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Q&A | Giving USA 2024 Webinar

June 2024

What is public society benefit, and can you give an example?

The public society benefit subsector includes civil rights, advocacy, community improvement, and voluntarism organizations such as the ACLU, United Ways, Junior Leagues, and Jewish Federations. Many of these organizations aggregate donations and redistribute them for public benefit. Donor-advised funds managed by financial institutions, such as Fidelity Charitable, are also included in this recipient category.

What is the breakdown of how many individual gifts go to religion vs. other types of organizations?

The vast majority of gifts to religion are given by individuals. Learn more here.

Are corporations giving fewer gifts at higher amounts (or is that only individuals)?

Corporations are giving at different levels depending on the vehicle, but there is some support for the idea that they are consolidating their philanthropic efforts into larger, more impactful donations rather than spreading smaller amounts across many different organizations or sectors.

Does the Annual Report acknowledge giving to politics, giving to elections, etc.?

Giving USA reports on charitable giving to 501(c)(3) organizations. Giving to political campaigns, political action committees (PACs), and other political entities is not accounted for in the report. This type of giving is tracked by different organizations and reports, such as the Federal Election Commission (FEC) and OpenSecrets, which specialize in political finance and campaign contributions.

Historically, political giving tends to rise significantly during presidential election years. While this may “crowd out” charitable contributions as people allocate their disposable income towards supporting political causes, there is some evidence that giving to some charitable organizations might increase if the cause is aligned with one party/platform or another.

In general, while presidential election cycles create a lot of “noise” and competition for attention and dollars, philanthropy remains resilient and adaptable. Nonprofits would be wise to stay engaged with donors and align their messaging where possible with issues and values that are bubbling up to the national stage.

Does the Annual Report discuss events as a mechanism with donors?

Giving USA highlights that events remain a significant mechanism for engaging donors. Despite economic fluctuations, events such as galas, charity runs, and auctions continue to be effective in raising funds and awareness for causes. These events provide opportunities for direct interaction with donors, creating memorable experiences that foster deeper connections and long-term support. The report provides specific information about them.

With the rise of donor-advised funds (DAFs) and family foundations, how is this changing the traditional ‘gala’ or event fundraiser?  We are seeing gala fatigue and donors switching from event giving to annual giving.  Are you seeing this as well?

Overall, while traditional galas are still a part of the fundraising landscape, two things of note are happening. First, individuals are moving more money into and through DAFs and foundations. Second, anecdotally we observe that more nonprofits are moving away from big galas and inviting individuals to engage through small gatherings and events.

Are we finding that high net-worth families are donating more to donor-advised funds (DAFs) at community foundations than to charities directly? Are more people donating their money to their own family foundations rather than to institutions?

High net-worth families have been increasingly using DAFs at community foundations (and other entities such as Fidelity Charitable), as well as their own family foundations, to conduct their philanthropy. To understand these trends better, The Giving USA Foundation has conducted research on DAFs, and here are some of the key findings:

Control and flexibility: DAFs offer donors greater control over their charitable giving. They can contribute assets to the DAF and receive an immediate tax benefit, then recommend grants to their preferred charities over time. This flexibility allows donors to plan their giving more strategically and make decisions that align with their financial and philanthropic goals.

Tax advantages: Donors benefit from tax deductions when they transfer assets into a DAF. They can also avoid capital gains taxes by donating appreciated assets directly to the DAF. These tax benefits make DAFs an attractive vehicle for charitable giving.

Growth and impact: Assets in a DAF can be invested and grow tax-free. This potential for asset growth allows donors to increase the impact of their philanthropic dollars.

Are there significant trends in “mission-aligned” corporate giving, such as giving to health care and food insecurity, where the bottom-line benefits are as important as the brand/social impact ones?

