Persistence and change in donations received by America's largest charities

Abstract

This dissertation explores growth among American charities by examining 25 years of the Philanthropy 400, an annual ranking published by The Chronicle of Philanthropy of the 400 charities receiving the most donations. Data preparation for the Philanthropy 400’s first analysis remedied publication deadline constraints by aligning data by fiscal years and adding 310 charities omitted from the published rankings, resulting in a study population of 1,101 charities. Most studies of charity finance examine individual Forms 990. The Philanthropy 400 uses consolidated financial information from entire organizational networks, creating the same basis for charities filing a single Form 990, like the American Red Cross, and charities with affiliates filing more than 1,000 Forms 990, like Habitat for Humanity. Organizational ecology theory frames examination of aggregate changes in the Philanthropy 400. Two questions examine how age and dependence on donations as a percentage of total income affect persistence in the rankings. A third question examines the changing share of total U.S. giving received by ranked charities. Despite stability resulting from the same charities occupying 189 of the 400 ranking positions every year, the median age of ranked charities decreased. Younger charities generally climbed within the rankings, while older charities tended to decline or exit the rankings. Younger new entrants often persisted in the rankings, suggesting some donors embrace various new causes or solutions. Charities ranked only once or twice decreased in number with each successive ranking. Most charities ranked only once entered the rankings by receiving two or more times their typical amount of donations, suggesting that sustained fundraising programs regularly outperform charities that periodically experience years of extraordinarily high donations. The aggregate inflation-adjusted donations received by the Philanthropy 400 increased during the study period and increased as a percentage of total U.S. giving. As predicted by organizational ecology, the increasing percentage of total U.S. giving received by the Philanthropy 400 coincided with slowing growth in both the number of U.S. charities and total U.S. giving. If the Philanthropy 400 continues to increase its percentage of total U.S. giving, this could affect financing for smaller charities.