The Giving USA 2015 Report on Philanthropic Giving, the annual report on the state of philanthropy in the US, was released on June 16 from the Giving Institute. In our 4-part webcast series, GG+A experts weigh in on this year’s findings and their implications for development professionals and philanthropic management.
This year, our experts cover Overall Trends in Philanthropy, Education, Healthcare, and Arts & Culture.
In this post, GG+A Chairman Martin Grenzebach looks at Overall Trends in the 2015 report and provides insightful observations about current trends fundraisers should be paying attention to most.
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Overall Trends in Philanthropy
“The bigger the gift, the more the donor wants
to invest in something distinctive, unique, and transformational.”
– Martin Grenzebach
In the world of philanthropy, the Great Recession of 2008 seems like a distant memory, and overall giving to the non-profit sector has reached a new high, according to the latest annual report on the state of charitable giving in the US, released today by The Giving Institute.
In 2014, over $358.38 billion in contributions went to non-profit institutions and organizations, up 7.1% over 2013 and harkening back to pre-recession levels. All four sources that comprise total giving — Individuals (72%), Corporations (5%), Foundations (15%) and Bequests (8%) — upped their 2014 donations to America’s one-million-plus charities.
While the absolute dollars in giving have reached new heights, it’s notable that the proportion of dollars received by each of the ten categories measured has remained fairly consistent over time. Religious organizations received 32% of all contributions, while Education received about 15%, Healthcare, 8%, and Arts and Culture, 5% – about the same levels as in previous years.
This is the fifth consecutive year of growth for the sector – attributable to a strengthening economy, bullish stock market, and higher corporate profits– a trend that shows no signs of slowing.
With giving back to pre-recession levels, individuals still represent the lion’s share of contributors, notes GG+A Chairman Martin Grenzebach.
Combined with the rise in bequests and donations to family foundations, there were also more individual mega-gifts–those over $200 million—made last year, representing about $4.8 billion of the $258.51 billion in individual giving.
Higher education received more than 50% of those very large contributions, Grenzebach observes. “We saw large gifts prior to the recession, but then those dropped off dramatically in 2009 through 2012. Over the last several years, there’s been a recovery.” And those gifts are being made more frequently. Rather than a “once in a decade event, now it’s once every one or two years.”
While mega-gifts represented less than 2% of all individual giving last year – and several news-making ones from a younger cohort of donors in the tech industry – the trend presents big opportunities, especially for higher education and independent schools–and bigger challenges for development and advancement leaders.
“These gifts are extraordinarily challenging to manage,” Grenzebach notes. “The organization must develop an ongoing relationship with these major donors, so stewardship becomes very important. These are not no-strings-attached gifts. The donor becomes a partner with the institution.
“The bigger the gift, the more the donor wants to invest in something distinctive, unique, and transformational. If boards want to raise money effectively, then their focus must be on leadership that can develop a transformational agenda and program and have faculty and team support, and then communicate that effectively.”
That’s true for every organization’s leadership, whatever their focus or mission, he adds.
What do these trends mean for development professionals and programs? Grenzebach shares a few observations:
+ Campaign performance is robust.
+ The Giving Pledge as a philosophy is more and more widespread, even though it began as a commitment only of the very wealthy.
+ Survey data on high-net-worth individuals and what they indicate they’ll be doing with their money is quite bullish.
+ The performance of the stock market is strong, which reliably correlates to philanthropic behavior.
Tune in to our other webcasts on the Giving USA 2015 report: