2019 Philanthropy Trends to Watch
What trends and themes will emerge in the philanthropic sector in 2019? Here are three predictions:
Giving will increase… and people will ask if that is a good thing?
Total charitable giving in the US has increased since the Great Recession. We surpassed pre-recession giving levels in 2014 and have been on an upward trajectory for total charitable dollars donated each year since. In 2017, Americans gave more than $410 billion, 70 percent of which was donated by individuals. At the same time, however, the share of American households that are donating is decreasing. According to one study, more than two-thirds of Americans donated to charity in 2000, but in 2014 that number was down to 55.5 percent. This means that Americans who make donations are giving more. A shrinking donor pool raises a lot of questions, such as:
Will charitable giving in the US start to reflect the values of the high net worth more than the average American?
How will charities have to adapt to appeal to a shifting donor base?
Will the new tax laws exacerbate this trend?
I expect to see these questions asked (although possibly not answered in full yet) in the coming year.
Impact investments will gain traction.
Impact investing is not new, but it is gaining popularity. One third of family offices now report engaging in impact investments. The largest donor-advised fund charitable sponsors also offer impact investments as a way for donors to maximize their charitable impact.
Impact investing gives people the chance to advance their financial and philanthropic goals by investing in projects or companies that generate a positive social return in addition to a financial one. Investors can accrue gains on a socially beneficial investment, which can then be re-invested and/or granted. Millennials are particularly engaged in impact investing. A recent study found 77 percent of affluent millennials include impact investments in their portfolio.
The increased adoption of charitable giving vehicles, like donor-advised funds, in recent years is a signal that philanthropists want to stay close to their charitable dollars. It is safe to assume that they may also want to align their values with their charitable investments. This is especially true as Millennials come into higher income earning years.
Grantmaking from donor-advised funds will surpass $20B
NPT produces the annual Donor-Advised Fund Report, which analyzes data and trends from donor-advised fund charitable sponsors. In this year’s report, we predicted that 2018 would be the year grants from donor-advised funds surpass the $20 billion mark.
Growth in grants from donor-advised funds to qualified charities has outpaced contributions to donor-advised funds four out of the last five year. We expect to see more of the same. If NPT’s individual experience is any indicator, we can expect to see that trend continue: in 2018 we made 28% more grants (by volume) worth 12% more (by dollars) than in 2017.
Visit our Charitable Giving Statistics page to explore recent data on philanthropy, donor-advised funds, and more.