New study ‘How America Gives’ provides huge insight into nonprofit fundraising changes

A brand new report via the Chronicle of Philanthropy takes an in-depth look at the relationship between nonprofit fundraising, donor earnings and contributions in the United States both pre and post recession and the findings are incredibly informative. There will of course be a great deal of conjecture about how the data reflects on the gaps between the highest and lowest earners and how they in turn support the nonprofit sector but rather than focus too deeply on that I thought we’d focus on what the data tells us and how it relates to fundraising overall in the US for 2014 and beyond. This is a huge study compiled from IRS data which represents some 80% of all nonprofit giving in the United States and is thus far more weighty than a snapshot of how donors give.

The findings, which aren’t really intuitive show that during the leanest years that the economy has seen for decades giving from the poorest members of society actually increased while at the same time the highest earners have gradually given less and less. You’ll see on the graphic below that a unique and unexpected u-shaped curve appears with the upper middle and  upper income earners giving a lower net percentage than those at the lowest end of the spectrum.

image courtesy vox.com

It’s data that must not be grossly misinterpreted though, in overall terms the wealthiest give far more in total to charity from the logical platform of capacity/ability to give, but we’re now looking at a very different profile of giving tendencies than were been seen prior to the recession. In some senses this makes the largest contributions and contributors even more important than ever before, a fact that nonprofits and foundations are certain to be aware of. Whether tax changes or the relative health of investment portfolios means that these trends are likely to change is difficult to ascertain but to see the same data a few years from now would be fascinating.

What is difficult to establish is how the poorest were able to give more when those above were incrementally tightening their giving as the economy contracted. The answers are in part hidden within the data which shows that the bulk of donations from the lowest earners were given to churches, local organization or other religious charities and typically those that had a clear focus on the local community. At times of greatest hardship it seemed that providing any support possible to the community became even more paramount.

What is also clear is that the recession didn’t impact everyone on an equal basis, not even close to it. As the economy shrank it was the lower and middle classes that saw the greatest slowdown in earning and post-recession it has also seen the wealthiest make the largest strides forward once more which continues to demonstrate an ever-increasing wealth gap. The data provides a great deal of information but also poses a multitude of questions that those in the nonprofit sector will seek to better understand.

image courtesy vox.com

There’s nothing that suggests the wealthiest are not prepared to give, a huge proportion still do, but the overall statistics show that we’re looking at a very different profile of the biggest contributors than in years past which certainly means that nonprofits will be very active in capturing that support, particularly because giving at that level is far more likely to go to sub-sectors such as museums, schools, and hospitals versus community programs aimed at assisting those least fortunate.

Many are taking this data as proof that the wealth gap now equates to an empathy gap but that’s may be too general of an interpretation to be very valuable. How nonprofits respond to these changes might prove to be as interesting as the statistics released.

notes: The full study was assessed by The Chronicle of Philanthropy and an executive summary is available via this link.

There is also a fascinating tool which allows you to look at the giving data by city, state or even zip code in addition to demographic views to bring even more insight.

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