Climate Change

Farmers and ranchers in California are experiencing the worst drought of their lifetimes. For the near term, they’re hunkering down, selling off cattle or letting fields go dormant and hoping the federal government provides some serious relief. Some — or perhaps many — hearing talk of the impact of global warming and knowing statistics are building a stronger foundation under that theory, are thinking about a future away from the ranch or the farm.

Farmers and ranchers have significantly greater stakes in their professions and therefore significantly greater commitment to hanging on and figuring out what to do. But while ranchers and farmers are increasingly tempted to get off their ranges and (literally) out of their fields, the ever expanding nonprofit sector has emboldened fundraisers to stay in the field, just keep moving.

Unbeknownst it seems to most in the nonprofit sector there’s been a situation unfolding for about twenty-five years that now shows change to be more on the order of global warming than regional drought. The declining financial capacity of the middle class means the decline of the most generous of donors and the need to shift fundraising business models as radically as in the 70s and early 80s they were shifted into models that capitalized on the emergence of unprecedented middle class financial capacity.

Here’s a look at contributions as percentages of household adjusted gross income in three ranges.

Table for blog 53 march 1 2014

It’s the lowest of theses ranges where we find the median household income of donors, where what we can consider middle income donors account for approximately 30% of household and 27% of income. The two ranges above account for approximately 20% of households and 51% of income.

The problem is that the financial capacity of that $50,000 to $99,999 population has been shrinking for  a long time. While certainly exacerbated by the Great Recession, the trends have been longstanding. In a column last week, with only incidental reference to the nonprofit sector, David Brooks characterized the situation as capitalism facing “its greatest moral crisis since the Great Depression,” noting, “…the share of the economic pie for the middle 60% of earners¹ nationally has fallen from 53% to 45% since 1970.”

Meanwhile, also last week, came news that with its sale to Facebook, WhatsApp will share among its 55 employees a windfall that will amount to an average per employee of $345 million. I mention this not only to underscore the contrasts between current harvests in the Great Imperial Valley and Silicon Valley but to foreshadow further examination the nature of fundraising business model change whose mandate appears immediate and demanding.


¹ By which I take him to mean households with adjusted gross incomes between $25,000 and $149,999.