We are just a few weeks into 2019. For most organizations, the books have not fully closed on 2018 and thus it’s hard to fully gauge where giving landed last year. But it’s not too soon to make some predictions about where giving is going in 2019.
1. First, a little good news: Asset giving continues to remain an opportunity going forward. Gifts of business interests and gifts of real estate remain two of the top asset-based gifts. It remains a multi-trillion dollar opportunity.
Moreover, these gifts of assets are demographic-driven—the aging population, Boomers selling businesses and a desire by investors to put cash to work—outside the stock market. The wise charity will continue to look to increase their acumen and partnership with groups who can help them land these kinds of gifts.
2. Tempered by some reality: Gifts of publicly traded stock gifts were down in 2018. Unfortunately, the stock market declines in the fourth quarter drove down gifts of publicly traded stock. As we look forward to 2019, volatility in the stock market and uncertainty over the economy will continue to make donors slower to give.
Fears over trade wars and the political divide are not problems that will be solved quickly. Accordingly, donors are likely to sit on some of their potential donations while they adopt a wait and see approach.
3. Direct impact giving. We are in a “GoFundMe” era. This means that more and more donors are looking for direct impact. They want to make a difference in the lives of individuals. They want to see and feel the difference they are making. The growing distrust of institutions will further drive this desire. This desire for direct impact will, in many cases, be without regard for tax deduction—particularly when you read the next point.
More and more donors are looking for direct impact. They want to make a difference in the lives of individuals. They want to see and feel the difference they are making.
4. Giving Motivations are Tested. While the 2017 Tax and Jobs Cuts Act implemented significant increases in the standard deduction—$24,000 for married couples—the impact of that deduction won’t fully be realized until people begin filing their tax returns in 2019. Some people will be disappointed to learn that they will not be able to itemize their charitable giving. Indeed, the Non-Profit Times reported that the number of itemizers will drop by 56.7%.
Thus, as people begin to look at their giving for the remainder of 2019, some, for the first time, will have to determine if their giving is for tax benefit or for true social good. (Read here for commentary on the tax law.)
5. The Power of Influence. The information age has made us more distracted than ever. Your phone. It pops up emails, text messages, Instagram photos, news, schedules, and even donation appeals. There are more non-profits than ever asking for money in more ways than ever before. It leaves people asking, “Who can you trust?”
The most trusted influencer is a peer, a friend—even if that friend is online. More than ever, an increasing key will be to turn your donors from systematic givers to willing advocates to help reduce the noise and prompt more giving.
An increasing key will be to turn your donors from systematic givers to willing advocates.
6. Funding Models not just Organizations. It used to be that if donors liked an organization, they might fund it for 30 years. For instance, they might support the local rescue mission, or the missionary working on a Bible translation. That’s changing. Deeper questions are being asked. For instance, does the organization have a replicable model that can be used by others? And can that model change an entire sector of society, provide justice, alleviate poverty, etc.? More donors will be looking to fund long-term change versus the status quo.
7. The Necessity for Data and Testing. Underlying all of these issues is a fundamental need for data and testing. We need real-time data to determine if our message hit home and to be able to adjust on the fly. Similarly, we need data to determine if our programs and models are producing the desired results. Anecdotes of past success won’t be enough to justify the next gift. Accordingly, integrated platforms that connect donor experience with ministry reality are essential and sadly still in need of development.
OK, there you have it, my seven keys to the direction of giving in 2019. But let’s face it. It’s a big, complex world. And some of you will likely have your own views. I’d like to hear them as well.
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Published January 18, 2019
Topics: Nonprofit Development