Philanthropy Will Increase in 2017 and 2018

When it comes to philanthropy, I have some excellent news to share.

In 2017 and 2018, charitable giving will grow faster than the annualized average for the past ten years, according to a new report researched by the Indiana University Lilly Family School of Philanthropy and presented by Marts & Lundy. Based on careful economic modeling, the new study supports the hopeful assessment I made at the close of last year.

The report predicts that overall giving will increase by 3.6 percent in 2017 and 3.8 percent in 2018, when looking at inflation-adjusted dollars.

Amir Pasic, PhD, the Eugene R. Tempel Dean of the School of Philanthropy, says:

philanthropy-outlook-2017-2018Continued growth in the overall economy will lead to a rise in philanthropic giving this year and next. Our research indicates that all types of donors — individuals, foundations, corporations and estates — are likely to increase their giving in each of the next two years. Nonprofit organizations and the people they serve can find encouragement in the anticipated expansion of giving.”

While the report predicts 2017 and 2018 giving will exceed the most recent ten-year annualized average increase in giving of 0.5 percent, the average rate of growth will be below the most recent 25-year (4.4 percent) and 40-year (4.9 percent) annualized averages. So, while the forecast is definitely good, it’s not necessarily great.

Three of the leading economic factors that will influence the rate of growth in charitable giving are:

  1. Stock value growth.
  2. Gross Domestic Product growth.
  3. Household Income growth.

All three of those areas are likely to increase over the next two years. In turn, this will result in an increase of giving across all donor types:

  • Foundations will lead the way in both years (5.9 percent in 2017 and 6.0 percent in 2018).
  • Estate giving is expected to increase by 5.4 percent this year and 5.2 percent next year.
  • Individual giving is predicted to grow 3.0 percent and 3.2 percent respectively.
  • Corporate giving will lag behind the other sources, rising by just 2.4 percent and 2.7 percent respectively.

Una Osili, PhD, Director of Research for the School of Philanthropy says:

As we consider the outlook for 2017 and 2018, it’s important to note that individuals continue to play a leading role in driving both giving trends and growth in giving. Individual donors are responsible for the majority of charitable giving, as well as the increase in foundations, donor advised funds and other innovations in giving.”

In addition to providing philanthropic growth predictions, the report identifies some dramatic changes in the American philanthropic landscape. John M. Cash, PhD, Chair of the Board of Directors of Marts & Lundy, reveals:

Contributions to donor-advised funds and to family foundations continue to grow significantly, leaving enormous amounts of charitable dollars waiting for future distribution. These donors are seeking meaningful relationships with organizations and the kinds of inspirational ideas that will fulfill their philanthropic aspirations. While the outlook is certainly good, the need for vigorous and meaningful engagement on the part of recipient organizations has never been greater.”

While the philanthropy forecast is hopeful, there are a number of variables that could depress actual results. Unexpected national or global recessions, a natural disaster, major terrorist attack, war, unanticipated dramatic changes in government policy, failure to enact anticipated changes in government policy are just some of the variables to watch closely. The report details a full range of critical variables.

To download a free copy of The Philanthropy Outlook 2017 & 2018 report, click here.

So, do you share the report’s optimism? How will this information affect your goal setting?

That’s what Michael Rosen says… What do you say?

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