The Uncertain Future of Giving

What do you think of the future of charitable giving?

The July 2018 Chronicle of Philanthropy reported on the Giving USA annual report for 2017. There, they noted the rise to $410 billion of charitable giving. But their headline speaks of the doubt behind those numbers:

Giving Grows for the Fourth Straight Year, but is the Future of Philanthropy Bright?

While there is much to celebrate, the Chronicle notes: “…the data reveals some worrying trends.” The article itself didn’t go out of its way to point out those trends in a dramatic way.

But here’s the point. Giving by individuals grew modestly. Giving by individuals grew just 3% and bequests by only 1%. To draw out the point, the decline in giving by the War Generations is a reality. At one point, those generations were the backbone of giving, and while the Boomer Generation appears to be following with a similar giving pattern, subsequent generations don’t seem to hold the same promise.

The Millennials, for instance, are the least churched generation our country has had. Typically, church attendance is the biggest single predictor of giving. Many of these points were drawn out in Charity Shock: Ten Critical Trends Revolutionizing the Fundraising Industry (2018).

Layer on tax law changes, economic and market uncertainty and global trade wars and the situation is ripe for a significant giving downturn.

The Chronicle aptly notes: “Pursuing wealthy donors is a matter of survival in a time when fewer people are giving. And big donations seem to be driving growth at many nonprofits…”

Additionally, the Chronicle notes “Charities should get serious about seeking planned gifts, given that a huge transfer of wealth is projected over the next decade.”

Stated differently, I believe we’ll see a decline of the middle market giver. The middle market giver has often made up the backbone of the budget for many nonprofits. On the other hand, there will be an increasing reliance on the major donor and upon planned gifts. For those ministries who don’t play well in those spaces, they may well face serious declines.