How Philanthropic Giving is Evolving

According to data from the Charities Aid Foundation World Giving Index, the United States is the third most giving country globally, with 61% of those surveyed reporting they've donated to charity in the past year. 

During the COVID-19 pandemic, American philanthropy remained resilient. Blackbaud Institute reported that overall charitable giving increased along with the amount of the donation gift during this time. It's no surprise that philanthropic giving is shown to be one of the healthiest human activities, as it helps cultivate purpose and wellness in those who give.

Of course, the face of philanthropy is constantly changing. In recent years, the trends show how money donated in America is shifting from the middle class to the wealthy and donations are coming less from income and assets. The age of donors is changing from boomers to millennials, too. All of these trends correlate and an overlapping trend indicates how wealthy, asset-holding millennials are the group of philanthropists that increase the most in the country. 

While giving is increasing in value, the number of people giving back to charities is decreasing. Fewer people are giving more money to charitable organizations, which can make sense if it depends on our tax codes and the concentration of wealth over the last decade. Over most of the past decade, equities have generated much of America's private wealth as the wealthy generally hold America's equities. It's predicted that more charitable donations will come from appreciated assets over cash. Since asset values have become more enjoyed recently, the scenario is more likely to occur. And while asset giving has traditionally been complicated, technology is helping it become much more manageable.

The Shift to Millennial Giving

Wealth and giving back are shifting to younger generations, like Millennials, who comprise the largest generational part of today's workforce. Millennials will inherit trillions from the boomer generation over the next few decades. Upper-class Millennials and high-earning millennials are expected to gain the most from wealthy parents. But how do nonprofits navigate new trends in charitable giving?

Common Financial Issues of the Wealthy 

Organizations should be able to talk about appreciated asset giving, wealth transfers or bequest and their complexities. Professional, philanthropic organizations should be able to speak about them and understand the details and nuances of these financial issues.

Donar-advised Funds

Some wealthy donors will use donor-advised funds, which have proven to become more popular, especially during the pandemic. DAFs allow charitable givers to place appreciated assets into giving funds so they're all in one place. It also allows them to invest the balance of the fund while in the account. Later, they can distribute the grants to various charities over time. Organizations should be able to support wealthy donors who are keeping their charity via DAFs.

Financial Advisor Relationships

Financial advisors, wealth managers, and philanthropic advisors all have significant foresight. It's important to respect their advice and view them as partners, not obstacles. Building relationships and trust with them will help with long-term connections and the financial success of each partnership.

Asset and Bequest Giving

While some donors may donate via donor-advised funds, others may want to give assets directly through the website. Ensure that wealthy donors have access to direct asset and bequest giving. Accessible pathways to donating will help the process run smoother for everyone.

Better User Design Experiences

On a related note, easy pathways mean better user design experiences should be present on a nonprofit organization's website. Good design and clear information in the nonprofits' emails, social media and other web assets allow for smoother and more trustworthy donating experiences, especially for Millennials. It's always important to remember that more significant gifts require more trust from the giver.

Charitable giving isn't slowing down and perhaps the wealthy Millennial generation will bring in a renaissance in charitable giving as they have higher philanthropic tendencies. As giving trends change, the nonprofit world should adapt to the change and allow everyone to give back more efficiently than ever before.