Maximize End of Year Giving
End of Year Donations: How to Stay Upbeat When Charitable Giving is Down
‘Tis the season for charitable giving — at least, it used to be. Reports show that end-of-year donations from individuals dropped 1.1% in 2018, and non-profit organizations fear this trend might continue in 2019.
For organizations that rely on donations, a drop in charitable giving could pose disastrous financial consequences. Even though donations from companies and foundations rose 0.1% and brought an overall increase in giving to $428 billion, it doesn’t negate the fact that nearly $54 billion in donations were lost.
Why Are End of Year Donations Down?
When the new tax reform emerged, the standard household deduction doubled from $12,000 to $24,000 for married couples. Many nonprofits are citing this reform as being detrimental to charitable giving. In 2016, nearly 45 million households itemized their deductions, but in 2018, that number was expected to drop to between 16 million and 20 million — more than half as many households who are no longer eligible to itemize.
It’s suggested that because many Americans can no longer capitalize on the charitable giving deduction, they stopped donating altogether. Additionally, for those that do still donate, they might not be giving as much. In addition, end-of-year volatility in the stock market may also be a culprit. In December of last year, the S&P fell 9.18%, its worst performance since February 2009. Even in a strong economy, charitable giving can still take a hit.
How Nonprofits Can Mitigate the Effects
Interestingly, one trend that’s catching attention is that while the number of donors is down, the amount these donors are giving is up. Charitable organizations are becoming increasingly dependent on a small number of donors (particularly corporations and the very wealthy) instead of a mass audience, and nonprofit fundraising strategies should adjust their outreach to cater to these individuals.
Though this shift may cause complications for some organizations, there’s still plenty to be hopeful about. Narrowing your donor focus may help you to reduce internal costs associated with marketing and outreach. You should also re-evaluate your budget to help to offset a drop in donations. Charitable giving is expected to drop by roughly $21 billion each year, and nonprofits should start as soon as possible to mitigate the effects.
Want to maximize your appeal? NMBL Strategies has worked with nonprofits for years, helping in some of the greatest nonprofit developments of the previous 20+ years. In that time, we’ve raised more than $100 million, developed millions of dollars more in earned income, and most importantly, developed the strategies and insights behind these efforts. Let us bring that experience to your nonprofit today and ensure your financial future is in good hands.
