What’s Really Behind the Decline in Individual Giving?

AFP SE WI Administrator
July 18, 2019

What’s Really Behind the Decline in Individual Giving?

Giving USA numbers demystified at June AFP gathering

Charitable giving in the United States reached $427 million in 2018, according to the 2019 Giving USA Report released last month. Giving by individuals declined to 68% of the total, suggesting that nonprofits will need to shift their fundraising strategies to rely increasingly on the growing corporate and foundation sectors. A group of local nonprofit leaders, however, has challenged this statistic, arguing that the reported drop is an artifact of the way the report was run.

On June 19, a sell-out audience of local fundraising and nonprofit professionals gathered at the Milwaukee Public Museum to hear the group analyze the report’s key findings and share advice on how nonprofits can use the data to inform fundraising strategy and planning in the coming years. AFP Southeastern Wisconsin co-sponsored the event with the museum and nonprofit consulting firm Campbell and Company.

The panel included Julie Quinlan Brame (Senior Vice President of Development, Milwaukee Public Museum), Patricia Contreras (Director, Global Community Relations & Contributions, Rockwell Automation), Ginny Finn (Chief Development Officer, YWCA Southeast Wisconsin), Mary Ellen Stanek (Managing Director and CIO, Baird Advisors and President, Baird Funds) and moderator Melissa Berliner (Vice President, Campbell and Company).

According to the Giving USA Report, increased giving via donor advised funds and family foundations likely accounted for the apparent downward shift in individual giving in 2018. However, Ginny Finn pointed out that both donor advised funds and family foundations are controlled by individuals; if instead we look at all three categories together, we would see that individual giving on the whole is growing. Using this model, individual giving combined with bequests accounted for 86% of total giving for 2018, with foundations and corporations constituting the remainder. Foundation giving was up 7.3% and corporate giving was up 5.4%, thanks in part to robust economic conditions.

The report also looked at giving through a long-term lens. While total charitable giving dollars have increased steadily for the past four decades, the percentage of Americans who make charitable gifts declined 11% between 2000 and 2014, with much of that drop occurring in the wake of the 2008 financial crisis.

Panelists cited Giving USA as a useful tool for their organizations to frame fundraising planning and provide important data-rich context for their boards. Ms. Stanek cautioned that organizations should not rely too heavily on the report, pointing out that recent changes to the tax code are complex, and looking at their potential impact along with other key economic factors over a one-year period is an arbitrary measure.

All panelists agreed that while Giving USA data is helpful for trend analysis and defining fundraising strategies, the most important focus for organizations must be telling stories that communicate why giving matters. In addition to describing immediate and measurable outcomes (ROI), we must also share the big-picture perspective of the long term impact of giving.

The discussion touched on the importance of paying attention to mid-level donors (as most top campaign donors started as mid-level donors) and connecting with millennials, who can amplify the impact of their giving and volunteer work – and nonprofit organizations’ brands – through their social media networks.

In powerful and very personal remarks arising from their own experiences, panelists underlined that the future success of the fundraising profession and nonprofit organizations depends on prioritizing diversity and inclusion within our professional and volunteer leadership to mirror our larger society.

Giving USA, a public service initiative of the Giving USA Foundation, is an annual report on the sources and uses of charitable giving in the United States based on research conducted by the Indiana University Lilly School of Philanthropy.

For a detailed summary of the 2019 Giving USA report, please follow this link:
https://www.youtube.com/watch?v=l0D2pkQ4rio&app=desktop

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