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Giving Gets Its Groove Back—But Grooves a Little Differently

First, the good news: for the fourth consecutive year giving by Americans has grown. Second, the REALLY good news: giving has nearly reached pre-recession levels.

There is SOME not so good news: not all categories of charity have rebounded. But the reality is that giving is up by more than four percent in the US, according to the newly released Giving USA report that looks at giving levels from 2013.

Giving USA: The Annual Report on Philanthropy for the Year 2013 highlights the estimated giving totals by Americans throughout the year 2013. The “estimation” is due to the slight fluctuation that may happen over the next two years based on additional input from the IRS. But, for the time being, giving in 2013 is reported to have reached $335.17 billion, which is the highest it has been since the Great Recession in 2009.

“This is the fastest giving has gone up in years,” said Jeff Wilklow, vice president of Campbell & Company.

Where’s It All Coming From?

Giving USA shows that 73 percent of the growth in giving from 2011 to 2013 has come from individuals. The closest behind individual giving is foundation giving, which contributed 15 percent of total giving in 2013.

Giving USA 2014 chart 1 ewire 

SOURCE: Giving USA Foundation | Giving USA 2014

The spike in individual giving can be attributed to several big gifts from wealthy donors equaling $80 million or more. “Major donors are restoring their confidence and trust in charities, following the recession,” says Wilklow.

However, not all donors are completely confident. The uncertainty doesn’t necessarily have to do with the charity they are investing in, but the uneasiness leftover from the Great Recession. “A lingering affect due to the recession is a donor’s concerns for their family. More people feel the need to leave more money aside for the family’s future, just in case,” says Stacy Palmer, editor of The Chronicle of Philanthropy.

Noticeably smaller on the giving scale is corporations, which declined by nearly two percent in 2013. However, over the past five years corporate giving has risen much faster than overall giving. In 2012, corporate giving grew rapidly at 16.9 percent, which helps explain why in 2013 corporate giving appears to have leveled out a bit.

Of those individual donors that ARE giving, it’s not just their giving that’s increasing—it’s also their need for more evidence and information about the organizations they are supporting and the impact of their gifts. “Donors are pickier and limiting the number of groups they’re giving to,” says Palmer. “The competition for a donor’s dollar is really intense.”

Where’s It Going?

Giving to the arts, health, the environment and education has been consistently rising over the past three years. These giving categories took a hit during the recession because donors reserved gifts for charities with immediate action, such as food pantries, homeless shelters and groups providing international relief. As the economy recovers, so do donors’ gifts.

Giving USA 2014 chart 2 ewire

SOURCE: Giving USA Foundation | Giving USA 2014

Though religion is still the largest charity category that donors give to, it didn’t grow in 2013. However, before religious groups sound the alarm, it’s likely this trend is more due to giving rebounding in other categories than any drop in support for these types of charities. Still, religion has been at the top of the giving pyramid for many years and continues to leave a large gap between them and the next giving category.

Education and healthcare giving is spiking because campaigns are back with a vengeance! During the recession many campaigns were put on hold, but now they’re gearing back up and are clearly seeing success. Likewise, giving to environment/animals is also up because wealthy donors give large amounts to those groups, especially as climate change continues to be a hot topic and concern.

Among the causes that are winning over donors are social services. “A lot of donors we’ve talked to are more focused on social issues,” says Palmer. Wealthy Boomers want to see ongoing issues like homelessness and mental health “fixed” while they’re still around to make that difference.

Despite the fact that overall giving to foundations declined in 2013, community foundations have had quite the bump over the past year—and not just because of Mark Zuckerberg and wife, Priscilla Chan’s now infamous gift of nearly $1 billion to the Silicon Valley foundation. Big gifts like that are what are put community foundations at the top of the giving chain. It appears that they are also doing a great job of engaging major donors—they are noted as the fastest growing sub-sector.

“Community foundations are doing an especially good job with reaching out to people in their communities—those who reside there now and those who have left,” says Palmer. “Encourage people to remember their hometowns, even once they’ve left.”

A category that is lacking gifts is international affairs, which decreased by 6.7 percent in 2013. “International giving has been falling since 2009 due to the fact that there have been no real large international disasters,” says Wilklow. “Additionally, with giving by corporations falling this year, there’s less going to international affairs, since that’s where a majority of corporations’ giving has gone in the past.”

All in all, we’ve seen increases in giving but it’s still uneven. “Some causes are doing great and some not so much,” says Palmer. “Even if you’re back to where you were [pre-recession] you’re still making up for a loss so it’s still not great. We’re not there yet.” 

How Do YOU Get It?

Over the last couple of years the buzzword was “impact”. Now that donors know they can get evidence of the impact of their gift, they’re moving on to a bigger need and want: innovation. “Wealthy donors with significant money want to be ‘WOW’ed’ with an idea to cure a social issue,” says Palmer.

Innovation and big ideas—that’s what donors are looking for, and they’re ready for it, too. “Donors are ready for ‘the ask,’ they just need to be approached with an innovative idea,” says Wilklow.

Online giving is also the portal to a donor’s dollar. As online giving continues to increase, so do the number of donors who give online. And giving online isn’t just reserved for small amounts—larger donors are also giving online because they want to use their credit card and get the incentives in return, like frequent flyer miles.

The key to a successful online giving and mobile responsive program is to test, test and test again. “Mobile is going gangbusters,” says Palmer. “Try to give through your own mobile giving site and see how easy it is. If you have issues, so do the donors.”

Organizations are also noticing a bigger need for branding and marketing. The more organizations invest in their brand, linking philanthropy and fundraising departments into the same brand and campaign, the more success they’ll have. Invest time and money into a seamless brand and marketing campaign that your organization can use.

But the best way to get to a donor is to become a donor, OR to become like who the donor is supporting. Your CEO, fundraising staff and board should reflect your members, donors and cause. “We need to start hiring diverse fundraisers who look like the causes we’re trying to support,” says Palmer. “AFP does a great job of encouraging this.”

Becoming a more diverse organization shows that you better understand the individual that your cause is supporting. Having a representative who understands those benefitting from your cause can help connect with and bring in more donors. “Demographics are more important than the money because that’s what is going to frame the future of giving,” says Palmer.

A Sneak Peek Into Giving USA 2014

Originally it was thought that giving would take several years to return to pre-recession levels, but if trends continue it could take just one to two more years to reach and even surpass pre-recession levels.

“The growth in giving over the past two years suggests that a return to the peak level of total giving we saw prior to the recession could occur sooner rather than later, if recent growth rates in giving continue,” said Patrick M. Rooney, Ph.D., associate dean for academic affairs and research at the Indiana University Lilly Family School of Philanthropy.

However, that is dependent on the stability of the economy, unemployment rates and corporate profits—as well as those wealthy individual donors that helped give the average giving levels a real boost in 2013. 

The Chronicle of Philanthropy’s “Philanthropy 50” list highlights the top 50 philanthropists every year. 2013’s list showed that living donors gave twice as much in 2013 than they did in 2012. “We looked at the first five months of this year in comparison to last year, and we’ve seen a slight slowing of larger gifts,” says Palmer. “This could be a timing thing, but it’s still notable that there hasn’t been a huge surge in 2014.”

Wherever we end up in 2015 (and hopefully it is UP), Wilklow encourages you to live in the now. “One day we may look back at this time and think that giving levels were so great,” says Wilklow. “So embrace it and enjoy it while it lasts.”

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