According to Giving USA, philanthropy has remained stagnant at 2% of GDP and 2% of disposable income for the past 40 years. This immobile figure has baffled fundraisers and philanthropists for decades, and others have written extensively on the subject. Some have even issued challenges for the profession to increase giving by a percentage, yielding an additional $170 billion to nonprofits. Still, others have offered reasons why this number will likely never change.
Despite many suggestions, lamentations, and suppositions, the number has not moved and questions remain: Why has that number remained stagnant? Do we need to expand our definition of what it means to give charitably? Should we to start including sources that are more difficult to track such as crowdfunding contributions, the money immigrants send to their families abroad, the loose change placed in the collection plate, the busker’s open guitar case, or a hungry stranger’s hand?
It would be foolish to assume that these factors don’t affect the percentage of disposable income individuals have to give to philanthropic causes. Books, let alone blog posts, could be filled with analysis of the complexities and nuances of each element and these questions would remain unsatisfyingly unanswered.
In some ways, it’s beside the point. Put simply, these competing interests, save perhaps for crowdfunding platforms, have existed throughout this 40-year accounting period. To now include them would only skew the numbers. What is considered to be traditional philanthropy, and what qualifies as an itemized deduction on individuals’ tax forms, has remained stagnant. It is this realm where fundraisers can exert some influence.
Is exceeding 2% of GDP an impossible reality? Many have tried and failed to achieve this goal. Should our sector simply accept that it’s a victory to have increased giving alongside GDP throughout this time period and move on?
Despite the challenges, it is worth striving for 3% of GDP. $170 billion is a monumental figure, both for the difficulty with which it will be obtained and the impact it will have on our charitable sector. Each nonprofit has a role to play in this task. Giving is a very personal choice. A national campaign challenging individuals to give more of their money can feel intrusive. A personal appeal from an organization a donor already supports, demonstrating the impact of an increased gift, is much more inspiring.
These kinds of donor relationships require intentionality and good systems. In CCS’s experience, mastering the basics of fundraising is what allows our clients to raise billions of dollars. We firmly believe that with these crucial elements in place, 3% of GDP is not only achievable, but inevitable.
Is your organization trending alongside or above the national average? Are you trailing just behind? If you want to maintain or improve your fundraising performance, here are five crucial strategies to have in place for a successful development office:
Strong Case for Support: Know your organization’s story and why your mission matters. Create a narrative for your donors conveying the importance of your work and the urgency of its purpose.
Donor Retention: Stay connected to your donors and thank them profusely. Consider hosting small events to help them network and keep them updated on how you are impacting the local community. Monthly newsletters are a wonderful way to let your supporters know how their dollars are being put to work.
Strategic Cultivation: Know your donors and consistently encourage them to higher levels of personal investment and giving. Always work to strengthen donor relationships by moving your organization’s closest friends from volunteers, to donors, to major gift donors, and finally to planned-giving supporters.
Donor Education: Short of offering your donors tax advice, educate them on the many options to give back to your organization and why it is so important. Donors want to be invited to invest their time and resources into an organization that compels them.
Good Data: Track who is giving to your organization, how often, and how much. Has a donor that previously gave regularly fallen off your radar? Take the time to reach out to them, update them on the good work the organization is doing, and learn why they have chosen not to give anymore.
By consistently implementing these strategies, we can help philanthropists surpass that stubborn 2% of GDP and, most importantly, have a greater impact on the causes they care about the most.
About the Author
Meg O’Halloran is an Executive Director with CCS. Meg has significant experience in capital campaigns, major gift solicitation, grant writing, volunteer, and prospect management. While with CCS, she has worked in the environmental, education, and religion sectors. Meg is a volunteer author for Giving USA: The Annual Report on Philanthropy and a member of the Association of Fundraising Professionals (AFP).