Reflections and recommendations for nonprofits based on the new-norm of uncertainty.
Regarding the economy and philanthropy, most of us predicted a considerable decline of the GDP and giving. But contrary to those expectations, 2020 brought a strange, end-of-year outcome: according to Giving USA, charitable giving reached a record $471.44 billion in 2020.What happened? Major gifts saved the day. Some fundraisers would say 2020 was a record year. For example, Mackenzie Scott, the writer, philanthropist, and owner of Amazon shares demonstrated a game-changing strategy worth noting. Trust-based giving. Her philanthropy is often under the radar, sometimes anonymously, and remarkably rapid. Hundreds of organizations received grants of $1 million to $10 million with little to no strings attached. As my guest Rick Happy, Principal & Managing Director at CCS Fundraising says, “I have to believe you’re going to start seeing shifts in how the wealthy, at the highest wealth, are giving their money away. Maybe fewer strings, less constrained, less oversight, faster decisions, more impactful decisions – we could be on a new course here.”That said, the trend of giving for the everyday American is on the decline. In 2005, families that earned $1M+ accounted for 12% of charitable deductions. In 2018 families who earned $1M+ accounted for 33% of charitable deductions. Last year 20 million fewer households gave than the year before. This is a big problem. Income inequality is a huge issue in this country and in philanthropy. Every year we are seeing fewer and fewer donors. So when we hear positive headlines about philanthropy and the increase in giving, it’s important to go deeper into the numbers. Although we see an increase in giving year over year, the number of donors has been decreasing over time. As the fabric of a civil and democratic society, this is a serious challenge for the nonprofit sector, especially regarding the survival of robust programs. We need to do a better job engaging people at all levels of giving.

While some organizations benefited from the outpour of support during the year of crisis, others were forced to lay-off staff, shutter doors, or merge to survive. Two sectors saw decline according to CCS’s Philanthropic Landscape Annual Report 2021: healthcare (3% decrease) and the performing arts (4% decrease). Performing arts organizations really struggled, and as long as we are virtual, this is going to be a challenge.

One thing we know for sure: wealth is not an indicator of generosity. Grassroots fundraising is having a new day especially online. In fact, social media was the area that grew the most in giving in 2021; online giving accounted for 13% of overall giving—up from 10% in 2019 and continuing to increase. I’m eager to encourage everyone to engage with causes they care about to buoy our community at large.