With winter storms hitting the East Coast and cold snaps across the country, all eyes have been glued to the weather forecasts...
How about the charitable giving forecast?
Today on the blog, we have compiled some of the most important stats and predictions out there regarding charitable giving in 2018. See which donor sources are growing fastest, the meteoric rise of "donor-advised funds" - and how passage of the new tax bill will affect giving in 2018.
We hope the information is useful as you begin strategizing for budgeting, programming and development in the year ahead.
Let's take a closer look at a few key takeaways from the report.
The New Tax Bill Snarls Up Predictions
More proof that engaging individual donors through fundraising events and giving campaigns works: More than 7 in 10 dollars given to charity last year came from individuals and households.
However, while reaching out to individuals continues to be a prioritiy, passage of the new tax reform legislation is snarling up previous predictions for 2018. Here's what we mean.
As reported by The Washington Post, above-average growth in personal income and net worth would normally lead to increases in charitable giving... but the new tax bill doubles the standard deduction for households. This means the standard deduction for married couples, for example ($12,700), will roughly double (to $24,000). It would only make sense for families that can give above this high threshhold to itemize. And historically, itemizers are almost twice as likely to donate to charity - and comprise more than 80 percent of total giving.
The result: Analysts are predicting downturns in charitable giving to the tune of $13 billion next year. This is something nonprofits need to be aware of sooner rather than later.
One bright spot: While the incentive to give is being lowered for middle class families, the new tax bill also means more money is staying in the pockets of the average family. As the economy improves and GDP rises, this likely means people will set aside more money for travel.
Why not tap into growing donor travel budgets by offering exciting, bucket-list travel packages in your next charity auction?
Importance of Donor-Centric Fundraising
The study reinforces a fundamental principle of development: Nonprofits need to prioritize the donor experience and communicate authentically with supporters.
In an age of increased transparency, viral social media and backlash against misused funds, it's more important than ever to show donors where gifts are going, what measures are being funded. Having supporters that consider themselves partners in your work is the foundation of a sustainable, hopefully lifelong relationship.
One practical strategy: Establish a mobile-friendly donation page. A 2016 study estimated that online giving increased 80 percent between 2013 and 2015 - yet more than 80 percent of fundraising webpages have not been optimized for viewing on mobile devices.
We already know donors are on their phones and prefer to give online. Why not create methods of giving that address both parties' needs?
As noted in the infographic, donor-advised funds (DAFs) have rapidly gained popularity over the last few years. DAFs are funds that donors can contribute to (in cash, securities, and other assets) and take immediate tax deductions. The money is then invested and distributed to 501(c)(3) charities as grants over time. The largest DAFs are run by the charitable arms of investment companies like Fidelity, Schwab and Vanguard.
While donors do not have ultimate control over the funds, they can make suggestions (hence the name, "donor-advised"). If you've never been the recipient of a DAF grant, be sure to encourage donors to recommend your charity.
For more on the 2018 charitable giving forecast, click here for the full report.
Webinar registration now open
Finally, jumpstart 2018 fundraising with a groundbreaking webinar all about improving the event production at your next auction.
The Sound of Event Fundraising
Wednesday, January 17th • 10am PT / 1pm ET
Can't make it? Register anyway and we'll send you a recording of the webinar shortly after it's over!