To fully appreciate Giving USA it helps to know where it came from.
65 years ago, a consortium of fundraising consulting firms was known as the AAFRC – the American Association of Fundraising Counsel. They decided it would be a good idea to figure out who in America was giving money to what. And from those humble beginnings was born the granddaddy of research publications we know today.
The most frequent use of the Giving USA data is the quick snapshot we give to board members, trying to explain that individual donors (now and through their estates) give the lion’s share of philanthropy each year.
Remember when we all used to think it was 75%-8%-7%-5%? Individuals, foundations, bequests, and corporations. Those were the numbers for years.
The 2018 data may surprise you. It’s now 68% from individuals, 18% from foundations, 9.25% from bequests and yes, the same old 5% from corporations.
To me, one of the fun things about interpreting the data is that your guess is as good as any of the experts. It’s all looking at the data as carefully as we can and suggesting why we think it is so.
Many experts are quick to say the changes in the tax laws is the cause for the drop in individual giving this year, a 1.2% drop from 2017.
Others, though, admit it is too soon to draw that conclusion and, indeed, the gross amount of individual giving is just about the same as it was in 2016.
I’m going to tell you two things that I see from the data.
One, many donors who used to give as individuals are not making gifts to their Donor-Advised Funds. That drops the percentage of giving from individuals and raises, albeit slightly, the giving from foundations, which is up 1% from 2017. The issue is, a ton of undistributed money is sitting in DAF’s.
Two, and I can’t believe more isn’t said about this, the Great Recession scared the bejeebers out of our individual donors. More and more Baby Boomers are heading into retirement now and they say, “We’re not going to be caught short again.” They are moving their charitable giving to their estates, mostly through bequests made via their will or trust.
So, what would I suggest you do about this?
That’s for next time.
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