“The goal is to turn data into information and information into insight” (Carly Fiorina). And the best example of this in nonprofit fundraising is the latest numbers from Giving USA.
The numbers show that after considering all the donations–corporate, individual, foundation giving, etc., Americans gave a record $427.71 billion in 2018. Total contributions grew 0.7% as compared to 2017, but declined 1.7% adjusted for inflation. This means that more than $1.12 billion were used to improve lives and communities each day. It must be kept in mind that 2018 was a year of economic complexities and new tax laws and this environment could have influenced donors..
Let us dive deeper into various insights that can be derived from the report.
Who are Giving?
Individuals have held their place to be the backbone of nonprofit fundraising. They were responsible for about 70 percent, i.e, $292.09 billion of all the dollars given to charity.
Organizations contributed to about 18 percent of all giving amounting to $75.86 billion. Givings from bequests amounted to $39.71 billion which is about 9 percent. And corporations contributed 5 percent, i.e., $20.05 billion of all amount to charity.
It can be observed that individual giving decreased by about 1%, and 3.7%, when adjusted for inflation. According to the report, this was the first decline in individual giving in 5 years. It could be said that the tax changes might have led to this decline, but the high earning individuals are still itemizing deductions. The increased giving by foundations could be a result of the dynamic economic environment.
Donations in assets, i.e., bequests trends fluctuate from year to year based on the number of donors with high net worth. These are less influenced by economic factors.
The contributions of corporations in nonprofit fundraising has seen a significant growth this year. The report shows that some corporations decided to pay it forward and increase their giving. This growth has been significantly fueled by Tax Cuts and Jobs Act, which decreased the corporate tax rate from 35 percent to 21 percent. However, it is difficult to say if these trends would continue in 2019 as many organizations might have given a one-time-boost to their charitable sector after the new law went live.
A few key Takeaways
- When we take inflation into account then the sector of International Affairs (7 percent increase )and Environment/Animals (1.2 percent increase) saw the greatest increases in donations. Here, the impact of generational giving could be seen as these cause seem to receive more donations from younger people.
- It could be said that Americans haven’t fully understood how tax changes would affect their charitable giving in 2018. So, they might decide to make some changes before filing their taxes– such as focusing on lifetime gifts for income tax planning, in 2019.
- The biggest motivation towards giving in 2018 was the strong economic environment. The trends have been assumed to continue in 2019. It is advisable to promote gifts of appreciated assets–such as securities and real estate.
- The data from the report shows that the number of Americans giving to charity has been steadily decreasing over the past 20 years. Yet, it does not mean they are any less charitable as many are giving to donor advised funds rather than directly giving to charities.
Key data about some sectors of the industry
- Fidelity Charitable, the nation’s largest nonprofit, released it 2019 Giving Report which states that it made about $5.2 billion in donor-recommended grants in 2018. This is a 17 percent increase from 2017.
- Nonprofit fundraising for the public society sector declined in 2018 after 8 years of increased growth.
- Human services, health and arts remained relatively constant in 2018 and did not keep up the pace with inflation.
- Giving to religious charities has declined about 1.5% (3.9% when adjusted for inflation) as compared to 2017. This sector of the industry has received about $124.52 billion in contributions.
- Educational fundraising has seen a decline of about 1.3% (3.7% when adjusted for inflation) and received about $58.72 billion.
- Contributions to humans services have remained flat in terms of growth with an estimate $51.54 billion in contributions.
It is necessary for you to understand that the government has brought bills to support your giving behaviour. The Charitable Tax Deduction Act is designed to protect taxpayers and increase fundraising for nonprofits. Another step that gives you the ability to write off your charitable donations is the Bipartisan bill. It provides maximum relief for every donation to a tax-exempt charity.
We here at GiveCentral are working to make sure that these numbers form Giving USA do not become the part of a downward trend in nonprofit fundraising. Our donor management software helps nonprofits manage their donations and contacts in a sophisticated manner. With our software we look forward to encourage people from all generations to contribute more towards welfare and community service. If your organisation needs support in planning a giving program, you can use this data to create a roadmap. If you are in the process of growing your fundraising efforts, contact us to learn how you can better connect with your donors to support your cause.