical factors that influence compensation for individuals who are employed as fundraising professionals in nonprofit organizations. In general, results indicate that, when controlling for organizational size and human capital variables, performance, does indeed play a positive and significant role in determining both salary and bonus, particularly for those individuals employed as CDO's. Results also indicate a gender-pay gap-again controlling for all factors traditionally associated with pay differentials between males and females. Women fundraising professionals who are CDO's earn significantly lower salary then men; female staff earn significantly lower bonuses; and consultants earn significantly lower both bonus and salary. Again, when examining each position separately, we find a significant and negative relationship between gender and both bonus and salary across all positions. The study also found a significant and positive relationship between money raised and bonus and salary. One explanation may be that for fundraisers, where a financial measure of performance relates directly to job responsibilities-pay and performance are more likely to be related--unlike other positions in nonprofits, where pay and performance have not found much support in the empirical literature. Race and education appear to have no impact as well.

11. Patterns of Giving in COPPS, 2003
Takayuki Yoshioka

Summary: This paper uses data from COPPS 2003 to show how patterns of overall giving differ across socioeconomic characteristics of households. The COPPS 2003 wave asks about the value of household charitable contributions which consist of money, assets, or property given in 2002.

Approximately 67 percent of households made charitable contributions in 2002. Among all households, the average gift was $1,290 and the median gift was $288. Among donor households, the average gift was $1,917 and the sample median gift was $700. These statistics include one household that gave an exceptionally large amount. That household is not included in the COPPS charts elsewhere on this site.

A number of socioeconomic characteristics of households have statistically significant effects on overall giving: income, wealth (excluding home equity), itemization status, age of family head, marital status of family head, health condition of family head, the presence of an adult member volunteering in the household, the level of education of family head, religious affiliation of family head, employment status of family head, census region of the household, and location of households (metropolitan area, suburban, or rural).

Gender of family head, the number of children in the family unit, and race/ethnicity of family head have no statistically significant effect on overall giving.

12. Nonprofit and Philanthropic Studies Education
Dwight F. Burlingame, Ph.D.