Many holidays celebrate gift-giving… National Philanthropy Day celebrates those who give back. As we honor the individuals and organizations who set the standard for charitable investment, we have an opportunity not only to thank them but to learn from them. I hope many will follow their stories—and follow their examples.
Americans reached a charitable-giving milestone this past year: $358.38 billion (eclipsing our 2007 record of $355.17 billion). As chair of Giving USA Foundation, I was inspired to see across-the-board growth in every giving category: individual, bequest, corporation and foundation.
These revelations from Giving USA 2015: The Annual Report on Philanthropy for the Year 2014 are encouraging not just because they indicate a healthier economy—but because they reveal a society where support for our nation’s 1-million-plus nonprofits is considered not only a priority, but worth digging deeper into our pockets.
But how do we, as a community of nonprofits and nonprofit supporters, ensure philanthropy continues to grow in the new year? Pay attention to giving trends. As a businessperson, you probably wouldn’t think twice about applying trends from your sector to future planning. But if you work with a nonprofit or serve on a board, have you been following donor trends?
Our nonprofit consulting firm advises clients, “Believe like a nonprofit, but behave like a business.” Successful nonprofits implement sound business practices—which includes adapting as the world changes and evolves. Following the latest giving trends gives us insight, as strategic businesspeople and savvy fundraisers, in planning our next move. So let’s take a closer look at the trends fundraising practitioners have seen in the last few years:
Large, individual gifts are on the rise. Nonprofits have been receiving very large gifts from high-net-worth households—50% of total individual giving came from 4.5% of the population. While the total number of donations made annually to charities isn’t changing much, the dollar value of individual gifts is going up. In fact, individuals (not corporations or foundations, as commonly assumed) are the largest source of charitable gifts.
Gifts to donor-advised funds are growing dramatically. At the Gurin Forum in Chicago, where I was a panelist earlier this month, we discussed how donor-advised funds represent 4% of all giving, and my belief they will have a long-term impact on philanthropy. For those unfamiliar with the concept, donor-advised funds are a flexible way for individuals or families to pass money through to charities—an alternative to creating a private foundation. They can be established through a freestanding national commercial fund or community foundation.
Donors want to be more involved in where their gifts go. They are showing more and more interest in learning what strategies are being used by nonprofits they support. Donors are asking nonprofits to be more accountable, and so it’s more vital than ever to demonstrate transparency and implement sound business practices—investing in strategic planning, staff and technology.
Technology plays an increasingly important role. Just like society at large, nonprofits are not immune from the rapid pace of technology. From social media to crowdfunding efforts like #GivingTuesday to mobile-friendly nonprofit websites, technology is critical to reaching the next generation of donors. It’s an often underutilized tool for nurturing relationships within the community and retaining donors.
Donor retention is increasingly influenced by how well nonprofits report on impact. Just like in the business world, where loyal customers are the most valuable, nonprofits should realize keeping donors is easier (and less costly) than finding new ones. Donors need to be told how their dollars are making a difference. As I told nonprofit professionals in Austin last month at the Blackbaud Conference (bbcon), the relationship should also be fostered creatively—connecting to donors’ passions and giving behind-the-scenes experiences. People want to know metrics, but without emotional connection you’ll lose them. Nonprofits must tell their story in a meaningful, compelling way.
While future giving can’t be predicted, it definitely can be influenced. If nonprofits and their boards incorporate these trends into their 2016 fundraising plans, the payoff could be significant—not just for the nonprofit’s bottom line, but for the entire community.
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