Despite a strong economy, U.S. charitable giving dropped 1.7 percent, from $435.1 billion in 2017 to $427.7 billion in 2018, according to the annual Giving USA report, released June 18. A change in the tax law, a drop in the stock market at the end of the year, and a number of other factors relating to the economy might have caused the dip, with the biggest reduction coming from individual donations.
The report separates giving entities into four categories including corporations, foundations, bequests, and individuals. All tax-deductible donations are included in the count, and that can include those to charities and universities as well as faith-based organizations, foundations, and donor-advised funds.
The most remarkable data point from the report is that donations from individuals was down from $302.5 billion in 2017 to $292.0 billion in 2018. A new tax code that doubled the standard tax deduction in 2018 may have caused more Americans to forego itemizing their deductions, which can be more complicated. Without the need to itemize, some may have also decided to forego their charitable gifts.
Carmine Salvucci, a 25-year fundraising veteran and the chief development officer for Communities in Schools of Central Texas, says that while small donations to CIS were down in 2018, larger donations of $5,000 and above were up by 26 percent. “Given our fundraising strategies primarily focus on major gifts, our overall giving increased significantly in 2018,” he said. “However, gifts below $100 were down 12 percent in donors and dollars, perhaps as a result of those no longer itemizing who would also be less inclined to make multiple, small gifts to charities.”
Because individual giving has always accounted for about 70 percent of all donations, most nonprofits rely on it for a good portion of their funding, and that might need to change. Lisa Rodman, an Austin philanthropic advisor, says that healthy nonprofits seek out multiple funding sources. “In general, though, individual giving is still the biggest piece of the pie,” she said. “with larger gifts coming from wealthier households. That’s just common sense.”
For SAFE, donations decreased 4 percent from 2017 to 2018, with noticeable drops in workplace giving and annual appeals below $1,000. “It’s hard not to think there were external factors,” said Emma Rogers of SAFE.
Other nonprofits found success appealing to nontraditional donors. “Latinitas did its all-time best for individual contributions, tripling gifts from last fiscal year to this,” said Laura Donnelley, CEO of Latinitas. “In many ways, we represent the opposite breakdown of traditional giving in the United States. The bounty of support for Latinitas comes from communities of color. If giving is dropping because white baby boomers set the mainstream trends, we are usually untouched by that because we lean into young, first-generation wealth that has been supporting us all along.”