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If you’ve been in fundraising very long you recognize that the success of a campaign hinges on much more than simply how well the strategy is executed. The economy, the political and social climate of the community your organization serves, and global events can all impact the bottom line for you each year.

That’s why it’s important for you to know what you can anticipate this year end and prepare accordingly. We’ve corralled the most important findings from the Atlas of Giving mid-year report and the Philanthropy Outlook for 2016 and 2017 to give you a brief 3-part report here on the Pursuant blog.

Today we’re launching the series with an update on the current state of charitable giving.

The Current State of Charitable Giving

Charitable giving was flat for the first half of 2016 showing a slight gain of 0.9% or $241.28 billion overall. Two subsectors, human services and nature/environment, saw giving increase over the last 12 months in the 3.5-4.5% range. Other subsectors saw nominal increases of under 3%, and giving to religious causes actually declined over the last year.

Donors are very uncertain right now – about the economy, stock market, fear of rising interest rates, inflation, the effect of Brexit on the world economy, and how the outcome of the upcoming election will affect their taxes, their income, Social Security, and many other things.

In addition, donors are distracted by the Presidential campaign, the growing number of terror attacks worldwide, and notable international events. In short, though they are not sitting out completely, they are making no significant new commitments, nor are they pulling back their regular support.

Evidence of this “wait and see” attitude can be found in the substantial growth of Donor Advised Funds. The National Philanthropic Trust reports 1 contributions to DAFs grew by 14% from 2014 to 2015, with no end in sight. This growth suggests donors prefer to remain uncommitted in their current giving decisions.

One of the most astounding announcements in the last year concerns the British exit from the European Union. While markets have bounced back, some negative impact on giving is being seen in the UK. It seems inevitable that the US economy and US giving will also be impacted for the following reasons:

There is ample evidence that volatile financial markets slow down the U.S. growth engine which in turn impacts individual giving:

  • A strong dollar hurts international trade. In addition, the global GDP is expected to retract worldwide by 1%.
  • Middle class income has fallen 4% and wealth has dropped 28% since the early 2000’s.
  • A 10% increase in the value of the US dollar equals a 0.4% decline of real US GDP, which has historically hurt giving.
  • U.S. unemployment, while low, will most likely increase. This will impact charities that depend on many small gifts from many donors.

The general instability represented by these factors and other key indicators strongly suggest low growth in charitable giving.

Please pass this post along to anyone in your organization who would benefit from a brief update on the current state of charitable giving. The current state of charitable giving impacts the charitable giving projections for 2017. Next week we will share some practical ways you can prepare for the upcoming challenges.

To learn more about Pursuant’s approach to fundraising, download the free content paper Optimize Your Donor Pipeline. Download this resource today to learn how you can optimize your strategy and create the most opportunities for fundraising success.