5 Ways Philanthropy Has Evolved over the Past Decade
As the pace of change in the world continues to gain momentum, the COVID-19 pandemic hurtles us forward even faster. We’ve witnessed considerable diversity in the way charities do business that has escalated quickly over the last decade but even more so over the past few years. Here, we address how the world of philanthropy has seen significant shifts in donor demographics, fundraising methods, and even the meaning of the word philanthropy.
More donors now fall into the upper class
One noticeable change is the demographic shift from middle-class to wealthy donors. In America, the amount of money donated is increasing, but the number of donors is decreasing; in other words, fewer donors are giving more. Tax incentives are one of the reasons. According to Forbes, “The marginal income tax benefit for the top 1% of earners is, on average, around 30 cents of every dollar donated, whereas it is only one to three cents for middle-income earners.” For similar reasons, donors have started giving appreciated assets instead of cash.
Millennials are donating more than Baby Boomers
In a related change, the generational demographic is shifting from Baby Boomers to Millennials (Gen Y). As more Boomers begin to retire and more Millennials — including some prominent tech entrepreneurs — settle into careers, the concentration of wealth also shifts. Although Boomers still out-spend the younger generations, Millennials have more buying power, and these generations require vastly different marketing strategies.
Traditional fundraising methods are on the way out
The traditional methods like phone calls, donor appeal letters, and email solicitation are declining. The absolute impossibility of large galas, auctions, and other events in 2020 forced nonprofits to find alternate fundraising avenues. Many turned to webinars, social media, and digital events with surprising success. Remarkably, the pandemic did not dampen the generosity of many donors, who instead chose to rise to the occasion and meet the needs of the less fortunate.
People are also turning to professional fundraisers — companies or individuals that operate, advise, and/or act as a consultant in connection with the solicitation of contributions for or on behalf of a charitable organization — to do the legwork for them.
Donors don’t just want to hear stories, they want to be a part of them
Philanthropy has always been about telling human stories, but now donors want to feel like they’re taking an active role in those stories and improving the lives of others through their generosity. In the past, a letter with a tragic story (but not too tragic!) was enough to get donors to send help. Today, donors want to see themselves as manifesting tangible change.
The fundamental meaning of philanthropy is changing
The word used to mean simply “giving money to nonprofits,” but now it has more to do with social good. People use philanthropy to define their lives and therefore donate to nonprofits that align with their closely-held principles. They’re looking for nonprofits that don’t just detail what they do but also how they do it.
Transparency and adaptability have never been more valuable in the philanthropic world. For nonprofits, survival means finding the sweet spot between a carefully worded letter and an online presence. That said, Americans donate more money than any country in the world, so there’s always hope for those in need.
