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In the wake of recent news that individual giving to charities slipped again last year, commentators have examined root causes and put forward creative solutions, yet one source of influence deserves greater focus: institutional philanthropy.
Indeed, foundations and other professional grant makers influence everyday giving in powerful ways. I’ve seen this firsthand, both as a fundraiser in my early career and now as a grant maker at the Bill & Melinda Gates Foundation, where we work to create a world where everyone has the opportunity to lead a healthy and productive life. It’s a goal that cannot be achieved alone, and everyday givers are crucial to advancing it.
How exactly do grant makers influence everyday givers? By providing essential and comprehensive operating support to nonprofits, they play a vital role in strengthening organizations’ capacity to secure donations from everyday donors. Going one step further, some foundations (not enough!) support the institutions that create a strong environment to encourage and promote giving. This is good.
But funders can also hinder everyday giving without even realizing it. Data from Give.org suggests that many households that stopped giving to charity did so because they felt larger donors obviated the need.
Worse, grant-making practices can erect barriers to giving. For example, too often we shortchange the operating support that creates a strong core, starving central functions, including donor development, that can sustain impact.
Grant makers can invest in the following areas to build generosity at scale, create opportunities for nonprofits to increase their impact, and embrace everyday givers as fellow travelers on the road to addressing society’s most pressing problems.
Invest in campaigns that reinvigorate giving norms and nurture generosity. Campaigns like GivingTuesday have been shown to have a 500-times charitable return on investment. The newer BackBlack campaign is calling attention to — and closing — funding gaps for Black-led nonprofits. Campaigns like these can effectively prompt both current and potential donors to give more while fostering new giving norms.
Support pro-giving policies in partnership with nonprofits. Public policy is vital to foster charitable giving. Even within the limits placed on foundation advocacy, grant makers can do much to support nonprofits that are working to create a legal environment in which philanthropy thrives. For example, the Aspen Institute partnered with the federal government to digitize and open IRS Form 990 data, making it easier for donors to find information on nonprofits. Legal groups like International Center for Not-for-Profit Law are doing important work to make sure that civil society thrives and donations can flow across borders to support humanitarian and others needs around the world.
Support research, data collection, and analysis that powers giving. Missing, outdated, or incomplete data often hinders effective fundraising. By investing in research, philanthropists can make a lasting impact. For instance, behavioral science insights coming from the nonprofit Ideas42 are enhancing our understanding of donor behaviors. Digital data brokers like Charity Navigator and Candid provide critical data infrastructure for the sector, while newer datasets like GivingGap and GlobalGiving’s Atlas are filling in blanks to help donors find and fund Black-led and Black-founded and global charities, respectively.
Support digital tools and technologies that enable giving. Digital technologies have revolutionized the way we give — and it’s likely just the beginning. Philanthropy can support the growth of these tools to reduce fundraising friction. Digital giving-circle provider Grapevine.org, for instance, connects donors with shared interests to pool their donations, enhancing fundraising efficiency and contributing to the fast-growing giving-circle movement.
Give grants to strengthen nonprofits’ everyday donor development efforts. To sustain and attract more donors, nonprofits need the talent, resources, and flexible capital to experiment and invest in relational fundraising. The onus is on funders like us to listen to the organizations we’re trying to help and make sure we’re being great partners in this pursuit.
There remains an immense opportunity to reverse the downward trend in everyday giving. To sustain and grow donor engagement, we need to strengthen the tools and environment that nurture generosity. Funders can do more to advance those efforts and drive impact for our world.
The foundation’s Sophie Snowden, program officer, and Jasmine Marrow, senior program officer, contributed to this article.