susan raymond, ph.d. executive vice president, changing our world, inc. september 14, 2015 to...
TRANSCRIPT
SUSAN RAYMOND, PH.D.
EXECUTIVE VICE PRESIDENT, CHANGING OUR WORLD, INC.
SEPTEMBER 14, 2015
To Innovate or Not to Innovate: That Is the Question
Rule Number One in a World of Change
I always skate to where the puck is going to be.Wayne Gretsky
Even recognizing that…..
It’s hard to make predictions, especially about the future.Yogi Berra
2
3
ObjectivesDocument the realities facing the Church, challenges and opportunities
Review the nature of innovation in the revenue strategy and program work of nonprofits
Examine how Catholic institutions are quietly becoming leaders in this evolution
Discuss the implications for fundraising strategies
3
Data on Catholic Community
4
Catholic Population: The sky is not falling…
5
Declining Population: Perception Versus Reality The Catholic population has continued to grow.
The retention rate for Catholics is high, nearly 2/3 of children growing up in Catholic households remain Catholic.
1965 1975 1985 1995 2000 2005 2012 201430
35
40
45
50
55
60
65
70
Catholic Population from 1965 to 2014
Year
Popu
latio
n in
Mill
ions
Self-identified Official Catholic Directory0
102030405060708090
Number of Catholics
Mem
bers
in M
illio
ns
13 million Catholics unaccounted for
6
Yet, 1.47 million baptisms in 1965
compares to 820,000 in 2014, a decline of
44%.
Declining Attendance
Recent trends suggest that the decline in church attendance is leveling off and even rising slightly in young ages.
19741977
19801983
19861989
19942000
20062012
0%10%20%30%40%50%60%70%80%90%
100%
Percent who say they attend church at least weekly in the General Social Survey, 1974-2012
Strong CatholicsAll Catholics
Year
Perc
ent
Pew Research CenterGeorgetown University Center for Applied Research of the Apostolate
1955 1965 1975 1985 1995 20050
10
20
30
40
50
60
70
80
66 6460 58
77 74
73
56
35 37
2530
Church Attendance Among Catholics, by Age% Attended church in last seven day
60+50-5940-4930-3921-29
Perc
ent
7
But there is change.
Demographics are changing.
Catholic Hispanic women have the highest birth rates in the U.S.
It is projected that between 2005-2030, the number of Hispanics will double to 83.7 million, reaching 106 million by 2050.
• If 76% of those people are Catholic, Hispanic Catholics in the U.S. will be more than 80 million. That is the equivalent to the total populations of California, New York, and Texas combined.
Over the next 12 years Hispanics will be the majority of Catholics.
2000 2011
35.2 million
51.9 million
Hispanics Living in the U.S.
40% in-crease
PEW RESEARCH CENTER
8
Increasingly, it is a U.S. born Hispanic population
Most immigrants arrived in the U.S. before 2000.
The share of the nation’s Hispanics who are U.S. born has been on the rise since 2000.
As of 2009, 64% of the U.S. Hispanic population was U.S. born, indicating the majority of the Hispanic population has grown up in American culture.
U.S. Hispanics’ homes, schools, and communities are diverse, and their participation in larger community institutions is no less common.
1968 1973 1978 1983 1988 1993 1998 2003 20080%
10%20%30%40%50%60%70%80%90%
100%86%
60% 64%
14%
40% 36%
Percent of U.S. Hispanics who are Foreign Born vs. U.S. Born
Foreign Born U.S. Born
Before 1990 1990-1999 '00-'05 '06 or later0%
5%
10%
15%
20%
25%
30%
35%
40%
38%
27%
20%16%
Percent of immigrants arriving in the U.S.
PEW RESEARCH CENTER
9
Catholic institutions represent a critical mass in nearly every social, health, and education sector in the nation
Institution Type Number of Institutions People Served
Hospitals 629 88,519,295
Health Care Centers 363 5,038,247
K-12 Education 6685 2,001,740
Higher Education 232 818,331
Catholic Charities (Social Services) 170 4,224,224
Catholic Charities (Hunger Services) N/A 7,146,490
Global Relief and Development (CRS and
CMMB only)2 > 100,000,000
100
mill
ion
peop
le
10
…..but the challenges are real
11
Workforce: A Changed Cost Driver
1965 1975 1985 1995 2000 2005 20120
10,000
20,000
30,000
40,000
50,000
60,000
70,000 Total Number of Priests from 1965 to 2012
Year
Num
ber o
f Prie
sts
1965 1975 1985 1995 2000 2005 20120
50,000
100,000
150,000
200,000
Total Number of Religious Sisters from 1965 to 2012
Year
Num
ber o
f Prie
sts
Georgetown University Center for Applied Research of the Apostolate
12
Parish Financial Crisis: Revenue Versus Expenses On average, expenses exceed revenue during FY 2010, a trend that will likely continue
The funding problem must be addressed systematically through new fundraising methods and strategies
Revenue Expenses$580,000.00
$600,000.00
$620,000.00
$640,000.00
$660,000.00
$680,000.00
$700,000.00
$720,000.00
Revenue Versus Expenses
USCCB
13
Dependence on Government:Catholic Charities as an Illustration
Source: Center for Applied Research in the Apostolate
Government Revenue
57%Program Service Fees9%
Diosesan and Church Support
2%
Community & Private Support
25%
Investment Income1%
Other Revenue4%
14
Catholic Giving: What do we have to work with?
