By Aja May Pirtle and Bill Stanczykiewicz, Ed. D.
We’ve rounded up the top learnings from 2021 to set fundraisers up for a successful 2022.
Educate yourself about Donor-advised Funds.
A new study from Giving USA Foundation and the Indiana University Lilly Family School of Philanthropy provides new illumination on DAFs and their space in the philanthropy landscape: Grants from DAFs gave more total dollars to education and less to religion from 2014 to 2018 compared to the distribution of total U.S. giving as identified by Giving USA. Education received 29% of DAF giving, but only 14% of total giving in Giving USA for that period. In contrast, grants to the religion subsector represented 14% of giving from the DAF sample, but 31% percent of total giving in Giving USA.
The distribution patterns by DAFs track more closely with the trends of high-net-worth donors, who are associated with giving to education and arts at higher levels than the average donor. Granting patterns from DAFs are relatively stable, with each type of nonprofit receiving a similar percentage of total DAF giving from year to year. Roughly 60% of grant dollars from community foundation DAFs stayed local, and nearly one-quarter of grant dollars not given to local organizations went to education.
The pandemic lives on in giving trends, especially for women.
It will come as a surprise to no one that the effects of the COVID-19 pandemic are playing a part in giving. A report from the Women’s Philanthropy Institute finds that while giving by all household types increased between May 2020 and May 2021, both single women and married/partnered couples gave less to charity compared to before the pandemic and compared to single men. This trend differs from previous research from WPI and others, which has consistently shown that single women and couples are more likely to give than similarly situated single men.
Digital fundraising is key to future-proofing.
Charitable organizations worldwide report that digital fundraising capabilities and strategic financial planning are among the most crucial skills they need to remain resilient. The findings appear in the sixth volume in a series of reports, Future-Proofing Nonprofits for the Post-Pandemic World, The Voice of Charities Facing COVID-19, Volume 6.
Women are a growing influence in household giving decisions.
The Women’s Philanthropy Institute recently released Women Give 2021: How Households Make Giving Decisions, which explores charitable giving decision-making in the general population. The report analyzes the first new data on this topic in 15 years, and finds that 61.5% of couples make giving decisions together — a number that has declined from 73.4% in 2005. When one partner in the household decides, women are more likely to do so.
Women Give 2021—which is funded by a grant from the Bill & Melinda Gates Foundation—found that couples who decide together about charitable giving are typically older and have children, while younger couples are more likely to decide separately or have one partner make the decision for the household. The report suggests this may be due to couples marrying later and entering the relationship with preferred charitable causes, in addition to shifting gender roles within couples. Among sole deciders, individuals have varying thresholds for how much they will give without consulting their partners; this amount is much higher for men compared to women.
Crowdfunding campaigns attract different donors than traditional campaigns.
Charitable Crowdfunding: Who Gives, to What, and Why? examines who crowdfunding donors are, their motivations for giving this way, how they are different than more traditional charitable donors, and the activities they support. Among the significant findings? Crowdfunding donors tend to be more diverse, younger, less religious and more likely to be single, compared to traditional charitable giving donors. Also, nearly 20% of donors typically give to social justice causes. In comparison, 27% of those who give through crowdfunding support social justice causes.
In Gender and Crowdfunding, the Women’s Philanthropy Institute found that women crowdfunding donors tend to be younger, have higher levels of education, and are more concentrated in the Western U.S., compared to women who do not give to crowdfunding campaigns. The study also examined what might hold women donors back from using their influence to promote generosity through crowdfunding. For example, they are willing to share about causes and projects on social media but are reluctant to directly ask the people in their networks to give. Women also say that crowdfunding can highlight and help donors connect to projects, but they express concerns about transparency and accountability.
Another study shows that donors of color are more likely to engage in informal giving, volunteering or giving through crowdfunding sites. Thirty-four percent of donors of color said they give through crowdfunding sites in a typical year. About 90% had heard of crowdfunding, and 52% said crowdfunding makes it easier to directly support causes by giving.
Awareness of diverse populations’ philanthropy is increasing.
People of color and others from other diverse communities have always been deeply engaged in philanthropy in a wide variety of ways. That has often gone unrecognized, but awareness of diverse philanthropy, its importance and scope is expanding. A recent study by the Muslim Philanthropy Initiative found that on average Muslim Americans give more to charity than non-Muslim Americans. And a new study of donors of color strengthens understanding of the philanthropic perspectives and practices of diverse communities.
Racial and social justice causes also are a growing part of the philanthropic landscape. The study found that 16% of American households gave to racial or social justice causes in 2020, an increase from 13% of households in 2019. Philanthropic giving to racial and social justice causes increased across all demographic groups, but the growing impact of crowdfunding and mutual aid demonstrate how donors of color are helping to lead shifts in individual giving patterns.
Giving is up…and down.
The Giving USA 2021 report from Giving USA Foundation and the Lilly Family School of Philanthropy showed an encouraging picture of giving in 2020. Total charitable giving grew 5.1% measured in current dollars over the revised total of $448.66 billion contributed in 2019. Adjusted for inflation, total giving increased 3.8%. Another study of giving by affluent Americans, showed that generosity from this group was steadily high.
However, new research shows that for the first time in nearly two decades, only half of US households made a charitable gift in 2018. That is a drop of almost 17 percentage points from 2000, when 66.2% of American households gave charitable donations.
The market is well-primed for giving.
The stock market finished in positive territory at the conclusion of 2021. Research from Giving USA Foundation and the Lilly Family School of Philanthropy reveals a strong correlation between the performance of the S&P 500 in a calendar year and charitable giving the next calendar year. The S&P 500’s positive showing in 2021 bodes well for charitable giving from individuals and grants from foundations in 2022.
It’s never to early to talk about a planned gift.
More millennials are writing wills which could mean this is a good time to talk with them about planned giving. A study from the National Association of Charitable Gift Planners revealed significant interest in planned giving due to the pandemic.
Here comes crypto.
While many of us are still asking “what is crypto?,” activity in 2021 has shown it’s a viable fundraising option. Giving Crypto Tuesday raised $11 million for 1,000 charities. For example, one nonprofit has taken full advantage of this new trend: Charity:water’s current crypto campaign has raised nearly $5 million and counting.
Looking for more ways to prepare for 2022? Check out the weekly podcasts from The Fund Raising School.