2017 saw the phrase “Golden Age of Giving” take hold as individual philanthropists make up 87 percent of all charitable giving in the U.S. As new tax laws, technology, transparency, and public opinion shape donor giving, philanthropy has become more complex and results-focused. For instance, 27% of donors say their approaches have changed due to technological advances, and 41% say they changed their methods due to their new knowledge of nonprofit effectiveness.
As new tax laws and amendments are set forth and implemented, many people question how charitable giving will be impacted. While some are concerned that new regulations will decrease giving and increase income inequality, others are more optimistic citing the “golden age of giving” as more reason for hope. Although we may not know the exact future of charitable giving, here are four top philanthropy trends to watch for in 2018.
Over the past few years, a new kind of philanthropist has emerged: impact investors. More like angel investors, these philanthropists don’t merely want to write checks for good– they want to grow businesses that do social good. These donors blur the line between investing and giving, and in doing so, hope to create a more caring kind of capitalism where organizations are appraised as much by their social impact as their profits.
The presidential election of 2016 led to a surge in politically-motivated “rage philanthropy” across the political spectrum as parties on each side invested and donated to organizations that reflected and promoted their deepest beliefs. As Americans realized the critical role nonprofits play in important issues, such as homelessness, veterans’ issues, and immigration, the public will likely increasingly continue to use philanthropy as an influential and essential form of civic engagement.
Next Generation Donors
It is anticipated that Millennials and Gen Xers with the capacity for making significant gifts will become the largest generation of philanthropists in history, thanks to innovations changing the industry and new strategies for navigating it.
As demographics in America increasingly shift, the field of philanthropy will need to develop strategies and tools to address new issues and insights adequately. Equity issues such as healthcare access, quality education for all, and far and equal pay wages will remain top priorities.
Over the past several years, giving circles have tripled in number. Giving circles, or individuals (mostly women) who pool their money and decide collectively how it will be donated, will continue to grow in 2018. The Collective Giving Research Group found that giving circles have donated $1.29 billion and engaged more than 150,000 donors. According to the research group, giving circles are an extremely effective philanthropy strategy to democratize and diversify the field, engage new donors, and increase local giving. Four out of five circles focus on local causes, such as human services, education, and women and girls.