“The goal is to turn data into information and information into insight” (Carly Fiorina). And the best source of nonprofit fundraising data is the Giving USA 2019 trends report. Here’s a simple breakdown of the report for our readers to help them make informed choices for their up and running campaigns.
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.
Considering that 2018 was a year of economic complexities and new tax laws, donor behavior is expected to be varied. Having said that, let us dive deeper.
Who are giving?
Individuals continue to be the backbone of nonprofit fundraising. They were responsible for about 70 percent, i.e, $292.09 billion of all the dollars towards charity.
Organizations contributed to about 18 percent of all giving, amounting to $75.86 billion. Giving from bequests was $39.71 billion which is about 9 percent. And corporations contributed 5 percent, i.e., $20.05 billion of all amount given to charity.
We can clearly observe 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. On the other hand, increase in giving by foundations could be a result of the dynamic economic environment. Donations in assets, i.e., bequests 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 saw a significant growth this year. A growth significantly fueled by Tax Cuts and Jobs Act, decreasing corporate tax rate from 35 percent to 21 percent. However, it is currently difficult to say if we will see these same trends continue in 2019 as many organizations might have seen a one-time-boost 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) see the greatest increases in donations. Here, the impact of generational giving is seen as these cause seem to receive more donations from younger people.
- It seems that Americans haven’t fully understood how tax changes affect their charitable giving in 2018. So, they might opt to make some changes in their planned donations before filing taxes for 2019. Foe example, focusing on lifetime gifts instead of one-time gifts.
- The biggest motivation towards giving in 2018 is the strong economic environment. These trends will 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
- 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.