Philanthropy is dying.
It’s unfortunate, but it’s the truth. And while not many seem to want to talk about this sense of impending doom in fundraising, the numbers undeniably support it. In 2001, 65 percent of households gave to charity. By 2015, this had dropped to 56 percent. From the The Chronicle of Philanthropy:
“The share of Americans who donate to charity is falling, and 49% of contributions come from 1 percent of households. From 2000-2014, giving declined across every age group and every income and education level. Perhaps most frightening: The share of giving dropped most among 51 to 60- year olds, who are often bedrock donors.”
And it goes deeper. Giving to religious institutions accounts for more than 30 percent of all giving, and givers who call themselves religious tend to be among the most generous to all institutions, religious or not. But religious affiliation is way down in America (per the 2015 Pew report), and along with it religious giving. The share of Americans giving to religious causes has declined more than 10 percent in just the last few years.
When you look towards future generations of donors, the picture does not look any better. Our younger generations give and relate to causes differently - they might install solar panels instead of giving to the Sierra Club. Or they might fund a friend directly in an online, crowd-sourced campaign. They definitely prefer startups to establishment behemoths, and they are eager to try different things, so their loyalties shift more frequently. While this is all characteristic of Millennials, this way of thinking has proven attractive and contagious to GenXers and Baby Boomers as well.
Even the wealthiest Americans are giving a relatively insignificant amount when compared to their overall net worth. On his website "Inside Philanthropy," David Callahan, author of “The Givers,” writes:
"Yes, affluent Americans have been giving more. But they've also been earning more, and it's far from clear that their giving has kept up with their new wealth accumulation. The top 1 percent has assets of $30 trillion, about a third of all household wealth. But these Americans gave away less than a half of 1 percent of their total wealth in 2016.”
Not only are new gifts dropping across the board, but second “repeat” gifts are down even further, and charitable organizations have no idea how to turn things around. Because the turnover of fundraising professionals is so high, organizations want to get the most our of their development folks as quickly as possible. This extremely short-sighted policy means that fundraisers are pushed to focus mostly on major gifts, which just contributes to the problem. It seems that every organization wants a development person to solve all their problems – and they want it now. When that fundraiser comes to an organization, the pressure is on to bring in big money immediately. Sadly, for most non-profits, the idea of laying the groundwork for the future just isn’t there.
In addition, the sheer number of non-profits is increasing, when it seems pretty clear that many, if not most, should be merging and consolidating. The cost to keep an organization running (and pay a development person the hefty salary required to find a good one) is increasing, and the boards of those organizations rarely want to “put themselves out of business” by merging with one or more other organizations. The Board reticence to “wake up and smell the coffee” is a real problem, and so charity after charity does what they’ve always done – keep the status quo, ignore the disturbing trends, ask the “big guys” to increase their donation a bit more, and kick the can down the road.
I say let’s expose these reticent, moribund organizations for what they are - and celebrate the ones that are taking the risk to change for the better.
Up next, I’m introducing you to some unpleasant characters and exposing the hypocrisy of the organizations who accept their donations.