What is trending today in the world of philanthropy? What is the philanthropic context in which we work? As we anticipate important shifts in philanthropy in 2015, I thought it would be helpful to look at some key philanthropic trends and how they may impact how donors G-I-V-E.
G – Giving is expected to return to its pre-recession high watermark in 2015, which is sooner than expected. Total philanthropic giving in the United States reached $355 billion in 2013 according to Giving USA, a mere 5% away from the high that was established in 2007. We’ve recovered from the dramatic recession-era drop in giving much faster than experts expected and if current giving growth rates continue we should exceed those record giving levels in 2015. Giving data for 2014 will be released with the next Giving USA report in June, which will give confirmation that the increased giving trends are continuing.
I – Impact investing will grow as donors engage in philanthropic investing that nets both a social and financial return. This new investment trend allows investors to select socially responsible investments that not only do no harm, but also actively seek to make a positive impact on society as well as producing a financial return. Currently the purview of foundations and the very wealthy, we will see more socially-conscious investors seeking out these “double return” investments such as investing in low-income housing or clean technology. A 2014 study by Bank of America Merrill Lynch found that about half of investors seek to have their personal values reflected in their investments. Demand is particularly being driven by women and millennials, with 63% of women and 75% of millennials viewing their investment decisions as a means to express their values. Impact investing may be brought to the donor and investor masses through new web-based investing platforms that are being developed.
V – Visibility of nonprofits increasing through social media presence via online and mobile - this is called the new "attention economy." Garnering the eyes, minds, and hearts of potential donors has become increasingly tough as we continue to be deluged with messages and demands for our attention through traditional channels and the onslaught of social media. The “attention economy” treats our attention as a scarce commodity and uses economic principals to try to capture more of it. For the majority of nonprofits, that means expanding their outreach through social media tools like Facebook, which an astounding 98% of nonprofits use according to a 2014 Hubspot study. Social media juggernauts like last year’s Ice Bucket Challenge mean we will continue to see nonprofits leverage social media to capture a larger share of donor attention for their missions.
E – Emergence of Gen X in the leadership ranks of nonprofits as we see a wave of baby boomers retire in 2015. The long-predicted glut of Boomer retirements will continue in 2015, opening up new opportunities for a cadre of Gen X nonprofit leaders who have been waiting in the wings for their opportunity to take the helm. A 2008 study predicted that 50% to 75% of nonprofit leaders were anticipating leaving their positions in the next decade. Many of those departure plans were delayed by the Great Recession, but are likely to pick up speed in the next few years. Gen X-ers who have been looking for an opportunity to advance will suddenly be leading these organizations. From a generational trends standpoint, we will likely see these former latchkey kids shake things up with their entrepreneurial spirit, dislike of hierarchy, and desire to create change.
These trends reflect core issues donors examine when making philanthropic giving decisions:
- the feeling of abundance vs. scarcity;
- the impact a gift makes;
- the visibility of the nonprofit; and
- the trust in nonprofit leadership.
As you think about your fundraising and donor engagement strategies for 2015, I would suggest that you stay alert for what is trending at your organization and what impact these trends are having on donors. For example, has your donor pool returned to its pre-recession level of giving and has their giving changed since the recession? How do your donors define philanthropic impact – is it both social and financial? Are you tracking measures of visibility for your organization and are your constituents using the social media space as a preferred source of information? And, how well do your donors know the leadership at your nonprofit and what actions are you taking to deepen donor trust with leadership?
As we hope to see spring soon, I hope charitable giving is trending in a positive way at your institutions!