Giving by individuals decreased from 70% of overall giving in 2017 to 68% in 2018. This is the first year giving by individuals has fallen below 70% overall giving since at least 1954.
Consider the bigger picture and you will note that this is part of an ongoing trend. In fact, giving by individuals has declined considerably as a percentage of inflation-adjusted total giving, from 83% during the five-year period beginning in 1979 to 70% during the five-year period beginning in 2014. Bequests have stayed relatively flat at 7-9% since 1979.
The Chronicle of Philanthropy and Graham-Pelton special report, “How America Gives,” shares evidence that fewer and fewer Americans are giving to charity, according to recent Chronicle data analysis. In it, editor Stacy Palmer writes, “rich people are making up the difference, keeping charity coffers full – especially as the middle class pulls back.”
As some may have feared, 2018 did not see a cataclysmic drop in giving due to the implementation of the Tax Cuts and Jobs Act. However, considering the bigger picture yet again, itemized giving by low- and moderate-income earners – those making less than $100,000 annually – has been declining for more than 10 years, even before the implementation of the Act.
Meanwhile, total dollars contributed by upper-income earners has soared, but not due to itemized giving. Average itemized giving has not increased, but the number of upper-income earners have more than doubled since 2000, to 19 million. As a result, those earning more than $100,000 now account for 75% of all itemized giving. Donations from households earning $200,000 or more now total 52% of all itemized contributions. In the early 2000s, that number was consistently in the 30% range.
As tempting as it may be to court major donors – and we will always promote the benefits of and return on a strong major gift pipeline and portfolio – don’t allow your fundraising work to be divided into the haves and have-nots. Institutions must also invest in sustaining and growing lower- and mid-level giving in order to build a culture of philanthropy and a pipeline of future major donors.