Wow! Americans are Really Generous!

Currently the economic outlook is improving almost daily. Consumer confidence is the highest it’s been in 18 years. The markets are setting new records daily. In fact, on November 7, 2016 (the day before the election) the Dow was a little over 18,000, and at the time of this writing it was 24,700. Also, at 3.8% unemployment is now at an all time low, and the GDP is expected to exceed 4.0 %.

Economic Prosperity Influences Giving

The economy is growing and that is good news for churches and nonprofit organizations. Not surprisingly giving has also reached an all time high. Each year around this time the study, Giving USA has been published and the news is usually very good, especially for those in the fundraising community. This year is no different as clearly we are experiencing a time of economic prosperity and giving in America shows it.

Consider that for the first time giving has exceeded $410 billion. The breakdown is even more interesting:

  • Giving by Individuals……70% of the total or $286.65 billion
  • Giving by Foundations…16% of the total or $66.90 billion
  • Giving by Bequest…………9% of the total or $35.70 billion
  • Giving by Corporations…5% of the total or $20.77 billion

Individuals Lead the Way

What I find interesting is a further analysis of those numbers. Consider that while “Bequest Giving” is a separate category on this report, individuals are actually the ones who make bequests. Also there are some 300,000 donor advised funds in the US (many through community foundations) and combined with family foundation giving it accounts for nearly 50% of foundation giving. Again, most of these giving decisions are also made by individuals.

That means that in reality, some 85-87% of all giving comes from individuals. That’s important for nonprofits in particular to understand. As fundraising consultants, too often we find organizations put an over-emphasis on grant writing and an under-emphasis on the cultivation and solicitation of individuals. It doesn’t mean that grant writing is unimportant, but it’s no way to build a sustainable development program.

Faith Prompts Generosity

Also, while every category of giving increased, the largest giving categories were as follows:

  • Religion…31% of the total or $127.37 billion
  • Education…14% of the total or $58.90 billion
  • Human services…12% of the total or $50.06 billion
  • Giving to foundations…11% or $45.89 billion
  • Health…9% or 38.27 billion

Of course, what is not calculated here is giving to educational, human service or health care institutions for religious purposes. The point is that many people who give are motivated by a benevolence that comes from their faith. In fact, about 75 percent of people who frequently attend religious services gave to congregations, and 60 percent gave to religious charities or nonreligious ones. By contrast, among those who do not identify a religious creed, only 56 percent make charitable gifts.

Lessons Learned

So what can we learn from all of this? Several things:

  • First, Americans are quite generous. In fact, they are by far the most philanthropic of any nation.
  • Second, faith-based people tend to give more than non-faith based ones. Therefore, despite what others may contend, research shows that faith is still an important component in giving.
  • Third, giving by individuals accounts for at least 85% of the total. Therefore, building individual giving programs should be a top priority for nonprofit organizations.
  • Fourth, do some strategic planning on ways to get to know and build a relationship with the CEO of your Community Foundation.  They are the gatekeeper for donor advised funds.
  • Finally, while Americans are quite generous, you won’t get your philanthropic share of their benevolence unless you establish organizational or ministry excellence, build relational capital and then ask people to help advance your mission.

If you would like more information on the Giving USA data and how to apply it to your own organization, join us for an upcoming session led by The Covenant Group at the Center for Nonprofit Excellence. Watch our website for updates.