Meeting the Needs of Nonprofits, An Outlook for 2017 - 2018

Meeting the Needs of Nonprofits, An Outlook for 2017 - 2018

Business People Standing on a Pie Chart Nonprofit organizations worldwide depend on Philanthropic activity. Donor revenue to charities translates to about 2 TRILLION annually or 5.4% of the U.S. GDP, according to The Chronicle of Philanthropy. 

The Urban Institute reports that staff and wages in the nonprofit sector experienced more growth than the public sector within the last ten years, however, charities report that societal demands are greater than the support that they receive. 

This month the Indiana University Lilly Family School of Philanthropy published The Philanthropy Outlook 2017 & 2018. The following are statistics and trends noted that may shape the future of both philanthropic and nonprofit activity.

  • Three subsectors have gained donor momentum in recent years and are expected to continue: higher and private education, health research to treat specific diseases, and civic and human rights efforts. 
  • Increased contributions are expected from all sources of giving, particularly from foundations and from individuals, in 2017 and 2018.
  • Giving to health related causes will increase the most, exceeding 40-year trends, while public benefit giving will exceed 25-year trends, and education giving will surpass 10-year trends. 
  • Giving by American individuals/households is predicted to increase by 3.0% in 2017 and by 3.2% in 2018. 
  • Giving by foundations is predicted to increase by 5.9% in 2017 and by 6.0% in 2018.
  • Giving by estates is predicted to increase by 5.4% in 2017 and by 5.2% in 2018.
  • Giving by corporations is predicted to increase by 2.4% in 2017 and by 2.7% in 2018.
  • Individuals comprise the largest source of funding for charities, followed by foundations, then estates, then corporations. Percentages of giving is predicted by the previous four sources:

Percentage of Giving by Source

  • Online giving, especially using a smartphone, increased by 80%, however, 80% of donors have not used this technology to donate. 
  • 80% of nonprofit organizations' websites are not optimized for smartphones. 
  • Social media promotes trending causes, high profile donors, and campaigns such as #Tuesdaygiving and "Pay it Forward". 
  • It is recommended to update and optimize nonprofit digital assets to keep up with technology and social media. 
  • A 2016 Pew Research Center survey found that 22% of Americans have contributed to a crowdfunding campaign on such sites as GoFundMe, Kickstarter, or YouCaring. Most give to individuals in need, and schools. 
  • Those who give via crowdfunding say they feel more connected to those they support. They often know exactly who they donate to and get updates on the progress and results of the campaign.
  • Uncertainty in the future regulation of nonprofit organizations created a surge in donations for human and civil rights, environment, and minority groups after the Presidential election.

The previous data offers indications of future spending by donors to charities.  The total giving rate will continue to grow above the 5 year average, but will be below the 10+ year average, in the next couple of years. The recession going into 2007-09 drove those averages down, so as long as our country continues economic growth, donor spending should continue to grow. However, if new policies create uncertainty or curb economic growth, these trends could change quickly.   

 

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