Do you consider yourself a philanthropist?
written by TGS volunteer Mindy Ong
The Greater Sum Foundation posed this question to a few of our friends and supporters to find out their views on giving. More than half of those surveyed felt that they were not philanthropists. As one put it, “to me, a philanthropist is someone who is able to make a transformational gift. I consider myself a giver.” The responses were illuminating and shed light on how people view philanthropy.
Charity is not the poor cousin of philanthropy
The view that philanthropy must involve a large donation is not uncommon. “Charity” is often used in this space to describe giving that fulfils immediate or urgent needs, while “philanthropy” is often defined as that which is more strategic, longer-term and able to make a more sustainable impact on the organization receiving it.
And yet, going by the dictionary definition of the word, the size of the donation doesn’t matter. The Merriam Webster dictionary defines philanthropy as “an act or gift done or made for humanitarian purposes.” Semantics aside, giving can certainly serve different functions. But there’s no need to frame the two objectives as a dichotomy. Benjamin Soskis, a historian and journalist, traces the history of the divide between charity and philanthropy in a fascinating monograph, and on concluding, sums it up well - “it is possible to seek more charity and the end of charity with equal vigor; that there is virtue in thinking big and in thinking small; that the imperatives of charity and philanthropy can both guide a single institution; that there is ample space for each in the human heart.”
This article is not about whether charity and philanthropy are the same or different. The key point here is that over-adherence to a strict point-of-view can be unhealthy both for the donor as well as the nonprofit. Everyday giving has a huge impact and should not be downplayed. Data from the Fundraising Effectiveness Project found that during the pandemic, charitable giving in the US grew 10.6% in 2020 over 2019, driven primarily by gifts of less than $250 which grew by 15.3 percent over 2019. This was even before
changes were made to the tax rules in 2021 to allow everyone to deduct up to $300 in charitable donations without having to itemize deductions on their tax returns. Small donors may also be particularly important for smaller organizations – an Urban Institute study found that organizations with annual budgets under $500,000 report that roughly 30% of their revenue comes from individual donations (compared with 18% for
large organizations, defined as those with annual budgets of $500,000 or more).
Giving is personal
In our small survey, we asked respondents how they give, and how they make giving decisions. While one mentioned the organization’s effectiveness and impact based on Charity Navigator ratings, most of them said they decided based on whether the cause, mission and values of the organization resonated with them, and their relationship with the organization.
And what influences those values? Family is a huge influence. In a 2018 study commissioned by Fidelity Charitable, which surveyed 3,000 donors who itemized charitable deductions on their most recent tax returns, respondents reported that a parent (22%) or a spouse/ partner (18%) inspired them the most in their charitable giving approach. Another study in 2021 found that 61.5% of couples who are married or
live together make giving decisions together, which though lower than in 2005, is still significant.
This is also reflected in Greater Sum’s small sample survey, where many cited being
raised in a culture of giving, which influenced their own giving behavior later. Paul F Morris, a Greater Sum Board member, shares that “we have sought to develop this belief in our children. Since they were young, three or four, we have, as a family, practiced giving as a group. We have a process: decide the cause area, then develop a list of potential organizations to donate to, then the kids (now ages seven to 16) research one and do a short presentation on the need, value and impact. We then discuss and vote - everyone has an opportunity to speak and to vote. Throughout the year, when we are together we put money into the pot, which then becomes what we donate. Typically our giving has gone to very local organizations whose missions focus on youth and families.”
Macro trends influencing everyday giving
These statistics and anecdotes indicate that giving is a very personal decision, and building a relationship with donors (and their families) is important for nonprofits. This is not a new insight. However, beyond the individual level, I also wanted to draw attention to three macro trends that are influencing everyday giving. Nonprofits need to understand, and confront or leverage these trends in order to optimize their fundraising strategies.
1. Generational trends
Lots of research has been done on generational trends in giving, so I won’t cite it all here. But one key observation is that younger donors tend to give smaller amounts. Whether this is because of their lower current spending power, or due to preferences or values, is an open question, but there’s no doubt that this group will become the future of your donor pool. As a nonprofit, do some research to understand these trends, then explore how to tap into this pool given their inclination for smaller donations. One interesting angle to consider is how to tie your volunteer and fundraising efforts together, which may help you attract younger donors and those who have a strong family culture of giving.
2. Economic trends
The current economic headwinds may be either a challenge or an opportunity to engage smaller donors, depending on how your nonprofit responds. Nonprofits should prepare for the possibility of people giving smaller amounts or less frequently, but this doesn’t mean that they should pivot to focus entirely on large donors. Don’t be fair-weather friends – relationships that are lost are difficult to win back. It’s still critical to maintain the connection with everyday donors, and enable them to support you in more bite- sized, manageable ways. Here’s where the next trend on technological innovations may help.
3. Technological trends
New, innovative technologies are making small donations more convenient and cost effective, allowing giving to be integrated into everyday life. Such very small donations ranging from a few cents to a few dollars are known as micro-donations, and they add up. Routine activities can become an opportunity to give back, such as by rounding up on your morning coffee, or making a small donation whenever you purchase something online. And now, nonprofits who earn a Candid Seal of Transparency can accept donations using Apple Pay, providing donors with a convenient, easy and secure way to donate. Nonprofits need to look into these new technologies and diversify their fundraising approaches to cater to different profiles of donors.
In summary
As we round off this blog post, I’ll circle back to the question we started off with. Each of us can be a philanthropist, and nonprofits would do well to engage the everyday giver. I’ll leave you with a quote from our survey which sums it up nicely, “I think society has a tendency to define a philanthropist as someone who gives large amounts of money. I realized you don’t have to donate a lot to make a difference. Truly for some organizations and causes, every little bit counts.”
