Although donations to the nation's largest nonprofit organizations increased 11.3 percent in fiscal year 2018, fundraisers are concerned whether such gains are sustainable, the Chronicle of Philanthropy reports.
According to the publication's annual study of giving to nonprofits (including gifts of cash and stock), private support for the hundred largest nonprofits accounted for approximately 8.7 percent of all giving in 2018, as tracked by the annual Giving USA report. The strong showing by the nation's largest nonprofits underscores the widening gap between those charities and the rest of the sector. And the gap may be wider than it appears, as the study does not include individual gifts to donor-advised funds at community foundations or commercially sponsored organizations such as Fidelity Charitable. Had Fidelity Charitable been included in the study, it would have ranked as the largest charity in the country, having raised more than $9 billion — nearly triple the amount raised by United Ways ($3.01 billion).
While United Way Worldwide grabbed the top spot in the study, its support fell 6.8 percent in fiscal year 2018, continuing a years-long slide in revenue for the organization, largely due to declines in workplace giving campaigns nationwide. The Chronicle also notes that one reason large nonprofits are doing well is that they have focused their efforts on major donors — a group that has benefited handsomely as wealth inequality in the U.S. has hit record levels. Indeed, while institutions of higher education and healthcare organizations have long focused on securing major gifts, groups such as the Boys & Girls Clubs of America (#10) increasingly are turning to high-net-worth donors to boost their bottom line.
The ultra-wealthy also are attractive to large nonprofits because they are the least likely donor group to have been affected by the doubling of the standard deduction in the Tax Cut and Jobs Act of 2017. According to the Chronicle, the share of Americans who claimed a charitable deduction on their tax returns in 2018 plunged to 8.5 percent, from 24 percent in 2017.
"Since the last recession, the wealthy keep getting wealthier," Josh Birkholz, CEO of the fundraising consultancy Bentz Whaley Flessner, told the Chronicle. "The organizations whose business models are tuned toward high-net-worth philanthropy are the ones that are doing the best."
(Photo credit: Whit Pruitt for University of Arkansas)