Current Trends in Giving: Who is Giving and How They Are Giving?

Donor Demographics

Philanthropic giving in the United States remains robust, with diverse demographics contributing to charitable causes. The 2024 Giving USA Report indicates that individual donors continue to be the largest source of charitable giving, accounting for a significant portion of total donations (Giving USA, 2024). Notably, high-net-worth individuals and families are major contributors, often through vehicles like Donor Advised Funds (DAFs) and private foundations. Additionally, there is an increasing participation of younger generations and a more prominent role of women in philanthropy (Giving USA, 2024).

1. Individuals:

Individual donors continue to be the largest source of charitable giving in the United States. According to the Giving USA 2024 report, individuals contributed approximately 67% of the total giving in 2023. This indicates a slight decline in the proportion of individual contributions compared to previous years, but individuals remain the primary source of charitable donations (Giving USA, 2024).

2. Foundations:

Foundation giving has shown steady growth, accounting for about 21% of the total charitable contributions in 2023. Foundations play a critical role in supporting various causes through strategic and often large-scale philanthropy, highlighting their importance in the overall charitable landscape (Giving USA, 2024).

3. Corporations:

Corporate giving represented around 4% of the total contributions in 2023. Corporations increasingly align their giving with their business interests and community needs, focusing on corporate social responsibility (CSR) initiatives. This trend continues to show the importance of corporate philanthropy in addressing social issues while enhancing corporate reputation and stakeholder engagement (Giving USA, 2024).

4. Bequests:

Bequest giving, or donations made through wills, accounted for about 8% of the total giving in 2023. This highlights the importance of planned giving as a stable source of funding for many charitable organizations. Bequests ensure long-term support and can be crucial for the sustainability of non-profits (Giving USA, 2024).

How are They Giving?

Donors are leveraging various methods to support their preferred causes. Traditional means such as direct mail and check-writing persist, especially among older generations. However, there is a marked shift towards digital platforms. Online giving, crowdfunding, and the use of social media campaigns are on the rise, particularly among younger donors. Digital platforms offer convenience, transparency, and the ability to connect with global causes, making them appealing to tech-savvy contributors (Dorothy A. Johnson Center for Philanthropy, 2024).

• Online Donations: Online giving has been growing rapidly, especially among younger donors, driven by technological advancements and the convenience it offers. The COVID-19 pandemic accelerated this trend, with more donors using digital platforms (i.e. GoFundMe, Facebook Fundraisers, and dedicated charity websites) to make their contributions.

• Recurring Donations: Many donors prefer setting up recurring donations, providing a steady stream of income for nonprofits and allowing donors to spread their contributions over time.

• Crowdfunding: Crowdfunding platforms have democratized philanthropy, enabling individuals to contribute to specific projects or causes directly. This method is particularly popular for urgent or personal causes. This form of giving is gaining traction for specific projects or causes, allowing donors to see direct impacts.

• Donor-Advised Funds (DAFs): Offering a flexible and tax-efficient way for donors to manage their charitable giving. DAFs have become increasingly popular, allowing donors to make a charitable contribution, receive an immediate tax deduction, and then recommend grants from the fund over time (National Philanthropic Trust, 2021).

Generational Preferences in Giving

Younger Generations (Millennials and Gen Z - people born from 1980 to 2012)

Younger generations, including Millennials and Gen Z, display different philanthropic priorities and methods. They prefer causes related to social justice, environmental sustainability, and community development. Their giving is often spontaneous and influenced by social media trends. Younger donors are more likely to participate in crowdfunding campaigns and use mobile apps for donations. They value transparency and want to see the direct impact of their contributions. Millennials and Generation Z are digital natives who prefer online and mobile giving options. They are comfortable using social media and crowdfunding platforms to support causes they care about. Younger donors are more cause-driven and less loyal to specific organizations. They prioritize issues such as social justice, climate change, and racial equity. They seek more engagement and transparency from the organizations they support, wanting to see the impact of their contributions.  (Dorothy A. Johnson Center for Philanthropy, 2024; Giving USA, 2024).

• Priorities: Focused on social justice, environmental issues, and equality. They prefer causes that align with their values and want to see tangible results.

• Methods: Favor online and mobile giving platforms, social media campaigns, and peer-to-peer fundraising. They are also more likely (than their older counterparts) to engage in crowdfunding.

• Engagement: Value transparency and want to be involved in the impact of their donations, often seeking volunteer opportunities in addition to monetary contributions.

Older Generations (Baby Boomers and Gen X - people born from 1945 - 1979)

Older generations, including Baby Boomers and the Silent Generation, tend to prefer more traditional forms of giving. They are likely to support established institutions such as religious organizations, educational institutions, and healthcare facilities. Their giving is often driven by a sense of duty and long-term commitment to specific causes (Never, Christensen, & Bushouse, 2020). Older generations, such as Baby Boomers and the Silent Generation, tend to prefer traditional methods of giving, such as writing checks or attending fundraising events. They are often more loyal to specific institutions and organizations, providing consistent support over many years. Older donors are more likely to engage in planned giving, including bequests and charitable remainder trusts.

• Priorities: More likely to support traditional institutions like religious organizations, educational institutions, and healthcare.

• Methods: Prefer direct mail appeals, in-person events, and legacy giving through bequests and endowments.

• Engagement: Appreciate regular updates and reports from organizations, valuing long-term relationships with charities.

