The American Giving Landscape

The Chronicle of Philanthropy has published its annual “How America Gives” report and the results prove interesting.  As America pulls out of its recession, patterns of giving seem to be shifting.  The study, based on a comparison of IRS data show that when comparing 2006 to 2012, wealthy Americans (those who earn $200,000 or more) gave 4.6% less of their income to charity.  Conversely low to middle class donors (those who earn less than $100,000–including those with two income earners) donated 4.5% more of their income to charitable causes.  While the wealthy American’s donated a smaller percentage of their income, the segment increased their giving by $4.6 billion reaching $77.5 billion dollars in 2012 (adjusted dollars for inflation) while those under $100,000 contributed $57.3 billion.

Lessons to be learned

While the wealthy donor continues to be important, due to the ability to make a gift of significant amount, it appears that the process of identification, cultivation and solicitation will get more difficult.  Our wealthy prospects are contributing less of their income charitably, yet there are more of them.  This is a segment that needs attention especially the on-boarding of new donors.  The lessons learned by many nonprofits was that those at the lower-income level were the people who dug deep and helped during trying economic times.  The article speculates that many in this segment are closer to the recipients receiving services and as such feel the need to continue to help even during more difficult times.

cycle of fundraising 2014

Now more than ever an organization must pay attention to the Cycle of Giving.  Do you have a clear process to identify, cultivate, ask, thank and engage?  As donor behavior shifts, it is important to invest in the fundamentals of good development.  By doing so, you are building your nonprofit to last with the ability to weather the storms that you will inevitably encounter.

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