Recent events such as tax law changes and the widespread use of social media are expected to influence the behaviors of charitable donors. These trends will help to shape philanthropy in the coming year.
Giving Will Become More Concentrated
The share of donations coming from the largest donors will grow. The very wealthiest are expected to provide about 30% of all charitable contributions. This concentration of donor activity in such a small group has benefited larger organizations concerned with large-scale change. At the same time, there has been growth in the number of smaller nonprofit organizations. These smaller charities will wind up competing for dollars from less wealthy donors.
Tax Law Changes
These bigger donors will have their eyes on the changes brought about by Tax Cuts and Jobs Act of 2017. The new tax rules may encourage donors to release their donations less often while still being able to take advantage of the tax deduction. Nonprofits may wind up waiting longer than usual for some of their funds.
The Push For Integrity
Donors are willing to take responsibility for knowing where their donations go. They keep themselves informed about the organizations to which they choose to give. This is particularly true with younger ages. Before donating, many are taking the time to look into how nonprofits are using the money they receive. Technology has made this type of fact-finding much easier than in the past. These donors expect integrity from the organizations that receive money. Because they want to benefit society, they take steps to give to causes they can trust.
Donors Using Social Media To Inspire Giving
Social media and crowdfunding will continue to be powerful forces in charitable giving. These platforms don’t just provide a way to donate; leverage compassion and personal connection to drive donations. By sharing information about causes they believe in, donors use their authenticity to influence others.
Socially Responsible Investing
The same values that lead millennials to give charitably also inform their for-profit choices. Frequently, they are investing in businesses that embrace their values and priorities. For them, business and good works are not mutually exclusive. They want their investing efforts to provide a social benefit. This perspective also affects their behavior as customers and employees.