The Future of Giving In America
There is a lot to celebrate in Giving USA 2015, the annual report on American philanthropy, for the year 2014.
• Total philanthropic giving rose by 7.1%, to $358.38 billion!
• All but three recipient categories are estimated to be at their highest level ever. This includes giving to arts, culture and humanities, which saw the highest increase in giving among all giving categories, rising by 9.2% in 2014.
• And while modest in growth in 2014, at 3.6%, current dollar giving to the human services sector has not seen a decline since 2002.
If these numbers do correlate with broader economic indicators as many suggest then this is indeed good news for the US economy overall.
At the same time it is important to reflect on the challenges this report reflects. Most significantly, total giving as a share of GDP in 2014, which reflects the economic health of a nation, was 2.1%. And it’s been this way for 40 or 50 years, depending on where you source your information. In other words, with all the wealth created, advances in technology and new ways to give – online, mobile, Giving Tuesday, social media and the bucket challenge - giving as a proportion of total wealth has not changed since 1965!
There are many reasons why charitable giving will not likely move beyond 2% any time soon, five of which are outlined in this provocative article. All of them get at the core of the sector’s most entrenched problems.
But with every challenge lies an opportunity. Particularly for entrepreneurial, mission-driven organizations and enterprises. That’s because individuals continue to be the largest category of givers, with 80% of total giving when you include charitable bequests. And this number is even higher when you consider the significant increase in foundation giving came from small, family foundations, which of course are another subset of individual giving.
One of the keys to unlocking more philanthropic resources is opening up and offering new ways to connect individuals with the causes and issues they care about. That’s one of the things that is so exciting about social enterprises – they expand the options. And allow supporters to actually ‘enjoy’ some of the benefits of their giving.
Take Elijah’s Promise, an innovative nonprofit that serves more than 100,000 meals per year and trains previously unskilled workers for careers in the food service industry. Their commitment to using food as a tool for broader change led them to establish Better World Market – a retail food operation that sells local produce, prepared meals and baked goods from their culinary school, among other things. All proceeds go to fight hunger and break the cycle of poverty.
Of course, this is a big issue and there are no quick fixes. But it does require bold solutions. And if any of these new, ‘hyper local’ place-based food initiatives, arts and creative businesses – and the millennials who champion them – are any indication, the business of philanthropy is indeed changing. By fundamentally altering the value proposition, nonprofits and other mission-driven businesses move from counting leftovers to being a part of the wealth creation process itself.