If someone had been asked in 2017 to predict how the ensuing five years would affect charitable giving, there’s no chance they could have accurately described the past half-decade or the way it transformed philanthropy. We’ve been dealt too many wildcards, endured too many surprises and witnessed too many globe-shaping events for anyone to have imagined the world we live in now.
A global pandemic? A full-scale Russian attack on a democratic nation? The rise of cryptophilanthropy? The meteoric growth of the donor-advised fund (DAF)? And so on. Sure, some folks might have seen one or two of these events coming, but all of them in a timeline collision? Not likely.
While it can be tempting to second guess our past selves and wonder why we were caught so off-guard, whether or not we could have anticipated all of this is not a material concern. What does matter is what we learn from these experiences and how we leverage them to democratize giving and equip donors to do the most good possible with their greatest resource: generosity.
So what have we learned from the past few years?
First of all, we learned from the COVID-19 pandemic that Americans will rise to the challenge when there is a tangible cause. We saw this in the past with Hurricane Katrina, 9-11, and other large-scale disasters, but this time it seemed more amped up. Not only did American individuals, nonprofits, institutions, agencies, and others open their pocketbooks, but motivated community members overwhelmed hospitals and other caregivers with donations of water, masks, cash, pizzas for workers, and more.
We also learned with COVID, the invasion of Ukraine, and with countless other causes, that Americans will respond quickly to need if they have tools that make it easy. They’re accustomed to text-to-give campaigns, QR code giving, and so on. Why? Because technology makes it easy to turn the idea of giving into the action of giving.
We have seen that Millennials, Gen Zers, and other up-and-comers are remarkably generous when they can give to causes that move them, in some cases surpassing their older peers in terms of percentage of the demographic that gives. We already knew that these younger donors used technology to give the same way they use it to do everything else – prolifically – but situations like the COVID pandemic have shown us that they are eager to give so long as they can do it with a couple of clicks.
As the world became more comfortable with the existence of cryptocurrencies, donors quickly embraced the idea of cryptophilanthropy. While the concept still is in many ways in its infancy, billions of dollars in cryptocurrencies (most notably, perhaps, to support Ukraine) have been donated to nonprofits, a process boosted by the fact that it is often easier and faster to move cryptogifts around the world than other forms of currency.
The donor-advised fund has become the world’s fastest-growing philanthropic tool, not only attracting billions of dollars but also distributing nearly $35 billion in grants in 2020, up from $27.3 billion the prior year. With its ability to offset the tax impact of cash infusions like those many investors saw in recent years with the boom in initial public offerings, its opportunities for engaging families in giving and other attributes, the donor-advised fund continues to grow and position itself as a mainstay in the giving world.
And while all of this has been happening, we’ve learned that people who bank are people who give. Nearly half of bank customers donate between $100 and $2,500, and some give much, much more. And with whom do they tend to bank? With banks that show that they care about what their customers care about.
So, how should philanthropy service providers, financial institutions, and nonprofits respond to these developments?
- We need to make it easier for NextGen donors to take advantage of donor-advised funds, lowering the barriers to entry and assuring them that donor-advised funds are not just for high-rolling donors.
- We need to step up the connection between bank accounts and giving, making it easy to give directly from accounts and to manage charitable giving within banking apps.
- We need to embrace cryptophilanthropy, taking advantage of tools from firms like The Giving Block to make it easy to give and receive donations through cryptocurrency.
- We need to show donors and potential donors that we are dedicated to being forces for making the world a better place.
- We need to continually push for advancements in technology that will make giving even easier, and that will do an even better job of engaging donors where they are, and allowing them to give quickly and easily, when they want to.
- We need to wear our causes on our sleeves, worrying less about who we might exclude with bold choices and more about who we might include with big visions.
Progress is happening in many of these areas, and some players are blazing new trails, but I believe we can’t take a piecemeal approach to this, nor can we all work independently and expect to keep up with possibilities. To truly seize this opportunity, I think all of the players and sectors in philanthropy must work together and toward a common purpose: making it easier for more people to engage in giving.
I believe that someone looking back on this time five years from now will say that this was a transformative moment in philanthropy. And the question they will ask us is this: Did we make the most of this moment? Did we shape it and leverage it to bring more donors to the table and put more money to work for good? Or did we, once again, find ourselves looking back and wondering, “What just happened?”