As I See It: Focus on Building Sustainable Giving Models Considering Decline in Charitable Giving
Last month Giving USA announced in their Annual Report on Philanthropy for the Year 2022 a 3.4% (10.5% adjusting for inflation) decline in charitable giving. The cause is being attributed to economic uncertainty from inflation and drops in the stock market. Individual giving has been on the decline for the past seven years and last year the rising cost of living resulted in an all- time low for this constituency.
I want to amplify Mike Greiger, president and CEO of the Association of Fundraising Professionals and the AFP (Association of Fundraising Professionals) Foundation for Philanthropy’s recent expressions of concern. “Apart from the fact that high inflation makes the year-on-year results that much more stark, the numbers suggest a return to the familiar decade-long decline in donors we saw prior to COVID. As an industry, we need to find ways to be more proactive in building sustainable giving models so we aren’t dependent on economic forces we can’t control,” said Grieger in a recent Mike’s Message.
Greiger suggests that one thing we can do is encourage your representatives in Congress to support the Charitable Act, a bill which, if passed, would reinstate the universal charitable deduction, which expired at the end of 2021. The proposed Charitable Act aims to incentivize individual giving and reverse this decline by reinstating and raising this deduction to $4,600 for individuals ($9,200 for joint filers). According to Greiger’s July 3, 2023, President’s Perspective Blog, while a charitable deduction of $300 ($600 for joint filers) was in effect in 2020 and 2021, there was a near 11% increase in small donations in the $300 to $600 range. In 2022 after the deduction expired, there was a 5% decline in giving. A new form on the AFP website makes it easy for you to find your representative and send them an email letting them know how important this bill is to your organization (and the sector).
In addition to these reflections, I want to add that throughout our practice, M. Gale is recognizing that too many nonprofit organizations are overly focused on top of pyramid donors and their repeat giving to make ends meet. Often due to staff time and resources coupled with underdeveloped or underused information from their technology, nonprofits have become over reliant on major gifts from a few individuals or funders. Considering the amount of time and money it costs to acquire new donors, developing a sustainable giving model for small and mid-sized gifts requires specific planning and attention. Further, creating meaningful gratitude and stewardship touch points, and training staff and volunteers to implement them, is critical to keeping newer donors who have made small first or second gifts engaged.
If we are united in the belief that all people may be generous and give of their time, talent, and treasure, then focusing our effort on offering opportunities and recognizing generosity, at all levels, may go a long way. The two record-breaking years of giving in response to the COVID-19 pandemic demonstrated that when there is genuine urgency and need, people respond.
If you are interested in more information and/or purchasing the Giving USA Report for the year 2022 visit the Giving USA website.
Does your organization need help building a sustainable giving program? M. Gale would love to visit with you about development assessment and planning, as well as organizational readiness. Reach out to us at: info@mgaleassociates.com or call 888-647-7942.
As President and Founder of M. Gale, Missy Gale has dedicated almost three decades to crafting unique strategies and solutions to complex fundraising projects and organizational issues, resulting in transformational fundraising success for her clients. With more than 14 years at the helm of M. Gale, Missy has assisted nonprofits in North Texas and the Southwest in the areas of healthcare, arts and culture, human services, and education. She has been honored as the Outstanding Professional Fundraiser by the Association of Fundraising Professionals Fort Worth Metro chapter and named A Great Woman of Texas by the Fort Worth Business Press. Dedicated both professionally and as a volunteer, Missy is currently serving as a board member of the Giving USA Foundation, and as a committee member for the Santa Fe Farmer’s Market Institute.
