How Nonprofit Giving Strategies are Impacted by Foundations vs Individuals

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The 60th annual report on philanthropy within the United States was recently released by The Giving USA Foundation. As the news media covered this report, the primary focus was on giving by individuals as well as overall giving. You can read the full report by clicking here. Read on to understand some critical information on giving trends that most likely affect your nonprofit giving strategies.

Overall giving reached its highest peak since the report’s inception 60 years ago – nearly $360 billion dollars, signaling an uptick in charitable giving and representing more than 2 percent of the country’s GDP.  To put this in perspective, that’s slightly greater than Colombia’s GDP (ranked at 32) and just below United Arab Emirates GDP (ranked at 31).

Individual giving continues to be the primary source of giving across the country, representing 72 percent of all dollars given.

End of story, right? Not so fast. A deeper, more critical look at the data shows some interesting trends. While charitable giving by individual donors continues to dominate the overall giving landscape, the report shows that individual giving as a percentage of overall giving is shrinking. Back in the ‘70s, individual giving represented 83 percent of all giving.

The area that has steadily shown the most growth over that same time period? Giving by foundations. Back in the ‘70s, giving by foundations topped out at 6 percent. Based on the most recent Giving USA report, giving by foundations is now at 15 percent.

So, what does this mean? That giving by foundations is one of the fastest growing sources of dollars for nonprofits, and shouldn’t be ignored. As a matter of fact, from 2012 to 2014, giving by foundations jumped a whopping 16.4 percent. And it’s really only been in the last 15 years that giving by foundations has really grown. Since 1999, giving by foundations has nearly doubled. No other source has grown that much in the last 15 years.

Contributions from individuals will never cease to play a significant role the strategy of a nonprofit. However, foundations are becoming another significant source of potential income that should be seriously considered. Foundations have money to give whereas individuals will flexible income will ebb and flow with the economy. Here at RBP Methods we desire to help nonprofits achieve their financial goals by supporting their accounting and finance needs. Contact us to learn more about how we might be able to help you.

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