Giving Did Not Keep Up With Inflation in 2018, Study Says

Giving in 2018 rose slightly in the year’s final quarter, but only because of a small increase in contributions of $1,000 or more, according to a new study.

Nearly all other measures — gifts smaller than $1,000, new donors, and donor retention — declined last year, which could indicate rough seas ahead in 2019.

Among the findings:

• Giving over all rose 1.6 percent in 2018, which did not keep pace with the rate of inflation and was lower than the 2 percent increase seen in 2017.
• Contributions of $1,000 and up grew by 2.6 percent. But donations of $250 to $999 fell by 4 percent, and gifts under $250 fell by 4.4 percent.
• New gifts dropped by 7 percent, and second gifts to an organization, a sign of donor retention, fell by nearly 15 percent.

The data comes from the Fundraising Effectiveness Project’s fourth quarter report, which tracks giving from more than 4,500 charities. The project is a collaboration of the Association of Fundraising Professionals and the Urban Institute.

Big Gifts and Other Trends

The boost in donations of at least $1,000 might indicate the impact of the new federal tax code, which lowered tax rates but doubled the standard deduction, making middle-income taxpayers less likely to benefit from itemized charitable deductions.

In a statement, Jay Love, co-founder of Bloomerang, one of the companies that provided data for the Growth in Giving Database the study draws on, pointed out that more than a third of donors who gave $1,000 or more in 2018’s final quarter were new to that category.

“That’s a lot of new donors giving significantly more, which tells me that some of those donors were likely giving larger sums to itemize those deductions,” Love said.

“Smaller gifts also fell, which tells me that those donors couldn’t take advantage of the charitable deduction anymore.”

The decline in new donors and in donor retention is particularly concerning, said Elizabeth Boris, chair of the Growth in Giving Initiative, in a statement. “Smaller and midlevel donors are slowly but surely disappearing — across the board among all organizations. Philanthropy should not and cannot be just the domain of the wealthy, and the entire sector needs to look at how we reach out to an engage these donors.”