Recent trends in corporate giving, particularly in sectors like health care and human services, demonstrate a significant alignment with both bottom-line benefits and brand/social impact objectives. According to the Giving USA 2024 report, there has been a notable increase in “mission-aligned” giving, where corporations strategically target philanthropic efforts that not only bolster their corporate social responsibility (CSR) profiles but also enhance their market positioning and financial returns. For example, companies in the healthcare sector are increasingly investing in initiatives that address community health issues, which in turn supports their business by fostering healthier communities and reducing overall healthcare costs. This kind of mission-aligned giving ensures that the impact of their philanthropic efforts resonates both socially and economically. Similarly, companies involved in food production and distribution are focusing on food insecurity, creating programs that not only help alleviate hunger but also strengthen their supply chains and community relations.

Moreover, the shift towards such strategic giving is partly driven by the increasing sophistication of donors and stakeholders who demand that corporate philanthropy be both impactful and financially prudent. Companies are realizing that addressing social issues directly related to their industry can enhance their brand reputation, attract and retain employees, and ultimately contribute to their bottom line.

Overall, the trend towards mission-aligned corporate giving is a reflection of the evolving landscape of corporate philanthropy, where businesses are expected to play a pivotal role in addressing societal challenges while also achieving business objectives. This dual-focus approach is becoming a standard practice in the corporate sector, supported by the data and insights provided by reports like Giving USA.

What tools have been most helpful to strategize and target potential corporate organizations for partnerships? How are you identifying your targets, and are there any standard processes that have been successful in getting a foot in the door?

Nonprofits are leveraging several tools and approaches to strategize and target potential corporate partners. Data-driven decision-making is crucial, involving the use of donor management platforms to track and analyze various metrics, such as donor retention rates and giving patterns. This helps nonprofits tailor their strategies to engage potential corporate partners more effectively.

Additionally, integrating matching gift software and search tools into donation processes can boost the effectiveness of corporate matching gift programs, making it easier to identify and engage eligible donors.

With these approaches, organizations can ensure effective stewardship of the gifts to begin building and increasing a relationship.

Other processes for getting a foot in the door include developing long-term partnerships with corporations, understanding corporate priorities, and building relationships with local businesses. Board or committee members or top donors may be able to help with this exercise – opening doors and sharing their personal stories.

Is there any analysis of crowd-funding by recipient?

The Indiana University Lilly Family School of Philanthropy has done some research in this area, though it isn’t a focus in the Giving USA Annual Report in an effort to be consistent year-over-year in the way data is treated. Learn more here.

What’s the thought on why giving to religion has decreased?

The Giving USA report on giving to religion and this special report provides great information. In general, Giving USA’s recent reports indicate several reasons for the decline in giving to religious organizations. One significant factor is demographic shifts, with younger generations showing lower affiliation with religious institutions compared to older generations. This trend reduces the traditional base of support for religious giving.

Additionally, changes in religious attitudes and practices among younger demographics have influenced their charitable preferences away from religious institutions. Economic factors and shifts in donor priorities towards causes like education, healthcare, and international issues also contribute to the decrease in giving to religious organizations. Many cause-related institutions are addressing the important needs that, historically, religious institutions have broadly fulfilled. Learn more here.

While I appreciate the upbeat messaging on the overall results, it’s interesting that Personal Disposable Income grew by 3.8% (in real terms), Personal Consumption was up by 1.9% in real terms, and yet Individual Giving was down by 2.4%, and consumer confidence continues to be in a post-pandemic malaise. What’s your take on the drivers of the individual giving mindset and do you expect to see it improve in the coming year?

Several factors shape the individual giving mindset against a backdrop of economic growth and post-pandemic consumer confidence. Despite the rise in Personal Disposable Income and Personal Consumption, the downturn in individual giving can be attributed to several reasons. For instance, while the economy avoided a recession in 2023, personal savings remained significantly lower than in 2021. Moreover, persistent concerns about inflation, which has been higher than average for three consecutive years, alongside broader uncertainties stemming from the post-COVID recovery, the climate crisis, and global tensions, have contributed to lingering caution among donors.

Looking forward, the outlook for individual giving could brighten as economic conditions stabilize further and consumer confidence strengthens. Positive signals in GDP, the S&P 500, and consumer sentiment suggest a potential rebound but sustained economic growth and a resolution to inflation concerns will likely be necessary for individuals to feel financially secure enough to prioritize discretionary spending over essential needs.

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