Donors have an opportunity to build on last year's strong giving

Donors have an opportunity to build on last year's strong giving

According to Giving USA 2020: The Annual Report on Philanthropy for the Year 2019, charitable giving increased 4.2 percent in current dollars, to $449.64 billion, in 2019, making it the second highest year for charitable giving (when adjusted for inflation). While it's too soon to tell what that will mean for 2020, such a strong show of support for the charitable sector is an encouraging sign in what otherwise is an uncertain philanthropic environment, thanks to the spread of COVID-19.

Clearly, many Americans view generosity as an important part of their lives. The Giving USA data from 2019 and the philanthropic trends we've seen in past recessions (as reported in Giving USA) can help us understand what we should expect in these uncertain times.

A strong economy in 2019 resulted in more giving by individuals, corporations, and foundations, as well as increases in giving to organizations in all but one of the nine recipient categories tracked by Giving USA — six of which recorded their highest ever giving totals (adjusted for inflation) in 2019. The analysis also found that the growth in giving in 2019 was driven by a jump in giving by individuals, which rose 4.7 percent and logged its second-highest dollar total (adjusted for inflation) ever — and which handily remains the largest single source of charitable giving at 69 percent of total giving. In recent years we've also seen giving by foundations comprising an increasingly larger share of total giving emerge as a trend; in 2019, that share was 17 percent for the second year in a row, the highest on record.

The uncertainty around the COVID-19 situation in the United States makes it almost impossible to predict when and how quickly the economy will fully recover. Giving USA found that in 2007-09, the period immediately preceding and following the financial crisis, foundation giving grew 3 percent, even as overall giving declined 12 percent. And to date in 2020, we've seen foundations increase both the number and dollar amount of the grants they make to help fill gaps created by the virus, as well as accelerated distributions from donor-advised funds.

Dunham + Company's own study found that the oldest donors, regular churchgoers, and self-described conservatives were more likely to say they would maintain their giving at last year's levels or increase it. Many also cited COVID-19 as the main reason they plan to give more. However, the study also found that many donors were anxious about the virus and its impacts, causing a quarter (25 percent) of respondents to say they plan to cut back on their giving. From where we sit, the charitable organizations that have had success since the virus emerged as a public health crisis have pivoted quickly to donor-centric communications that emphasize the challenges donors might be facing while also affirming the relevance of their missions. Indeed, a number of our clients have recorded some of the best daily giving totals in their history over the past few months.

Conversely, the organizations that have struggled are those that have not been able to pivot, for whatever reason, to online giving and/or have not diversified their base of support. I'm particularly concerned for nonprofits in education and the arts, culture, and humanities — organizations that rely on major gifts or do not have large endowments — even though giving to these sectors saw double-digit growth in 2019. If they hope to maintain both their relevancy and viability, it will be important for these organizations, once we're on the other side of the pandemic, to be able to demonstrate that they weathered the storm and are in a good position to continue serving their communities.

Ultimately, donors have an opportunity and a responsibility to make their dollars count on behalf of the organizations and sectors they care about most. We still have time in 2020 to make this a year of solid philanthropic support for the charitable sector.

Rick Dunham is the immediate past chair of the Giving USA Foundation and founder and CEO of Dunham + Company. He has spent more than forty years in marketing, fundraising, and organizational development for nonprofit organizations. Giving USA, the longest-running and most comprehensive report of its kind in America, is published by the Giving USA Foundation and is researched and written by the Indiana University Lilly Family School of Philanthropy.

The sustainable nonprofit

July 12, 2019