The final quarter of 2018 promises even more uncertainty than usual for fundraisers, thanks to Mother Nature, the new federal tax code, looming midterm elections, and more. Here are seven things to be aware of between now and the end of the year:
More big gifts are likely.
In September, Jeff Bezos, founder of Amazon, pledged $2 billion to fight homelessness, help low-income families, and build preschools in underserved communities. This month, Nike co-founder Phil Knight gave nearly $1 billion in Nike stock to an unnamed charity (likely his family’s own Knight Foundation), and Stephen Schwarzman, the financier, gave MIT $350 million to found the MIT Stephen A. Schwarzman College of Computing. Wealthy donors are also fueling unprecedented campaigns like those at Harvard and the University of Michigan, which are rolling up eye-popping results: $9.6 billion for Harvard, and $5 billion — and counting — for Michigan.
The world’s wealthiest people will have more to give. A study released Friday by the banking giant UBS and the accounting and audit company PWC show that the wealth of the world’s 2,188 billionaires rose 19 percent in 2017, the biggest one-year jump ever recorded. (Chinese billionaires saw their wealth climb 39 percent.) U.S. billionaires, the largest segment of this group, had a 12 percent increase in their assets, according to the report.
The fall’s megagifts may help make up for a slow first half of 2018 for gifts of $1 million and up. The Chronicle counts 383 gifts of at least $1 million through June this year, totaling nearly $4.5 billion, which is down nearly $2.2 billion from the first half of 2017. That period last year also saw an increase in gifts of seven figures or more, a total of 492.
Giving overall is weak.
Total giving was down just over 2 percent in the first half of 2018 compared with the same period in 2017, according to a Fundraising Effectiveness Project report released in September. Worse, the number of donors fell nearly 7 percent through June, compared with the first half of the previous year. (A study by the same group, released in August, said 2017’s fundraising was up only 2 percent over 2016, just keeping pace with inflation.) The takeaway: Giving is already behind what it was last year, which means there will be more ground to make up at year’s end. This finding should “ring alarm bells for most charities,” said Elizabeth Boris, founding director of the Urban Institute’s Center on Nonprofits and Philanthropy.
The stock market’s ups and downs are no reason to panic.
This year has seen the markets fall precipitously a few times, notably in February, when the Dow Jones Industrial Average dropped 1,175 points in a single day, and twice in October, when world markets slid several days in a row. The tech-heavy Nasdaq Composite is up 3.8 percent for the year as of Friday’s closing bell on Wall Street, but most big indexes, like the Dow Jones Industrial Average and the S&P 500, have seen the year’s gains wiped out. With skirmishes over trade brewing with China, widespread geopolitical unrest, rising interest rates, and a bull market “correction” likely at some point, expect more volatility. But don’t panic.
Disaster relief will be the hot cause this season.
Aid to survivors recovering from Hurricane Florence, Hurricane Michael, and the September earthquake and tsunami in Indonesia is likely to be top of mind for donors. Forty-eight percent of 1,000 donors surveyed last month by Classy, the online-fundraising company, said disaster relief is currently their top giving priority. Roughly half of donors said they had already contributed to Hurricane Florence relief efforts; of those, one-third said they were likely to give again to support relief and recovery.
Midterm elections could scramble donors’ priorities.
From 2017 and into this year, causes that focused on civil rights, immigrants, reproductive health, and the environment benefited from the election of President Trump. The outcome of this November’s House, Senate, and state elections could continue the “Trump bump” or generate a new trend. One in four donors in Classy’s survey last month said the midterms will help determine which causes they will support at year’s end.
New tax law’s impact will be revealed.
In the first full year under the new federal tax rules enacted last December, fundraisers are holding their breath to see how donors react. Though tax considerations are not the primary reason even wealthy donors cite for giving money, charities are struggling with whether to emphasize tax benefits in their appeals to donors, now that the doubling of the standard deduction gives fewer taxpayers an incentive to make charitable gifts.
A proposal made in August by the Trump administration to cut the capital-gains tax could also reduce incentives for giving if it becomes law.
An early sign of how this will all play out may be the practice of “bundling,” in which donors make a big gift one year and skip the next year or two to maximize their tax benefits. Although only 30 percent of donors who itemized in 2017 said they were even aware of “bundling,” according to a new Fidelity Charitable survey, expect some donors to take advantage of it this year. Check in with your midlevel supporters in particular, experts suggest, to see if “bundling” is part of their strategy this year.
Online fundraising matters more than ever.
Facebook has raised $300 million for charity from birthday fundraisers over a year. Giving Tuesday and other giving days continue to grow, raising ever-more millions and attracting new supporters. And yet, lots of organizations still struggle to maintain an online presence that can spread their message and make giving easy.
It’s time to step up: Forty-eight percent of people in September’s survey by Classy said they would give more to their favorite charity if it were easier to donate online. Furthermore, 54 percent of donors who are in their 30s or younger say they don’t trust that a charity with a poor online experience will use their money wisely. Only 20 percent of boomers say the same.
