Is giving really going south?

Recently, the Giving USA 2019 report was released. Charitable giving in the U.S. was charted at $427 Billion (that’s with a “B”), the second highest total ever. Second-highest ever seems promising, but there may be hidden issues.

One thing that could be concerning is that while total dollars given increased 0.7% from 2017, giving by individuals, who make up 68% of the total, decreased 1.1% year over year.

And the recent Fundraising Effectiveness Project report had the number of donors decreasing by another 5.7% in the first quarter 2019 compared to 2018.

What’s going on here? Our economy is robust and tax cuts supposedly put more disposable income back into people’s hands. Which, we thought, meant more money available for giving. However, some conflicting indicators have emerged in the 18 months since the Tax Cuts and Jobs Act went into effect.

One major change was to raise the standard deduction. By doing so, the tax incentive to give decreased for up to 21 million people.

While we’ll likely know more in another year or two, it appears that middle class donors (giving in the $250 – $1,000 range annually) will be most affected. More significant donors – the top 15% who will still itemize – likely won’t show much change.

The question is: Will we be relying on fewer donors for more money?

More importantly, though, is a greater question about purpose. Deep down, what really motivates donors to give to these organizations?

Is it the benefit of getting a charitable deduction? Or is it the good feeling they get when they improve lives across the spectrum? I’d argue for the latter.

People give because they are people, and they have emotions. They also want to know that they’re making an impact. They feel pride in knowing their gift is helping teens at Boys & Girls Clubs benefit from new services and career paths. They pay respect and honor to service men and women at the USO through innovative transition programs. And they experience joy while watching a child with learning challenges at Miriam School blossom as she makes academic and social breakthroughs.

These nonprofits (my colleague Maryanne Dersch now calls them “human investment companies,” defining them by what they are, not what they aren’t) have a platform that allows people to express those emotions, whether outrage or pride or love. When you reduce donors to questions of taxes and deductions, you dehumanize them and limit their power to do good in the world.

My colleague in the Association of Philanthropic Counsel, Melissa Brown, boiled it down to this insight at our recent Forum in Detroit. She said,

“It’s our job to fill this space for our donors.”

So what should we do?

First, let’s stop worrying about whether donors are taking the standard deduction or anything else related to their individual tax situation. Yes, those are important. But they are secondary to the work being done every day.

Second, commit to telling more stories of your organization fulfilling its mission. Tell stories of those you serve, and of those who volunteer time, talent, ties and treasure. And tell stories of why donors are moved to give, how their gift makes an impact and allow donors to tell how giving makes them feel. Sharing more stories will remind your community that you care about them, that you’re doing transformative work, and that you count on them to give.

Finally, stay close to your donors. Bring them in for site visits and tours. Ask what motivates them to give – to your organization or any other. See if they have new ideas. They want to move the needle for those you serve. Listen and learn.

If you do, I believe your fundraising will not go south. It will flourish. Yes, some people may give more or less due to specific incentives. But, when you’re doing it right, those effects become minimized, since so many others give because they believe in you.