Giving Trends Shows Overall Slow Growth with Some Cautionary Notes
Article Published July 2019
Every year, Giving USA publishes a report summarizing important trends in philanthropy from the previous year, along with trends for over up to forty years. Reading tea leaves and spotting trends can be especially important for non-profits who must continually develop effective fundraising strategies to grow or just to stay afloat.
For some non-profits, the news from 2018 in the newly-published 2019 Giving USA report is rosy. Two areas of non-profits saw significant increases in giving in 2018: environment/animal-focused organizations and international organizations. Three sectors remained largely flat: health, human services and arts/culture/humanities. Two sectors that faced a longer downward trend from 2016 to 2018 overall were religious organizations and organizations dedicated to public benefit (i.e. many advocacy organizations).
Charitable giving trends show a changing pattern. Fundraising professionals confirm that “most giving is by individuals.” While still true, that trend is down to 68% of all giving—from the much higher benchmark of 83% in the period 1979-1983. What is increasing currently is foundation and corporate giving—not by leaps and bounds, but slowly and steadily.
Reasons for these trends are not as apparent as the numbers themselves. Giving USA calls President Trump’s tax laws and policy environment a “negative” one in 2018, with much uncertainty and volatility. While the tax cuts of 2018 may have fueled giving, volatility made giving more challenging at the same time. Increases in the maximum charitable deduction for the wealthiest individuals (to 60% of gross income) may have increased donations, but the increase in the standard deduction may have wiped out incentives for charitable giving among those in lower income groups. How these trends continue or turn around must await the 2020 report.
Just as financial advisors caution the long view, so, too, should anyone working in philanthropic giving and fund development positions. Non-profit organizations and fundraising professionals should read Giving USA’s projections with a bit of caution. No one should rush to sell off any major holdings in his/her favorite charity in a down market but, moving investment portfolios into growth areas is always wise. The philanthropic sector is huge and continues to grow. There are over 1.2 million non-profits in the US, and they depend on those of us who work to strengthen non-profits to deliver value. ESC will continue to do exactly that—help our clients navigate tricky trends and new opportunities. To purchase a copy of the Giving USA 2019 Report visit https://store.givingusa.org.