Fundraising is Making a Comeback!

By David King, President & CEO

With the release of Giving USA we get confirmation the philanthropic recovery from the recent recession is continuing, and outpacing the overall economic recovery.

The figures released today show giving increased 3.5 percent in 2012 over 2011, just slightly ahead of the inflation rate, but far ahead of the reports we see on the overall economy.

However, if you look closer at the numbers there is more to the story. Each year the total giving calculation of Giving USA includes the amount given by bequest – that is gifts from dead donors. This is the most volatile area of giving sources reported by Giving USA, and also the least predictable.

And, if we are acting within the bounds of the law – and morals – the area fundraisers have the least influence over, in a year-to-year sense. If you pull out the gifts of the deceased, you get a much brighter picture of the giving decisions made by Americans in this recovery period.

If bequest giving is removed from the picture, you find giving from the living (I know it rhymes and I’ve already trademarked it) increased by almost 8.5 percent since 2010.  An average rate of growth of over 4.2 percent per year, while not earth shattering by any stretch –  and not even quite up to our historic average growth rate of 6.7 percent – is still impressive.  In the current “new normal,” we’d be very happy if the total economy grew at a rate of 4.2 percent per year. What this indicates to me is American giving is recovering faster than the overall economy.

We can’t control when people die and, to me, including bequest numbers in the statistics is a valid way to measure and report the amount of money coming into the nonprofit sector. However, it’s not a great indicator of people  “feeling better”  about making charitable gifts – given bequests are usually put into place years before the donor’s death. They are not decisions typically made in the conditions of today.

Additionally, while some organizations and fundraisers work hard to encourage donors to make charitable gifts as part of their estate planning, there is little we can do (again within the bounds of law) to influence when we receive those gifts. An organization can’t redouble their efforts and “make” more bequests come in when they have a down fundraising year.

So, when we peel back the layers, we see today is a day to celebrate. Celebrate the resilience of American generosity. And, a day to pray. Pray our politicians don’t dismantle the system that encourages philanthropy.

Tomorrow is a day to get back to work, and keep that trend line moving up.