Gifts to Charity Dropped 1.7 Percent Last Year, Says ‘Giving USA’ - Michael Towner, Iconic Legacy

Photo by Ron Coddington

Last year was a tough one for many charities even though the overall economy was strong: Donations declined 1.7 percent, to $427.7 billion, according to the annual “Giving USA” report released Tuesday.
The drop in contributions — due largely to average Americans donating less — follows four years of sustained growth that reached a high of $435.1 billion in 2017.
A drop in total giving is relatively uncommon. “Giving USA,” which examines contributions from individuals, foundations, and corporations, noted that the decline was just the 13th drop in overall giving it had charted in the past four decades.
The decline could be a sign of trouble ahead, particularly if a recession is on the horizon and changes to the tax code cause a long-term challenge for fundraisers. Or it could be a sign that the erratic stock market in the last half of 2018, combined with uncertainty about the tax law, made last year especially difficult. Emphasizing that their results were based off of projections, researchers were careful to say that it was impossible to know yet just how concerned charities should be that giving was off last year.
Americans decreased their giving 3.4 percent from 2017 levels, dropping from $302.5 billion to $292.1 billion.
Historically, individuals have provided at least 70 percent of overall giving, but in 2018 they gave just 68 percent. Another 18 percent of contributions came from foundations and 5 percent from corporations.
One reason for the decline may have been that donors were spooked by the stock market’s nosedive in December. “Stock markets really went down at exactly the wrong moment last year,” said Thomas Kurmann, director of development at Doctors Without Borders USA.
“Even though the economy’s good, the markets have been on a rollercoaster, and that rollercoaster leads to uncertainty,” said Steve MacLaughlin, vice president for data and analytics at Blackbaud. When people don’t have a clear picture of their future, they usually forestall major financial decisions, like a large end-of-year gift, he said.
This donor hesitancy is significant because in recent years, many charities saw big donors making up for large losses in the share of middle-class donors’ giving. But that wasn’t the case last year.
“For many years, the biggest gifts — the megagifts — have been able to sustain growth and made up for the loss of household giving,” said Laura MacDonald, vice chair at the Giving USA Foundation and principal at the Benefactor Group. In 2018, however, those big contributions weren’t enough to stave off an overall drop in giving.
Outside of the “Giving USA” report, other philanthropy trackers are finding similar trends extending into 2019. The Fundraising Effectiveness Project, which measures annual fundraising rates, has seen donations from individuals continue to fall this year. In the first quarter of 2019, the number of donors shrank by nearly 6 percent, while overall donations decreased just over 2 percent.
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