A number of recently released reports provide different perspectives on trends currently affecting charitable giving in the United States.
Two of the most broadly followed reports, Giving USA 2018: The Annual Report on Philanthropy for the Year 2017 and the 2017 Voluntary Support of Education (VSE) survey, both revealed record levels of charitable giving for the most recent years studied. Additional studies by the Nonprofit Research Collaboration and the Blackbaud Institute provide more insights into fundraising trends that are impacting many fundraising programs.
Giving USA sets new record
Charitable giving from individuals, estates, foundations and corporations all increased in 2017, totaling an estimated $410 billion (up from $390 billion in 2016). Overall charitable giving was approximately 2.1% of Gross Domestic Product (GDP) and benefitted from continued economic growth in 2017.
There was a surge in philanthropic activity in December as some donors reportedly accelerated their gifts in anticipation of tax law changes.
Charitable bequests exceeded $35.7 billion in 2017. An estimated $106.22 billion in charitable bequests have been received over the past three years, another all-time multi-year record, perhaps representing the leading edge of the much anticipated “Great Wealth Transfer.”
The Giving USA Annual Report on Philanthropy covers more than 400 pages and includes in-depth coverage and analysis of contributions by source and recipient category. The entire report is available for purchase at givingusa.org.
2017 Voluntary Support of Education
The 60th anniversary edition of the Voluntary Support of Education (VSE) survey found that gifts to reporting colleges and universities grew 6.3% to $43.6 billion, the highest amount ever recorded (see table above). As seen in the Giving USA report, individuals represented the number-one source of contributions to higher education. Last year, contributions from both alumni and non-alumni individuals increased. Nearly half a billion dollars were given in the form of deferred gifts and nearly three billion more in the form of bequests.
Charitable bequests and deferred gifts accounted for approximately $3.3 billion in the 2017 VSE. For the 430 survey respondents, an average of 21 bequests were received in the 2017 fiscal year. This group also reported an average of 27 new bequest intentions. The three largest bequests accounted for a majority of all bequests received by various types of colleges and universities.
Also of interest to development executives will be the increase in the total value of gifts of securities to higher education, which grew from $2.4 billion in 2016 to $3.05 billion in 2017. This represents a 27% rise in the value of donated securities for 2017. The number of such gifts also climbed some 22% from 50,034 to 60,916. The average gift of securities was more than $50,000.
For more information or to order the full report, including individual institutional data, visit cae.org.
What to do now
Wealth transfer: the next decade is likely to see a record amount of wealth transferred from estates, creating an opportunity for the nonprofit sector to benefit.
Tip: Consider consistent marketing and communication strategies for the 65-74, 75-89 and 90+ donor segments made up of older Boomers, Silents and G.I. Generation. Studies show that the last wills, executed when donors are in their 80s, include charities for the first time in 50% of the cases. There is still time to ensure your share.
Income and wealth: Recent increases in income and wealth provide another opportunity for fundraisers. While the increases are relatively broad-based, rising real estate and securities prices have primarily benefitted the top quintile of families.
Tip: Consider the benefits of using income and wealth estimates to better target affluent individuals for larger gifts of stock, real estate and other appropriate property. Many planned and major gift donors will be found among the top 20% of households. Recent tax law changes make these gifts more attractive than ever because a donor need not itemize deductions to enjoy capital gains tax savings.
The surge of giving in December 2017: The acceleration of gifts in anticipation of tax reform in 2018 may have driven giving to an all-time high last year. That may create a challenge for the current year. Several studies are predicting a relatively minor drop in giving for 2018.
Tip: While every gift, regardless of size, is important and appreciated, remember the importance of larger gifts to the success of your annual fundraising efforts and make sure that those donors are aware that tax reform had little or no negative impact on the tax benefits associated with their gifts. Consider targeted newsletters, booklets and digital content in the second half of 2018 that delivers that message. Click here for suggested communications. ■
Other Recent Reports on Charitable Giving
2017 Charitable Giving Report, Blackbaud Institute
This report is based on data on nearly $30 billion in charitable gifts tracked in the Blackbaud Index and discusses fundraising trends by sector and organizational size including statistics on donor characteristics and gift size.
- Giving data represents 8,453 organizations and $29.7 billion in gifts.
- Overall giving increased 4.1%.
- Online giving continued to grow to about 7.6% of all gifts.
- December was the most generous month of the year, with 18.2% of overall giving.
- Over a third of all giving occurred in October, November and December.
- The average age of U.S. donors was 64.
The AFP, APC, CFRE, Giving USA and CGP are the members of the Nonprofit Research Collaborative. The project, based on more than 1,300 survey responses, is managed by Melissa S. Brown of Melissa S. Brown and Associates.
- 63% of survey participants reported an increase in charitable giving in 2017.
- 75% met their fundraising goals in 2017.
- Major and planned gifts ranked as the top two fundraising methods utilized.
- The average size bequest at the median was in the range of $25,000 to $100,000.
- Growth in giving nationally was uneven and the Northeast and Midwest saw a drop in the share of organizations with growth.
- About 60% of U.S. charitable organizations plan to inform their donors about recent tax law changes. ■