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What You Need to Know about the "New Normal" of Charitable Giving

May 19, 2015
What You Need to Know about the "New Normal" of Charitable Giving
Rebecca Greenhalgh
Senior Associate, Pro Bono at Ashurst

Rebecca is a practicing solicitor with extensive experience in developing and managing pro bono initiatives within a law firm setting, with particular emphasis on schemes suitable for overseas and dual-qualified lawyers. She has experience at the International Criminal Tribunal and is a member of the CEO’s Committee for the Access to Justice Foundation.

American giving is changing. Charitable giving among Americans was up last year, increasing 2.1% as compared with 2013. This represents a three-year upward trend in giving, in line with the economic recovery. However increased giving behavior doesn’t represent a return to the past: Blackbaud, a non-profit software provider, recently released their Charitable Giving Report based on data from 4,798 American non-profits representing $16.2 billion in total fundraising for 2014. Here’s what you need to know about the “new normal”.

SMALL NON-PROFITS ARE LEADING THE WAY

Across the board, small non-profits (those with total annual fundraising of less than $1 million) are leading the pack in innovative giving. Small organizations grew by 5.8% in 2014 in a year-over-year analysis. This is compared to just 1.3% for both medium and large non-profits. According to the report, “these agile organizations are embracing new approaches and modern technologies to fuel their growth. They may have more limited resources, but their sustained growth rates over several years are a promising sign”.

ONLINE GIVING IS THE FUTURE

Online giving grew by 8.9% last year, on top of 2013’s increase of 13.5%. It may come as a surprise that only 6.7% of fundraising came from online giving, but the sustained and significant growth in this sector suggests it’s only going to become more important as donors move away from cash in all aspects of their lives. Small non-profits are again leading the way on this one, increasing their revenues from online giving more than organizations of any other size.

These changes represent tremendous opportunity for new and agile non-profits. As Americans increasingly turn online for their giving, non-profits can learn to best cater to the current technological environment by focusing on making donations easy and efficient. The success of small organizations points to a comparative advantage for agile, innovative and flexible organizations which are able to adjust efficiently to complexity and change.

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