As Good as It Gives: America’s Philanthropy Today (Giving USA 2018 Numbers and Beyond)

 

By Brenda B Asare, President & CEO, The Alford Group

The Alford Group sponsored this year’s Giving USA event in Chicago with Lipman Hearne and the Baumhart Center for Social Enterprise and Responsibility. We shared the recently released Giving USA 2018 numbers, discussed new research on megadonor archetypes, and hosted a panel of local experts to discuss what it all means for the social sector. Here are the main takeaways.

Giving USA 2018 Numbers

(Report on Philanthropy for the Year 2017)

Total giving in 2017 reached its highest level ever, surpassing the $400 Billion mark for a total of $410.02 Billion.

Giving has been on the rise for the past few years. This year, giving increased among all four sources (corporations, foundations, bequests and individuals), with corporate giving increasing by the largest amount at 8 percent growth (5.7 percent adjusted for inflation). This growth from corporations is in part due to a $405 million bump in corporate gifts to natural disasters in 2017.

Growth in giving from individuals grew by 5.2 percent (3.0 percent adjusted for inflation). It has become clear that there is a correlation between a strong economy and philanthropic giving as demonstrated in the graph below.

Eight of the nine charitable subsectors realized growth in giving with giving to foundations having the highest growth of 15.5 percent (13.1 percent adjusted for inflation). The arts, culture and humanities subsector had the next highest growth at 8.7 percent (6.4 percent adjusted for inflation).  The only subsector that experienced a decline in giving in 2017 was international affairs, and yet still reached its fourth-highest level of giving ever.

Overall, 2017 was a strong year for philanthropy.

The New Megadonor Archetypes

Researchers from the communications firm Lipman Hearne presented their latest study of the billionaires who have signed the Giving Pledge, pledging to commit more than half of their wealth to charitable causes. Lipman Hearne analyzed these donors and generated insights about how and why they make transformational gifts. The new megadonor archetypes were developed from this data and can be applied to donors of all levels.

Click here for full descriptions of each archetype.

What does this mean for the future of philanthropy?

Our panel of experts (Patricia Barretto, Harris Theater; Jason Baxendale, The Chicago Community Trust; Jennifer Steans, Financial Investments Corporation) discussed what this information means for the charitable sector.

#1 Differentiation is important.

As giving increases, competition among nonprofits to secure those funds increases as well. There are more not-for-profit organizations today than ever before. This is both an opportunity and a challenge. It is an opportunity to collaborate with other organizations and increase societal impact together. At the same time, it is a challenge to cut through the clutter and reach/connect directly with donors and prospective donors. Organizations need to differentiate themselves and zero in on their mission and philanthropic value proposition.

#2 Personalized communication is key.

The megadonor archetypes research shows that donors are approaching philanthropy from different viewpoints. For example, the Strategist avoids short-term, quick-fix solutions and works toward systemic change while the Explorer prefers incremental projects and spends time pivoting between them. An organization must approach these two donors very differently to compel each to become involved and engaged. This means individual, personalized communication strategies are critical to meeting these donors where they are at.

#3 Some questions are left unanswered.

There are still some questions that remain. How will the new tax structure affect overall giving in the future? How is the political climate affecting giving overall and in specific sectors? Which organizations and/or sectors will successfully slow donor attrition?

These are all questions that are being tracked, but it’s too early to know the answers just yet. As time moves forward and more data is collected we will all be eager to learn these outcomes and trends.

We will tackle these topics and more in our upcoming webinar series. Please check back soon for more information!

 

Giving USA: The Annual Report on Philanthropy is the seminal publication reporting on the sources and uses of charitable giving in the United States. The production and release of Giving USA is the result of the collaborative efforts of Giving USA Foundation, a public service initiative of The Giving Institute, and Indiana University Lilly Family School of Philanthropy. The Alford Group is a founding member of the Giving Institute and can provide you with a 30% discount on the book and/or materials. Visit givingusa.org and use the code “alford.”