There's a lot of good news to be found in the 61st annual
Giving USA report, which was released last month.
Earlier this year, the
Fundraising Effectiveness Project released its own set of giving data points. This annual report also focuses on giving, but provides very different information - and a different outlook.
So what, exactly can we learn from the data, and what does it mean for your nonprofit?
About the Giving USA 2016 Data
For more than 60 years, Giving USA has provided insights to annual giving. The 2017 report was compiled by the Lilly School of Philanthropy at Indiana University.
In 2016, charitable giving in the U.S. reached an all-time high: $390 billion. Think about that. That's more than a billion dollars given to charity, every single day last year.
And 2016 was the 7th year in a row that giving has increased.
More good news? Giving was up to all 9 subsectors for only the sixth time ever.
(The subsectors are religion, education, human services, foundations, health, public-society benefit, arts, culture and humanities, international affairs and environment/animals.)
The arts, the environment and international affairs saw the largest growth in charitable giving in last year. Many cite this as a response to the 2016 presidential election and, specifically, the new president's agenda.
Back to the data. Of the four sources of giving, living individuals were responsible for 72% of the total. Bequests (or gifts from estates) made up another 8%. This means that 80% of total charitable contributions came from individuals while living or at the time of their death.
Foundation gifts make up 15% of total giving, and corporate gifts make up the remaining 5%.
It's also notable that bequest giving was down (in dollars), whereas individual, foundation and corporate giving was up. Bequest giving is driven by the number, size and timing of high net worth individuals passing away.
Think about that. Even without any "mega" estates in 2016, the total dollar value of contributions reached an all-time record high.
How did that happen? Individual donors. Lots of individual donors and lots and lots of individual donations.
About the Fundraising Effectiveness Project and Survey Data
For 10 years, the Fundraising Effectiveness Project has measured fundraising results, by compiling data that is collected and shared by donor software firms, including Blackbaud, Bloomerang and DonorPerfect.
The 2017 Fundraising Effectiveness Survey Data found that there was net growth in terms of the number of donors. Not very much (about half of 1%), but growth is good.
However, the good news ends there. The survey found that nonprofits aren't doing a very good job of keeping their current donors, year over year.
The overall donor retention rate is 45%. This means that less than half of the donors who gave in 2015 gave again, to the same organizations, in 2016.
And, unfortunately, this isn't new information. Ten years ago, donor retention was only 50%. While a few percentage points better, nonprofits simply can't afford to lose half of their donors - or more - every year.
The statistics are even more grim for new (first-time) donors. The Fundraising Effectiveness Survey found that new donor retention is 23%. This means nearly 8 out of 10 first-time donors don't become repeat donors because they don't give again to the same organization!
Yet, we know that there were more donors than ever in 2016. And they gave more money than ever.
What Does This Data Mean To You?
There's a well-documented link between the economy and charitable giving.
Although the S&P 500 is generally more volatile than philanthropy, they typically follow the same trend line. The S&P was up in 2016 - so was giving. And all signs are pointing for a strong year in 2017.
Will we see $400 billion in charitable contributions in next year's Giving USA report? It's likely.
What about in the short-term?
When the stock market is up, giving by foundations tends to go up. That's good news, if you're a grantseeker.
Thus far, the current adminstration's policies have been good for business. That should mean higher corporate profits and, correspondingly, more giving by corporations.
Gifts to arts also increase when the stock market goes up (which we saw in 2016). Coupled with the buzz that followed the President's proposal to eliminate the National Endowment for the Arts, gifts to the arts have soared.
It's common for philanthropic interests - and contributions - increase as federal priorities shift. As an example, we're seeing a number of "rage donations" to groups, by individuals who are concerned with President Trump's agenda.
Take Planned Parenthood, which received nearly 80,000 donations just three days after the election. A climate action group, 350.org, saw donations almost triple in the weeks that followed. And the ACLU raised $24 million - more than seven times their 2015 total - in a single weekend (the same month that Trump took office).
Dr. Patrick Rooney with the Lilly Family School of Philanthropy
said this: "In 2016, we saw something of a democratization of philanthropy."
And it's true. In 2016 and so far in 2017, it's been many smaller donors - not the ultra-wealthy - who are making the donations. Lots and lots of donations.
But will these donors keep giving? And giving to these same causes?
There are countless reasons why an individual makes their first gift to an organization.
Anger, fear, frustration, disappointment.
Correcting an injustice, concern for others, to join others.
A challenge. Remember the ice bucket challenge? It raised $115 million for the ALS Association in 2014.
(And just last week, Hamilton creator Lin-Manuel Miranda launched the #Ham4All fundraising challenge to benefit the "Immigrants: We Get the Job Done" coalition. Fans - including
Ben Stiller and Steph Curry - have already made donations, then sung their favorite song from the musical and challenged others to do the same.)
Why else do people give? Well, there's love, hope, and the promise for a better tomorrow.
There's good news for smaller nonprofits, especially those who aren't in the news or political crosshairs and don't have celebrities supporting their cause.
Americans are very generous people. And the data shows that individuals will give to causes they care about.
Remember, too, that U.S. donors gave "over and above" last year. Even with the rage donations and surge of gifts to the arts, environment and international sectors, all nine nonprofit sectors experienced growth.
And don't forget that charitable donations reached record levels in 2016, exceeding $390 billion.
The challenge for all nonprofits is to get their donors to keep giving. (Interesting fact: donations to the ALS Association returned to pre-ice bucket challenge levels the very next year.)
So, how will you get your donors give again? And give more generously?
The answer lies in good stewardship - of your donations and your donors.
Think of each and every donation as an invitation - and an opportunity - to connect with your donors on a deeper and more meaningful level.
How will you make a connection with your donors?
Need help creating a donor stewardship plan? Laura Rhodes can help.
Send a message to start the conversation and learn how Laura can help you and your organization raise more money for your cause.
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Photo thanks to Steve Buissinne at Pixabay