At first glance, this year’s Giving USA Annual Report contains good news for the nonprofit industry. According to the report, donations across the the philanthropic landscape grew by 1.4% last year to a staggering $390 billion. And further, for only the sixth time in 40 years, all nine major philanthropy subsectors experienced giving increases. That increase represents 2.1% of gross domestic product, just above the 1.9% average of the past 40 years.
Diving Deeper into the Numbers…
The largest factor in the increase in giving was an increase in gifts from “living individuals”–up 2.6% over 2015. Giving by foundations is the highest yet, even after adjusting for inflation, though companies have yet to reach a pre-recession high of $18.7 billion in donations.
But when you dig a little deeper into the numbers, you realize that not every organization had an up-and-to-the-right 2016.
Donations grew slower than they have in recent years. Key economic indicators grew modestly and a divisive election season brought uncertainty. Stock market performance was strong in the last weeks of 2016, but market results were more mixed earlier in the year. All of this likely gave donors pause.
While giving was up on a macro-level, many organizations are having a different experience. According to the donorCentrics Q4 report…
- 42% of organizations saw a decrease in giving last year.
- 60% of organization experienced a decrease in donors.
So where does this leave us? And what can your organization learn from these trends?
Where Do We Go From Here?
As for 2017, it’s unclear how giving will fare. Gross domestic product grew at its slowest pace in three years in the first quarter of 2017. As of mid-May, the S&P 500 had seen returns of 6.5%, down from a 9.5% increase for all of 2016 (but well above 2015’s sub-1 percent gain). The jury is still out.
So while macro-level of giving performed fairly well in 2016, we don’t know what 2017 holds. And for that matter, your organization may not have fared quite as well as the industry in general.
Those decreases mentioned above likely result from the fact that new nonprofits are opening every day. Charitable organizations are sharing smaller and smaller pieces of the philanthropic pie year after year.
If you are one of the organizations that did not see industry benchmark results, Pursuant’s 3D assessment may give you the insights you need to adjust your strategy and have a much better year in 2017 than you did last year.
