Earlier this month the Giving Institute released this year’s Giving USA Annual Report on philanthropy. The report is the longest running and most comprehensive report of its kind in America. It provides a cornucopia of insight into nationwide and subsector trends from 2016. We highly encourage you and your organization to take a dive into the report, particularly on sections relevant to your subsector. In the meantime, here’s a list of key takeaways and lessons we think anyone in philanthropy should walk away with.
10 Key Takeaways
Most Philanthropic Year Ever:
2016 saw a historically high level of total giving by American individuals, estates corporations, and foundations, at $390.05 billion–a 2.7% increase from the previous year.
Steady Post-Recession Growth:
Considering total giving as a percentage of GDP or of disposable income those levels have remained similar to rates of the past, meaning giving growth is mirroring modest but consistent post-recession GDP growth.
72% of All Giving from Individuals:
Giving by individuals grew by $10.53 billion, a 3.9% increase from 2015.
More Corporate and Foundation Giving:
Giving by both corporations and foundations grew by 3.5% from 2015 and together compose 20% of total giving.
Contributions through bequests fell by 9% but the decline was more than offset by individual giving and bequests is an inherently volatile category.
Studies have shown that Generation X is more likely than other generations to volunteer and focus donations on fewer, more specific nonprofits, and that potential has been underutilized.
Limited Elections Impact:
The 2016 political season surprisingly did not strongly affect Millennial engagement but the election season did lead to some anecdotal giving growth in the Public-Society Benefit subsector. Large-scale economic factors tend to be more influential.
Growth of Online Giving:
Online giving has grown across the sector but remains underutilized in some subsectors.
Philanthropy Increasingly Driven by America’s Wealthiest:
More than 91% of high-net-worth households give to charity and the majority of wealthy Americans donate and volunteer
Giving to All 9 Subsectors Saw Growth:
All but two of the subsectors recorded the greatest recorded inflation-adjusted levels. Despite being the smallest sectors, international affairs, environment/animals, and arts/culture/humanities saw greater rates of increase.
10 Major Lessons
More nonprofits must internally assess their retention strategies.
Despite growth in online channels of giving, donor acquisition is still costly and retention rates are declining nationally. Consider aspects such as communicating good stewardship, recall initiatives, expressing gratitude, illustrating impact, and maintaining engagement.
Donor-advised funds could potentially be a powerful fundraising method.
Donor-advised funds are flexible, easy to create, relatively affordable, immediately tax deductible, and easy to keep record they allow for larger, more consistent donations. But there are also challenges in reaching them and applying for grants. Refer to the special chapter on Donor-advised funds in the report.
Consider communicating planned gifts options.
Long-term donor relationships can be developed by opportunities such as “younger” donors listing a charity as a 401(k) or 403(b) pension plan beneficiary while they are working.
Offer more flexible volunteer opportunities for those with limited discretionary time.
There is increasing corporate interest in supporting causes that employees care about and investments tend to follow. Make it easier for individuals to volunteer when they can, such as on evenings and weekends.
Understand where growth is happening or what potential fundraising methods are going untapped in your subsector.
For example, as identified in the report: religious organizations should consider #GivingTuesday as there have been positive results in recent years and they should invest in campaign software and record keeping systems to ensure accountability that donors have come to expect.
Online giving is becoming important in many subsectors, so better equip your organization to accommodate these changes.
Growth in online giving is either outpacing other methods or is the dominant channel in religion, human services, healthcare, arts and culture, environmental and animal, and public-society benefit subsectors. Religious organizations were particularly under-equipped.
Adapt declining old methods; maximize new opportunities.
Traditional peer-to-peer fundraising events are on a nationwide revenue decline, especially in the healthcare sector. Instead, use peer-to-peer as tools for prospect engagement and communications. 2016 has seen some successful social media campaigns, celebrity involvement, and targeted spotlighting around “viral” giving stories. Transition the attention into long-term donor engagement by incorporating these stories into multi-channel marketing strategies.
Consider non-traditional giving methods and innovative fundraisers.
Innovative fundraisers in the arts/culture/humanities that integrate mission-based experiences into their events have been able stand-out and garner success. Crowdfunding is another emerging giving method that has given organizations, especially in the international affairs subsector more options to attract giving.
Utilize giving days, especially to garner younger donors.
Giving days are not only great for fundraising but in increasing awareness and constituent engagement. Setting up a plan for follow-up and engagement after the giving day is especially important to really maximize the benefits of giving days.
Equip your organization to be responsive and ready during relevant social/political events.
2016 was a big year in fundraising boosts following events such as the election or the Dakota Access Pipeline. These moments can be invaluable in engaging with donors and giving surges. Maximize these opportunities by utilizing social media and conducting online giving campaigns.
Overall, the outlook of the report shows that we are returning to and exceeding pre-recession giving levels. The nonprofit sector as a whole is growing steadily in tandem with the country as a whole. While there are persistent challenges and lingering uncertainty, there are also opportunities that await to be tapped.
We can help you face those challenges and capture opportunities. Learn more about how NeonCRM can help you realize these lessons with our donor and member management software, marketing communications tools, event management, analytics reporting, and more.