The results are in!Â
That is a phrase we are going to be hearing a lot of over the next several months. But for development professionals, hearing those words in June and July must only mean one thing: Giving USA Foundation released its annual report on charitable giving. And thus begins the slicing and dicing of the data and the many interpretations of this report.
Here is what we do know:
In today’s dollars, giving actually rose by 4%.
When adjusted for inflation, giving declined by 2%.
Corporate giving continues to lag, but just slightly.
Donor Advised Fund (DAF) contributions are still pretty murky in this report.
For many of us, our direction and plans shouldn’t change.Â
It is important to note that inflation does impact charitable giving. We are all feeling the pinch at the grocery check out, and that does impact many of the under $100 gifts that comprise a large part of nonprofit donor bases. For some, when faced with the decision to use their discretionary money to take the family out to dinner or to donate to their local theater company, family almost always comes first. But that shouldn’t stop us from asking and letting the donor make their own decision.Â
We know that our corporate partners continue to be generous, but we also know that their budgets are extremely volatile. Marketing and charitable dollars are often the first to be cut from a budget, making it difficult for nonprofits to count on these important dollars as sources of renewable income. For some communities, a company’s presence doesn’t always translate into charitable giving. Their charitable priorities may be in a different city and their executive leadership may also have their own projects and priorities.Â
Donor Advised Fund information is still pretty tricky to measure. We can track when a donor makes a contribution into a DAF, because it is considered a charitable contribution. But it becomes more difficult to follow when a DAF makes a grant and even more tricky to classify it. But we do know that DAFs are gaining momentum as a charitable vehicle.Â
The DAF Research Collaborative’s 2024 The National Study on Donor Advised Funds reports that in 2022 there were more than two million DAFs representing more than $86 billion in assets. The National Philanthropic Trust tells us that contributions to DAFs in that same time frame increased 9%. They go on to say that grants from DAFs also increased by 9% to $52 billion, a new high. If these numbers are any indication of what to expect from 2023 and beyond, we need to be paying attention. DAFs will continue to play a BIG role in charitable giving.
At the risk of sounding like a broken record, showing donors the impact of their contributions continues to be the best way to retain and increase their support. If organizations are willing to up their stewardship game by even just a little, people will notice. Sending the occasional handwritten note, dropping a text to your major gift prospects, recording a 30-second video of your mission (and their gift) in action and sending it to your donors - all of these are easy and affordable touch points for donors.
Individuals continue to be the most reliable source of contributions and growing and stewarding that pipeline is a best practice for long term sustainability. The fact that DAF distributions typically originate with individual donors makes good stewardship even more important. DAF grants may not show up in Giving USA but they certainly do at your charity.Â
John Mainella
Cape Fletcher Associates
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