Changes in Giving in 2018 Point to Greater Need For Sophisticated Fundraising

Since 2017 was a banner year in giving, we all knew it was going to be a tough one to follow. But don’t be so hard on 2018 just yet. The philanthropic community is still growing, impacting, and changing the world and that is always something to be excited about. The Giving USA 2019: The Annual Report on Philanthropy for the Year 2018  was released this week and it is full of slight “ups and downs”. Most of all though, these statistics and data points give us an opportunity to learn from the past and press on towards a bright and exciting future in the nonprofit world.

Charitable Giving Recipients

The sectors that saw an increase in giving are newer sub-sectors in the space – International Affairs and Environment and Animals. While some other sectors saw a dip in giving from 2017 to 2018, many of them still saw an increase over 2016, showing positive 2-year growth. Sectors that saw a decline in 2018 were Human Services, Education, Public-society Benefit, and Foundations. Arts, Culture & Humanities, Health, and Human Services remained consistent with nominal changes.

International Affairs ⇑ 9.6% increase
Environment & Animals ⇑3.6% increase
Arts, Culture, Humanities ⇑0.3% increase
Health ⇑0.1% increase

Human Services ⇓0.3% decrease
Education ⇓1.3% decrease
Religion ⇓1.5% decrease
Public-society Benefit ⇓3.7% decrease
Foundations ⇓6.9% decrease

There are a few speculations as to why some categories have increased their giving while others have decreased. As an example, in 2018, there were less natural disasters within the United States, but disasters World-wide seemed to push for more attention to international causes, such as in response to the refugee crisis.

Charitable Giving Donors

In 2018, total giving increased 0.7% to $427.71 billion in real, current dollars. However, with adjustments to inflation it looks like giving decreased by 1.7%. These numbers, while less exciting than the greater positive jump in 2017, point to nominal changes in overall giving and a complex year for philanthropy.

The sources who were donating philanthropically in 2018, remain a very interesting takeaway from this report. Giving by foundations and corporations increased, while giving by bequests and individuals has decreased.

 

 

 

Giving by foundations was the strongest source category in terms of growth for 2018. This begs the question, are you aware of the foundations in your area or your nonprofit sector that give to you or causes like yours? We have some great suggestions on researching foundations that could be the perfect opportunity for you. Read more about that here.

The second strongest source category was corporations. According to our blog post about attracting more corporate support for your nonprofit, the three things that corporations focus on in a nonprofit partnership are:

  • Alignment with company mission/values
  • Opportunity for unique employee experiences
  • Your (the nonprofit’s) ability to show measurable results

Now is a great time to make sure you have a plan for targeting your best funding sources! No two nonprofits are the same, so no two nonprofit fundraising strategies should be the same either. Thankfully, tools like iWave are here to help, regardless of your strategy for targeting individuals, foundations, and corporations.

Factors & Impacts

There is some speculation on the factors that contributed to the 2018 giving results. There were new tax laws implemented in the United States, as well as some uncertainty around the policy environment as a whole. Any of these factors could have had a negative or positive impact on giving, depending on the household. Here are some considerations for the impact on giving:

Tax Factors

  • The standard deduction increased, which reduces the tax incentive to give.
  • The maximum charitable deduction increased to 60% of adjusted gross income, which increased tax incentives for high net worth individuals to give.
  • A cap was placed on state and local tax (SALT) deductions, which may have impacted giving as regional and local incentives differ state-to-state.

Economic Factors

  • Disposable personal income increased 5% from 2017.
  • Gross domestic product increased 5.2% from 2017.

Keep in mind, philanthropy is becoming more and more concentrated. And, 90% of high net worth individuals continue to give. Thus, it isn’t that the money is no longer there, it’s just that with fewer donors donating those funds, it is becoming increasingly more important to use sophisticated fundraising techniques to find the right major gift prospects and retain those donors through strategic stewardship. Fun fact, there are still more people giving philanthropically than there are people voting in federal elections. We need to get out there and identify the donors with a propensity and affinity to give to our causes!

Keep in mind, this report is meant to be educational and inform our future philanthropy. It essentially provides a marker of the trends in giving year over year and is a great opportunity to make sure your team is prepared to shift, adapt, and learn based on the ebb and flow of the philanthropic space.

What Does This Mean For You?

Make More Meaningful Connections with Your Donors

The nonprofit world has seen a decrease in individual giving for the past few years. As you can tell from this report and others, there are many reasons as to why that could be. No matter the reason though, knowing the numbers are decreasing is the perfect reason to make sure you are connecting to your individual donors at their level. Making meaningful connections is about meeting your donors where they are, sending thank you notes, showing them what impact their gift has had on your organization, and asking them for gifts at the right time, in the right way.

There are many ways to make sure those connections are solid and remain solid. Prospect research and wealth screening are fantastic ways to get to know your donor before they’re even a donor! And it’s also an opportunity to check in on existing donors and make sure you’re getting the most out of your relationships. With the new insights analytics in iWave, you can find your hidden gems and understand your champions even better to make sure that the valued donors you have, remain your valued donors for years to come.

Stay Connected & Embrace Change

Fundraising is changing. Mobile is more of a focus than ever before. Social media is a place where more and more people are interacting and giving. And it can be challenging to keep up with the trends. That’s why it’s so important to ensure your nonprofit has a strong social presence and to make sure you stay connected to your colleagues in the nonprofit fundraising space. They can help and mentor you along your fundraising journey. The more we learn from each other, the stronger we are.

Tell Your Story

Your nonprofit’s story is one of your strongest assets. Use it! Take the time to invest in some unique, interesting ways of sharing the amazing work that you do.

To read more about the Giving USA 2019 Annual Report – get the full report here.

 


About the author: Liz Corney is iWave’s Content Marketing Manager. She has a degree in Journalism, is a fiercely positive team-player and a creative self-starter. She has experience working in software technology, video/mobile games, learning & development, social & traditional media, and communications. Liz is also the co-founder of a local nonprofit organization working to better the lives of homeless women in her community.

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