Charitable Giving in United States is Decreasing

I don’t think it’s possible to know what percentage of people make charitable gifts in our country.  We can find the percentage of people who claim charitable donations on their itemized tax returns. Typically, people who itemize make more than $100,000, and with the increased standard minimum deduction most people making as much as $200,000 are not expected to itemize in the future. Giving studies using tax returns will measure a smaller group of our population’s giving behavior. Tax return studies do show a marked decrease in charitable giving. DonorCentrics Index of Direct Marketing Fundraising measures gifts of $100 and less from 67 of the largest organizations in the country.  This index captures gifts from people likely not to be itemizing.  The donorCentrics Index shows that, over the last 14 years, the number of small donors has decreased every year except one.  The decrease from 2005-2015 was 25%.  Other studies by college alumni groups, the YMCA, and the Indiana University Lilly Family School of Philanthropy show similar trends. There are many theories for the decrease, including the recession, limited discretionary income, and a lack of engagement between nonprofit organizations and people in need. The studies also show that even after accounting for factors such as wealth and income, per capita, giving is still going down.  It is distressing to me since I am aware of the significant needs we have, the inspiring work organizations are doing to help, and the great joy in life from giving and helping others. What are charities doing to counter this trend in declining giving? Charities are embracing strategies to motivate a new generation of donors, recognizing that giving small gifts of $5-$25 is an entry point into charitable giving.  For people on a limited income, contributions in this range convey a genuine commitment to giving.  Subscription giving, signing up to contribute a regular modest monthly donation, is a method of making a strong commitment to a cause that is relatively painless for donors of any income and is essential to nonprofit budgets.  The Greater New Orleans Foundation increased individual donor contributions over the past five years by promoting and supporting a Giving Day.  Similar to the Big Give held in Nevada annually, these Giving Days have become big business, involving thousands of small donors.  An example from New Orleans is a crowdfunding campaign by a group called Electric Girls.  Their campaign resulted in raising $10,000 with gifts averaging $25. Charities are experimenting with digital donor contact and mass customization through technology to personalize each donor’s experience.  Reaching and connecting with donors through digital avenues is the wave of the future as younger generations are engaged. At the same time, many organizations are decreasing their efforts to engage and cultivate masses of new donors in favor of raising more money from fewer donors.  There are many valid reasons for this, such as lower fundraising costs and increased loyalty and more substantial gifts when wealthy donors give more.  But even those organizations focused on fewer donors recognize that such a focus must be balanced with efforts to engage new prospective donors. Engagement of new donors in our region will be critical to solving the problems we have now and in the future.  Combined with volunteerism, leadership, and advocacy, contributed dollars are an essential resource to find and implement solutions that work. Creating a culture of giving that involves every member of our community is a goal worth pursuing.  The Community Foundation has a variety of ways to help you grow closer to your charitable passions, work together for a common goal and to reach out to your neighbors. We believe the power of philanthropy will strengthen our community. Call me to talk about your reasons for giving and what you want to accomplish. We will explore ways to make your charitable gifts work for you by benefiting your taxes, expressing your family values, enriching our community, and connecting you to causes that matter. Chris Askin, President, and CEO 775-333-5499 Connecting people who care with causes that matter.