15
Median Income Compared to Other Religions
Latter
Day Sa
ints
Pentec
ostal/A
SG
Other Pro
testan
t
Baptist
Luthera
n
Greek/R
ussian
/Easte
rn O
rthodox
Jewish
Methodist
Episc
opalian
Presbyte
rian
Catholic
Muslim/B
uddhist
Jehova
h's Witn
essNone
$0.00
$20,000.00
$40,000.00
$60,000.00
$80,000.00
$100,000.00
$120,000.00
$140,000.00
Median Family Income by Religious Affiliation
16
But a Soft Middle in Structure
Georgetown University Center for Applied Research of the Apostolate
Pew Research Center
$100,000+ $75,000 to $99,999 $50,000 to $74,999 $30,000 to $49,999 Less than $30,0000.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%Catholic Household Income Versus National Average
Catholic ChurchNational Average
17
Propensity to Give is high but slightly lower than some other faith groups
Latter
Day Sa
ints
Pentec
ostal/A
SG
Other Pro
testan
t
Baptist
Luthera
n
Greek/R
ussian
/Easte
rn O
rthodox
Jewish
Methodist
Episc
opalian
Presbyte
rian
Catholic
Muslim/B
uddhist
Jehova
h's Witn
essNone
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
90.00%
100.00%Percent of People Who Give by Religion
Source: Center on Philanthropy at Indiana University
18
And on the low end in terms of propensity to give to religion compared to other giving causes
Latter
Day Sa
ints
Pentec
ostal/A
SG
Other Pro
testan
t
Baptist
Luthera
n
Greek/R
ussian
/Easte
rn O
rthodox
Jewish
Methodist
Episc
opalian
Presbyte
rian
Catholic
Muslim/B
uddhist
Jehova
h's Witn
essNone
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
7.00%
Total Giving and Religious Giving as a Share of Income by Religious Affiliation Sorted by Percentage
Total Giving as a Percent of Income Religious Giving as a Percent of Income
19
Younger Generations Still Donate Heavily to Religion
Source: Center on Philanthropy at Indiana University
Millennials X Boomer Silent Great$0.00
$200.00
$400.00
$600.00
$800.00
$1,000.00
$1,200.00
$1,400.00
$1,600.00
$1,800.00
$2,000.00
Average Gift Total by Cause by Generation
ReligionSecular
But, controlling for education, income, marital status, race and other factors, there is no statistical significance to the relationship between generation and religious giving.
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But age does matter in terms of interests
Source: Center on Philanthropy at Indiana University
Basic Needs of Poor Make Community Better Give Poor a Way to Help Themselves
Make World Better0
10
20
30
40
50
60
Top Four GIving Motivations
MillennialsXBoomersSilentGreat
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So, where are we?Reliance only on traditional ways of charitable giving will require new outreach and new
approaches to a changing Catholic demographic, especially with the “soft middle” on Catholic household income structure.
But, even those improvements may not be enough, given the propensities to give and the propensities to give to religion of those who do give.
Is there anywhere else to turn?
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The Changing World of Nonprofit Strategyand Social Finance
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A much more robust toolbox.
Traditional pools but also PRIs, MRIs, impact investing, venture philanthropy, social investment, social enterprise, bridge funds for
internal program loans, corporate philanthropy, CSR, CSE, CRM, product-embedded transactions, bond and equity tools.
Cash or in-kind gifts, pledges, foundation grants, bequests of
various types
24
The Arc of Innovation in Philanthropy
Traditional resource transfers
Traditional philanthropic resources at efficiency and scale
Traditional philanthropic resources demanding market-like results
Philanthropicresources moving in new ways onto the societal commons
Entirely new kinds of resources moving onto the societal commons
Social stock exchangesImpact investingMRIsEquity-like flowsBond-like flowsSocial businessBlended investments
CollaborativesInteractive hubsMultiple-funder partnerships
Venture philanthropy
PRIsMicro-insurance poolsEmbedded transfers
Charitable grants
Therefore, we can build along a very complex arc of innovation in ways that suit the problem.
We can
give a
man a
fish.
But we ca
n
also cr
eate a
fishing net
business
that
powers
fishing and
creates s
kills
and jobs.
25
Catholic Innovation
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We can set the standard of excellence in innovation for the nation and remain true to mission by building on the flagships in our armada.