Promising Practices for Sustainable Stewardship of Giving

1. Transparency and Accountability: Providing clear and detailed reports on how donations are used builds trust and encourages continued support. Nonprofits should prioritize transparency and accountability, providing clear and regular updates on the impact of donations. This builds trust and encourages continued support (Charity Navigator, 2021).

Regular financial reports, impact assessments, and third-party evaluations can help achieve this. Transparency is especially important as donors increasingly demand to see the direct results of their contributions.

Example: Charity: Water provides detailed reports on the projects funded by donations, including photos, GPS coordinates, and stories from the beneficiaries. This level of transparency has helped build a loyal donor base (Charity: Water, 2021).

1. Donor Engagement: Regularly updating donors on the impact of their contributions and involving them in organizational activities fosters a sense of community and loyalty. Regular communication with donors through newsletters, social media, and personalized messages helps keep them engaged and informed about the organization's work. Effective communication highlights the impact of donations and keeps donors informed about ongoing and upcoming initiatives.

Example: The American Red Cross uses various communication channels, including email newsletters, social media, and direct mail, to update donors on how their contributions are being used and to share stories of impact (American Red Cross, 2021).

1. Personalization: Tailoring communication and engagement strategies to individual donor preferences and histories can enhance their giving experience.

2. Leveraging Technology: Using data analytics to understand donor behavior and preferences helps in creating targeted campaigns and improving donor retention.

3. Building Long-term Relationships: Focusing on stewardship and cultivating relationships rather than just soliciting donations can lead to sustained giving and larger contributions over time. Fostering strong relationships with donors by understanding their interests and involving them in the organization's mission can lead to sustained support. Building strong, lasting relationships with donors is essential for sustained support. This involves understanding their interests, values, and motivations and tailoring engagement efforts accordingly. Donor recognition programs, personalized thank-you notes, and opportunities for direct involvement in the organization's activities can strengthen these relationships.

Example: DonorPerfect emphasizes the importance of relationship-building in donor retention, suggesting practices like personalized communications, donor recognition events, and feedback mechanisms to involve donors in the organization's journey (DonorPerfect, 2021).

1. Promoting Recurring Donations: Encouraging donors to set up automatic monthly contributions provides a steady and predictable income stream for organizations.

2. Education and Advocacy: Educating donors about the causes they support and the impact of their contributions can deepen their commitment and encourage them to give more.

3. Diverse Fundraising Strategies: Combining traditional fundraising methods with modern approaches like online giving, social media campaigns, and crowdfunding can reach a broader audience and enhance fundraising efforts. Relying on a diverse mix of funding sources, including individual donations, grants, corporate sponsorships, and earned income, can create financial stability and reduce dependency on any single source. Diversification allows nonprofits to weather economic fluctuations and changes in donor behavior.

Example: The Girl Scouts of the USA diversify their funding through cookie sales (earned income), individual donations, corporate partnerships, and grants. This approach helps ensure financial resilience and sustainability (Girl Scouts of the USA, 2021).

1. Leveraging Technology: Utilizing technology for fundraising, donor management, and communication can enhance efficiency and reach a broader audience. Online donation platforms, CRM systems, and social media tools enable nonprofits to streamline their operations and engage with a wider audience. Technology also allows for more personalized and targeted communication strategies.

Example: Blackbaud provides comprehensive software solutions for nonprofits, including fundraising, donor management, and analytics tools, helping organizations leverage technology to optimize their operations and donor engagement (Blackbaud, 2021).

Conclusion

Philanthropic giving in the United States is evolving, with diverse donor demographics and preferences shaping the landscape. Sustainable giving practices that emphasize relationship building, leveraging technology, and ensuring transparency can enhance donor engagement and retention. Understanding generational differences in giving priorities and methods is essential for organizations to effectively reach and resonate with their supporters.

By implementing these practices, nonprofits can foster a sustainable approach to stewardship, ensuring long-term support and impact.

American Red Cross. (2021). Donor engagement strategies. Retrieved from https://www.redcross.org/donor-engagement

Blackbaud. (2021). Nonprofit technology solutions. Retrieved from https://www.blackbaud.com/nonprofit-resources/nonprofit-technology

Charity Navigator. (2021). The importance of transparency and accountability. Retrieved from https://www.charitynavigator.org/

Charity: Water. (2021). Transparency. Retrieved from https://www.charitywater.org/transparency

DonorPerfect. (2021). Building donor relationships. Retrieved from https://www.donorperfect.com/nonprofit-resources/blog/building-donor-relationships/

Dorothy A. Johnson Center for Philanthropy. (2024). 11 Trends in Philanthropy for 2024. Grand Valley State University.

Girl Scouts of the USA. (2021). Financial sustainability through diversification. Retrieved from https://www.girlscouts.org/financial-sustainability

Giving USA. (2022). The Annual Report on Philanthropy for the Year 2021. Giving USA Foundation.

Giving USA. (2024). The Annual Report on Philanthropy for the Year 2024.

National Philanthropic Trust. (2021). 2021 Donor-Advised Fund Report. Retrieved from https://www.nptrust.org/reports/daf-report/

Never, B., Christensen, R. K., & Bushouse, B. K. (2020).Philanthropy as Commons. University of Missouri-Kansas City, Brigham Young University, University of Massachusetts Amherst.