It’s late June, which in the philanthropy world always means the release of the latest Giving USA report.
The report estimates total giving in the United States based upon a multitude of sources. It is the oldest and most referenced barometer on the state of the charitable sector’s health. The data can be interpreted in a multitude of ways. Below is what an almost four decade veteran of the sector sees as five key aspects of the 2019 Giving USA report.
1. Overall Giving Declined 1.7%
This is the inflation adjusted reference number. Such a number should sound more than one alarm for those of us in the sector because it means the status quo of current fundraising practices are NOT going to allow every charity to keep up with inflation with the dollars raised to fund their mission.
This number is even more scary when any discussion of mission funding comes up since there has been a bountiful influx of dollars into Donor-Advised Funds (DAF).
The billions of dollars flowing into DAFs have not been matched by the same outflow of dollars going to fund the actual missions of charities. The level of grant making has improved in 2018, however there are still many more dollars flowing in that may wait years to come out. Yes, the dollars placed into DAFs count toward the Giving USA total with only a portion being put into mission work each year.
The above conclusions combine to not provide a recipe for a successful charitable sector in the near term!
2. Individual Giving Decreased from 70% in 2017 to 68% in 2018
Once again, we should look at the inflation adjusted numbers to understand the full picture. In the case of individual giving, the actual dollars decreased 3.4%, when adjusted for inflation. So not only did the percentage of the total giving pie decrease, both the raw, and adjusted numbers decreased.
Warning bell number two should be sounding, since Individual giving has been providing the lion’s share of dollars going to mission related work in the nonprofit sector. Almost since the Giving USA report began, roughly 7 out of every 10 dollars being donated, came from individuals. In fact, this is why nearly every charity growing its fundraising dollars has done so via movement into larger individual giving. Many of those charities who grew, did so by establishing major gift programs within their fundraising plans.
3. 77% of the Gifts are from Individuals
77% represents the total of giving coming from both Individuals and from bequests, which are originated by individuals. The combined percentage dwarfs the remaining categories and should be used as a barometer of effort to be extended.
In my opinion, 77% of the time and effort being spent in fundraising activities by charities should focus on building relationships with individuals. Even very small charities can create an effort centered on relationship building, which by its very nature will lead to major gifts and legacy related giving. This does not have to be, nor should it be, the domain of larger charities. At the very least, every charity should have a strong enough relationship with its board of directors to establish the beginnings of a major gift and legacy/bequest programs.
4. Foundation Giving Increased to 18% of all Gifts
One of the brightest sections of the report (if not the brightest) are the giving levels achieved by foundations. Moving up to 18% of the total and resulting in a 4.7% inflation adjusted increase in dollars provided is significant.
Every size of charity engaged in fundraising should be allocating a percentage of their efforts in this area. Thankfully, for small charities there is an abundance of independent contractors who are experienced grant writers to assist here. Even the smallest of charities can see what results they can achieve in this manner.
5. Religious and Education Giving Declined
Of all the recipients of last year’s philanthropy dollars, those given to religious organizations declined the most. That decrease was a whopping 3.9% when adjusted for inflation for religious organizations and 3.7% for educational organizations!
I particularly think this is significant because faith-based giving has been the bedrock around which a large amount of individual giving is organized. When you consider that for most households, philanthropy begins with either giving to their church or some other religious organization or a school they are affiliated with, seeing a decline in both groups is not a good forecast for the future.
When reading previous USA Giving reports we could always count on strong performance, if not healthy gains in both religious and educational giving. Let’s hope this trend turns around because philanthropy habits formed early in life by giving to a church or school last a lifetime!
Honestly, I wish it was better news in the 2019 Giving USA report regarding the state of philanthropic giving in the United States. Seeing so many declines during a period of a rising stock market, and overall economic prosperity is what is most troubling to me. Usually in growing economic times, the results in all of the various categories are rising, and in the worst case are holding steady.
Most of all, the days of just rolling out the same old fundraising techniques and practices, while expecting equal or better results, are perhaps over. Charitable organizations will need to try new methods and engage in educational opportunities based upon proven best practices to move the fundraising results needle upwards. Thankfully, there is even more research being conducted on best practices and exciting new educational opportunities such as the Fundraising Standard bringing them to life. I personally hope each of you reading this post are able to understand, utilize, and benefit from proven best fundraising practices in the near future!