The new approach to private resource mobilization focuses on Integration across a range of problems to address multiple dimensions of complex issues with a single funding strategy
Investment in problem solving
Sustainability of both program efforts and the funding for those efforts
Performance against clearly articulated measurable goals
In no cases does this new approach supplant traditional giving. Rather, it provides an approach to ensuring that charitable giving is used for what cannot be otherwise financed, and social finance is used for the rest.
It MAXIMIZES the utility of charity.
27
Innovative Funding Streams: What are wetalking about?
Products/services consistent with mission or extension of mission in theirContentExecution
Building on assets or core capacities
Earnings flowing to mission-related program support
Therefore we are not talking about the hospital gift shop nor sweatshirt sales in the book store.
We are talking about mission-critical innovation.
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Let us look, therefore, at the approaches and concrete illustrationsin five categories of Catholic institutions:
◦ Religious communities◦ Health care◦ Social services◦ Education◦ Global relief and development
How Does Innovation Actually Work?And How Does It Help Funding?
29
So, let’s look at some examples with a common optic
The mission of the organization
The Assets that could be put to work
The initiatives undertaken
The leverage that results
30
Catholic Religious Congregations
The AssetsLand and
Knowledge
The MissionServe the Underserved
Sisters of St. Francis Oldenberg, Indiana:
Michaela FarmOrganic Farming
Dominican Sisters, Great Bend, Kansas
Heartland Farm, Education. Ecology, Energy,
Organics
Philanthropy and investments from other religious
communities
31
Catholic Health Care
The AssetsFacilities,
Expertise, Capital
The MissionJustice, Peace, Sustainability
CHI, CHHW, Trinity Health Calvert Social Investment
NotesProviding investment capital
to nonprofits
Catholic Health Initiatives: Direct Community InvestmentMission-Related Investing of
2% of total operating investment assets
Ascension HealthEnterprising Health
Bottom of the Pyramid Investing in Flint, Michigan
Leverage from Private Capital
32
Catholic Social Service
The AssetsFacilities, access to large populations, knowledge
The MissionEmpower and enable the poor
Catholic Charities SpokaneNew Leaf Bakery
A social enterprise that trains those in need and has
become a popular brand and eatery
Catholic Charities ErieCatering on Parade
Locavore catering that creates jobs and returns revenue for
St. Martin Center
Catholic Charities OmahaMicrobusiness Loans
Low interest rate loans for also create revenue
Increased visibility and funder dialogue, especially with
younger donors
Homeboy IndustriesA social enterprise that trains at risk youth and former gang
members and produces goods and services
throughout Los Angeles
33
National Scope and Coverage of Catholic Charities Social
Enterprises
Source: Center for Applied Research in the Apostolate, Georgetown University, Washington, DC: Catholic Charities USA 2011 Annual Survey Final Report
34
Catholic Education
The AssetsFacilities, quality
outcomes, huge alumni networks
The MissionAccess to quality education for all
Catholic Alumni PartnershipFundraising model for
elementary schools that uses collaboration and a “CAP
University” training system to raise capacity
Cristo ReySchool system whose
scholarship funding is tied to corporate employment
partnerships, creating jobs, skills, and education together
Saskatoon Catholic School Division (CAN)
Core Neighborhood Youth Corps
Social enterprise that prepares youth for school or work
Incentivizes corporate partnerships and internal
investments
35
Catholic Global Relief and Development
The AssetsGeography and
Programs
The MissionFight Poverty
Sisters of Notre Dame de Namur
Cyber Cafes in the Congo to fund student education costs
CordaidPerformance Based
Financing in health and education in Africa
Bank of FonkozeMicrofinance serving
56,000 women borrowers and ¼ million savers in
HaitiChildren of God Relief
Institute Laboratory Services in Kenya to support HIV
orphan villages
Catholic Relief ServicesMicrofinance, Fair Trade
chocolate
Funding leverage and appeals to younger donors
36
Implications for Catholic Fundraising
37
Innovation Powers Fundraising Expectations of the new generation of donors
◦ Impact, impact, impact◦ Leverage◦ Collaboration across types of institutions◦ Efficiency
Innovation produces◦ Scale◦ Results◦ New interest from new partners
38
We must learn to do this and spread the knowledge and practice.
If we do not….We will underperform in fundraising
◦ We are leaving money on the table by not reaching new charitable investors.◦ And we will find our existing donors going elsewhere.
We will underperform in mission◦ We will not serve as many as we could as well as we might◦ We will not solve as many problems as we might.
We will cede leadership to others◦ And fail to evangelize the world
39
Therefore, the consequences are not trivial.
40
The Challenge: Turning Atoms into Molecules
We lack a concerted effort to document the innovations, objectively evaluate their impacts, scale what works, and replicate by sharing both the innovations
and the management and finance systems needed to implement them.
We have the organizational scale to lead the world in innovation. We have the donors to fuel the effort.
We need the vehicle to carry us forward.
41
We must
Build skills and knowledgeHave the courage to innovate and therefore also to failAnd then the courage to keep goingCommunicate what we are doingSeize leadership in this sector.
42
We can lead.We are leading.We must lead.
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