For the past four years, the Philanthropy Outlook, a publication made possible by a partnership between the Lilly Family School of Philanthropy and Marts & Lundy, a leading fundraising and philanthropy consulting firm, has used a forecasting model to test variables to predict baseline measures of giving for the four sources of giving (individuals, foundations, corporations, and estates) and three subsectors (educational organizations, health organizations, and public society organizations).
This year, however, changes in federal tax policy at the end of December 2017 required a new way of structuring The Philanthropy Outlook.
Anna Pruitt, Ph.D., serves as project manager and writer, and Tessa Skidmore serves as project coordinator and writer for the Philanthropy Outlook at the Lilly Family School of Philanthropy.
“We produce the report and then a supplement to the report that is a guide to the model we use and the different variables that were tested for each source and subsector,” Pruitt said.
Skidmore added, “It’s a very technical model, but we work hard to make sure that people understand the different parts of it and have a good sense of what each of the variables mean.”
Changes in tax policy required the research team to re-examine the report, and they decided to add several new sections this year.
“We decided to provide more context, so we added a section on tax policy. We talk about the four sources of giving, the policy changes that occurred that will directly or indirectly affect these sources of giving, and the implications of that, through a comprehensive literature review,” Skidmore said.
“In other words, we’ve taken all of the information that’s been released in the aftermath of these changes and distilled it into the most important factors that fundraisers, scholars, and other practitioners should pay attention to.”
Another new section focuses on three different scenarios that bring together the economic factors included in the model and the new section on tax policies.
“We wanted to give people a sense of how these policy changes would impact the economic factors that go into the model and how they can use and manage the baseline projections,” Skidmore said. “As a result, we present an ‘if/then’ situation; we are starting at a certain point but if they hear that certain things are going on with the economy, then they can know what to expect. It’s a way to bridge the information we’re providing on tax policy and the model, which is primarily focused on the economy.”
The benefit to these new sections, Pruitt explained, is that they not only give fundraisers, scholars, and practitioners a real sense of what they can look out for, but how that might change giving as a result of these different factors moving in different directions.
“The new section on scenarios really brings everything together,” she said.
Overall, the two researchers are proud of the new sections that have been put together.
“We’re doing something unique by bringing in tax policy, the economic variables, and talking about how specifically they might work and what people can look for in charitable giving,” Pruitt said. “The report is useful, applicable, clear, and rigorous, and we think it will be an important tool for fundraisers and other practitioners of philanthropy.”
Abby Rolland is the blog content coordinator for the Indiana University Lilly Family School of Philanthropy.