As Good as It Gives: America’s Philanthropy Today
Tuesday, July 10, 2018
Giving USA 2018 Numbers and Beyond
By Brenda B Asare, President & CEO, The Alford Group
As a member of The Giving Institute, every year The Alford Group sponsors multiple events around the country to release the latest research and data from the Giving USA Foundation’s Giving USA Report. I’m excited to detail this year’s findings and what it means for our sector.
Giving USA 2018 Numbers (Report on Philanthropy for the Year 2017)
Total giving in 2017 reached its highest level ever, surpassing the $400 Billion mark for a total of $410.02 Billion.
Giving has been on the rise for the past few years. This year, giving increased among all four sources (corporations, foundations, bequests and individuals), with corporate giving increasing by the largest amount at 8 percent growth (5.7 percent adjusted for inflation). This growth from corporations is in part due to a $405 million bump in corporate gifts to natural disasters in 2017.
Growth in giving from individuals grew by 5.2 percent (3.0 percent adjusted for inflation). It has become clear that there is a correlation between a strong economy and philanthropic giving as demonstrated in the graph below.
Eight of the nine charitable subsectors realized growth in giving with giving to foundations having the highest growth of 15.5 percent (13.1 percent adjusted for inflation). The arts, culture and humanities subsector had the next highest growth at 8.7 percent (6.4 percent adjusted for inflation). The only subsector that experienced a decline in giving in 2017 was international affairs, and yet still reached its fourth-highest level of giving ever.
Overall, 2017 was a strong year for philanthropy.
What does this mean for the future of philanthropy?
#1 Differentiation is important
As giving increases, competition among nonprofits to secure those funds increases as well. There are more not-for-profit organizations today than ever before. This is both an opportunity and a challenge. It is an opportunity to collaborate with other organizations and increase societal impact together. At the same time, it is a challenge to cut through the clutter and reach/connect directly with donors and prospective donors. Organizations need to differentiate themselves and zero in on their mission and philanthropic value proposition.
#2 Sustained growth is critical
As depicted in Graph 2 above, giving trends over time generally follow economic trends as a lagging indicator of the country’s financial health. Knowing this information, we must acknowledge that sustaining growth is critical to every organization’s long term success. It will be important to invest in retaining donors and devote the resources necessary to maintaining strong relationships with your top contributors. Creating detailed donor engagement plans, board succession plans, and donor-centric strategies will help build the structure necessary for sustained growth.
#3 Personalized communication is key
According to new Lipman Hearne research outlining New Megadonor Archetypes, donors are approaching philanthropy from different viewpoints. For example, some donors avoid short-term, quick-fix solutions and works toward systemic change while others prefer incremental projects and spend time pivoting between them. An organization must approach these two donors very differently to compel each to become involved and engaged. As we see an increase in the overall number of nonprofits and work toward sustaining top donors, individual and personalized communication strategies become critical to meeting these donors where they are at. Just as philanthropy in America is changing, so are donors’ perspectives and interests.
#4 Some questions are left unanswered
There are still some questions that remain. How will the new tax structure affect overall giving in the future? How is the political climate affecting giving overall and in specific sectors? Which organizations and/or sectors will successfully slow donor attrition?
These are all questions that are being tracked, but it’s too early to know the answers just yet. As things unfold and more data is collected, we will all be eager to learn and share these outcomes and implications for philanthropy.
Please visit our website for more information on these topics at alford.com.
Giving USA: The Annual Report on Philanthropy is the seminal publication reporting on the sources and uses of charitable giving in the United States. The production and release of Giving USA is the result of the collaborative efforts of Giving USA Foundation, a public service initiative of The Giving Institute, and Indiana University Lilly Family School of Philanthropy. The Alford Group is a founding member of The Giving Institute.
About the Author
Brenda B. Asare assumed the role of President and CEO of The Alford Group in 2014. Since joining the firm over a decade ago, she has partnered with clients to raise over $2 billion to create game–changing results to fuel their visions. Prior to The Alford Group, Brenda served as Chief Development Officer with the American Red Cross.