Charitable giving numbers down: your year-end gift matters even more

Starting early in 2018, national sources were sending up flares that charitable giving looked to be decreasing this year. That caused concern in the nonprofit sector because the only reason 2017 did not show a significant decrease in giving was a record-breaking fourth quarter.

A federal tax law passed late in 2017 significantly changed giving incentives, which may have been a key factor in the extraordinary jump in giving during the last quarter of 2017. Compared to the last quarter of 2016, there was a 47 percent increase for donors giving $1,000 or more with these types of gifts making up the most of those charitable dollars.

The Chronicle of Philanthropy released a study that said charitable giving has trended downward since the beginning of the 21st century. From 2000 to 2014, the share of Americans donating to nonprofit organizations fell from 66.2 percent to 55.5 percent.

Early this year Mike Geiger, MBA, CPA, president and CEO of the Association of Fundraising professionals, said, “Donors who give $50 to $250 annually are the mainstay of many charities that don’t have major gifts programs. The slow, long-term drop in the number of these donors is jeopardizing the work and impact of many charities.”

Several reasons for this decrease were suggested by the Chronicle of Philanthropy study, although there is no data to prove exactly which causes are having the most impact. The first suggested cause is that wealth is increasingly concentrated in fewer hands, while the middle class struggles with stagnant wages.

Generation X is smaller than both the baby boom and the millennial generations. So, the number of people turning 50 and entering their prime giving years is likely to remain down for at least a decade. In addition, many nonprofits do not have a history of cultivating donors of color although diversity is on the rise.

According to the study, people who are affiliated with religious organizations are likelier to give to both religious and secular charities. But the number of people in the U.S. who attend worship services or claim affiliation is down.

Americans now have new ways to personally engage in championing causes in addition to traditional charitable giving. Susan Raymond, chief innovation officer at Edmundite Missions, said those who care about the environment may have hybrid cars, install solar panels or buy eco-friendly products rather than giving to environmental charities.

Crowdfunding, the study noted, often earmarks money for individuals rather than charities for a variety of different needs. This type of giving is becoming increasingly popular and could be said that it competes with nonprofits for donations.

How can we reverse this trend to support Arkansas nonprofits that are in need? I believe giving in the amounts you can afford to the nonprofits in your community that are helping improve the quality of life for your family and your neighbors is the answer. Arkansas Community Foundation has tools to help you protect, direct and grow your charitable dollars as you learn more about what your community needs.

One of the most important tools is the Community Foundation’s online, downloadable Aspire Arkansas Report. It’s both a yardstick to measure where our state currently stands and a compass to help you and your neighbors determine where we should go. Equipped with data from this report, you’ll have the information you need to begin to identify the local needs you will address with your time, talent and treasure.

When you determine what needs you care about most in your community, take a look at the nonprofits you supported in the past and explore new nonprofits that are making a difference. If you need to know more, call or visit the nonprofits to ask questions and see for yourself how they perform.

Whatever giving method and nonprofit recipient you choose, consider making a year-end gift today. Be a part of the solution by doing your part to boost charitable giving for 2018 and make a plan for charitable giving in 2019 and beyond. You can make a difference. The Community Foundation can help.

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Editor’s note: Heather Larkin is the President and CEO of the Arkansas Community Foundation, a nonprofit organization that promotes smart giving to improve communities. The opinions expressed are those of the author.