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2017 Trends in Philanthropy – Has Charitable Giving Changed in 2017?

2017 has been an interesting year. It’s been a tough year for nonprofit organizations: Natural disasters, shifting political fluctuations, and a global economy that appears to be flirting dangerously close to a recession. All these factors, and more, have influenced donations in 2017 and seem set to affect the world of philanthropy for the next few years.

Who Benefited from Donations in 2017

There are nine major categories of recipients around the world; religion, human services, education, healthcare, arts and culture, environmental, public-society, international affairs, and giving to foundations. 2017 has seen growth across ALL sectors making it only the sixth time in over 40 years that donations have been ‘up’ across all sectors. Despite a certain amount of ‘belt-tightening’ in 2017 and uncertainty about the shifting political landscape in many countries, individual donations have seen an increase in 2017. In the United States, donations by individuals increased by 4% over 2015/16.

It is true that the political climate plays a significant role in many donors’ decisions on how to disburse their donation, it is found that it is largely economic factors that influence the overall trend of charitable giving.

The Profile of Donations in 2017

  • Individual donations grew at the highest rate in 2016 and 2017. Donations by individuals far outpaced donations by foundations and corporations.
  • Foundation donations continue to grow but at a much slower rate than previous years.
  • Bequests and donation from estates dropped significantly in 2017.
  • Corporate giving and donations showed small gains, but was influenced by weaker markets and the threat of recession

Where the Money Went in 2017

  • International affairs, public-society and the arts all saw growth in 2017. This is considered largely attributable to the increase in publicized natural disasters and the need for immediate relief in several regions of the world.
  • Sectors with the largest growth included arts and culture, the environment and healthcare
  • The sectors with the slowest growth in 2017 was education with just 3,6% growth over previous years, and religion with a 3% growth.

Millennials vs. Generation X vs. Baby Boomers – Donation Profile

Different generations have very distinct ways of donating money, as well as different trends in the types of organizations and nonprofit groups that they favor. These trends and patterns can help organizations target key audiences and invest in better ways to encourage people to donate in 2018.

One factor that is common across all three generations is the fact that more people prefer to donate money online as opposed to at fundraising events or by direct mail. 67% of millennials and 59% of Generation Xers and Baby Boomers prefer to donate money online. This means that it is imperative that nonprofits ensure that the path to donate online is seamless, secure and easy to navigate. Improving online donation paths may be the biggest trend in 2017, and it is here to stay.

  • Baby Boomers – With 19% preferring to donate via direct mail, baby boomers are also the group that is most influenced to donate by attending a fund raiser, followed by an appeal by email. Only 19% of Baby Boomers are inspired to donate to an appeal on social media.
  • Generation X – Gen Xers prefer to donate at fundraising events over direct mail and are most inclined to give following an appeal on social media (28%), fundraisers (24%), and then email (20%).
  • Millennials – This generation show the highest numbers of online giving (62%), followed by fundraising events (16%), and are the only group to have actively embraced mobile as a path to donate (9%). A millennial donor is more likely than any other generation to respond to requests on social media.

One of the biggest factors affecting donation is the personal one. Volunteering and encouraging people to actively help a nonprofit with their time and skills is the best way to ensure that donations grow. 88% of donors who volunteered at an organization also donated funds to that organization.

The Influence of Social Media on Donations in 2017

With a whopping 75% of donors noting that they stay up to date with news about their charities on social media, it’s little wonder that social networks are also a growing trend in inspiring people to donate. Facebook takes with top spot with 62% of donors inspired to give by news and appeals on Facebook, followed by Twitter (14%), Instagram (10%), YouTube (6%) and LinkedIn (3%).
Social media in 2017 is about connecting people and sharing information. Nonprofits need to ensure that they invest more in social media outreach and in keeping the channels of information open at all times.

Trends in Philanthropy in 2017

What have we seen in 2017 that has made a difference in the way that people donate money? In Europe and the United States, uncertainty and opposition to political leaders has shown an increase in ‘oppositional donations’. There is growing mistrust at the often-vague structure of some foundations and people are preferring to donate money personally to specific organizations. If you’re a small nonprofit then look for ways to attract individual donors, and ensure donors that their money is reaching the hands of people and programs who need it most.

One of the biggest trends in philanthropy in 2017 was the increase in ‘Impact Investing’. This is a way of investing in small groups, and even individuals to ensure that society is positively impacted. The Open Society Foundation, Gates Foundation, Chan Zuckerberg Initiative and the Emerson Collective all made multimillion dollar investments around the world. The tech world is leading the way as the sector with the largest number of donors. They are also the group who has come relatively recently to philanthropy. This trend looks set to rise exponentially in years to come as the tech billionaires find their feet.

Donations by women have increased in 2017, and this sector of donors looks to be the highest growing sector in philanthropy. Look at the recent donations by Sheryl Sandberg (US) and Jamie Cooper (UK) hitting well over $100 million.

There is generally quite a pessimistic view of everything that is happening in the world right now, but trends in philanthropy show that many more people are prepared to step-up and donate to ensure that the world is better for everyone. That’s the key trend that has shown up in 2017: hope + truth = more donations from more people.

5 Predicted Trends in Philanthropy for 2016

Billionaires pledging to give away their fortunes within their lifetimes. The rise in crowd-funded charities. The use of social media, and ‘viral’ content to raise money for charities and trusts. 2015 was a year for giving back and giving big in a myriad of different ways.

 

What can we expect in 2016 from the world of philanthropy, foundations, charitable organizations and trusts?

1. The Giving Pledge will attract more billionaires than ever before. This initiative was primarily aimed at US billionaires, but in 2015 saw an increase in signees to the pledge from Eastern Europe and even Russia. In 2016, we predict that some of the more philanthropic of the great Russian oligarchs will sign the pledge and donate their wealth to charity.
2016 trends
2. The leadership structures of foundations and charitable organizations will move into the hands of younger entrepreneurs. This may also cause a shake-up in the overall structure of many organizations. The decision to form a corporation, instead of a foundation, was taken by Mark Zuckerberg and Priscilla Chan when they formed the Chan Zuckerberg Initiative after the birth of their first child. Other young leaders may start to follow suit, to ensure greater, and more direct control over the distribution of funds to those who need it most.

3. Smaller non-profit organizations and community groups will be able to harness the knowledge and resources of the larger foundations: More foundations are helping smaller groups realize their goals and sustain work at a grass roots level.

4. Charities and foundations will seek to promote their programs and create more opportunities for giving by offering better tax incentives, better structures for giving and more significant reasons for people to give big.

5. On the subject of tax – foundations and charitable organizations need to take a good look at their own financial structures in 2016. The first quarter of the year is tax season in many countries around the world, and although it has never been easier to give, it has also never been harder to stay abreast of all the tax laws and regulations governing the receipt of funds and the dispersal thereof.

2016 promises even more opportunity for foundations to raise money and attract donors. Staying ahead of the curve and on top of regulations will ensure success.