New Report: Philanthropy Outlook

The experts at the Indiana University Lilly School of Philanthropy have released The Philanthropy Outlook 2015 & 2016, a new report using a solid economic research methodology to predict how giving will grow and change in the coming two years.

The report is a great application of complex financial prediction models to the flow of charitable giving.

A few main points:

• The report predicts that total giving will increase by 4.8% in 2015 and by 4.9% in 2016. This is an acceleration of growth compared to what we’ve experienced so far coming out of the recession.
• Between 2015 and 2016, household giving will decline slightly as a total share of giving, with estates and foundations showing more growth. This follows what fundraisers have been hearing about greater foundation spending and distribution of wealth from the Baby Boom generation.
• The report predicts that corporate giving will increase by 6.0% in 2015 and 4.8% in 2016.

The report is a good reminder that broader economic forces will weigh heavily on the willingness of individuals to give and will significantly affect corporations and foundations.

For frontline fundraisers, there is an interesting discussion in the report of giving by those who itemize on taxes vs. non-itemizers. The prediction is that non-itemizers will represent less of total giving in the coming years than they have historically. Itemized giving is predicted to increase by 6%, about 50% more of an increase than the expectation for all household giving. This prediction is driven by projections of asset growth. This is a good reminder to make sure you get those tax receipts out on time, make sure your tax benefit language is clear, and also have a plan to engage donors who are less likely to itemize.

This report is based on very broad trends, including the forces in markets, world GPD and asset growth. The analysis includes broad factors such as prior growth in the stock market indexes, data on personal incomes, and household net worth. If these factors change unexpectedly, the results for giving could be significant.

Overall, the report tells us that “the nonprofit sector appears to be continuing on the road to recovery.”

That’s good news for all of us.

You can grab a copy of the report online and read more about the predictions and methodology.

The sponsor of the report, Marts and Lundy, will host a free webinar about the Philanthropy Outlook on April 23, and registration is available online.