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2018. “A Complicated Year.”

by | Jun 24, 2019

Complicated.

Both Jeffrey Byrne and Dr. Patrick Rooney emphasized this in introducing the Giving USA 2019 Report. (And a sincere “Thank You!” to NonProfit Connect for once again organizing and hosting this annual presentation!)

Overall, contributions in 2018 were $427.71 billion, up a meager 0.7% from 2017. Giving from Individuals, which still dominates the landscape (68% of total), was down 1.1%; Giving by Foundations (18% of total) was up 7.3%; Giving from Bequests (9% of total) was flat and Giving from Corporations (5% of total) was up 5.4%.

Rooney cited four factors that “conflated” to create the complicated climate for 2018 charitable giving:

  • Policy Changes. The 2018 Tax Reform and Jobs Act doubled the standard deduction; the number of households itemizing deductions is expected to drop by half, which may reduce incentive for giving. However, it also raised in maximum charitable deduction which may provide high net worth individuals increased incentive to give.

  • Economic Volatility. The economy was robust the first three quarters, but the stock market plummeted in the fourth, giving investors a downhill ride they hadn’t seen since 1931.

  • Regression to Mean.” 2017 was a record-breaking year for charitable giving; 2018 may simply be a return to reality. Rooney pointed out that sectors which saw the largest growth in 2017 also saw the largest decline in 2018.

  • Changes in Giving Patterns. As the balance in income distribution shifts, donor advised funds and major giving have grown while gifts from households at median income levels or below have fallen. In addition, some traditionally strong sectors (e.g., religious and educational institutions) appear to be diminishing in appeal while smaller “upstart” sectors (international or animal/environmental causes) appear to be growing stronger.

These factors affected — and continue to affect – different organizations differently. To effectively manage these changes, Rooney suggests you work to:

  • Understand new trends in giving (from donor advised funds, as an investment tool, to social media as a cultivation tool).

  • Talk with donors about how policy changes affect them.

  • Embrace new financial trends.

  • Be responsive to the shifting landscape of philanthropy.

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