Giving Compass' Take:
- Here are several philanthropy trends and predictions for their long-term impact on the charitable giving sector.
- What lessons can donors take from the last three years of multiple health, environmental and humanitarian crises?
- Will racial equity be a lasting trend in philanthropy or just a fad?
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Charitable giving has been in the headlines frequently in recent years. Some of the news is welcome, like the outpouring of generosity from donors in response to the Covid-19 pandemic. Some are concerning, like the declining number of American households that give.
Beneath the headlines, there have been important stories about systemic issues we face in our communities. For example, in both the media and the nonprofit sector, we are discussing racial equity and power dynamics with more commitment and transparency. How we embrace and sustain these issues to create lasting change are challenges that are with and before us. The new public discourse—and accountability—is a welcome advancement in solving deeply rooted issues.
As we head into the new year, here are some current trends affecting the charitable sector and my predictions for how they may impact giving in 2023.
- Righting Wrongs
The last three years reinforced what we have long known: Donors respond in times of crisis. The big question and potential challenge for charities now will be whether donors stay committed to the same causes they supported in recent years or whether they will turn their attention to other causes or organizations.
- Moving Past Metrics
Predicting more giving based on emotions has an “equal and opposite reaction”—less giving based on data alone. In the most extreme interpretations, movements like effective altruism (EA) separate donors’ emotions from issues and place a premium on exclusively giving by metrics. I predict EA and other similar philosophies that are overly reliant on data will “regress to the mean” as donors need to employ multiple tools to evaluate which charities and causes are worthy of their support.
- Searching For Stability
In 2022, economic conditions were difficult to predict. While inflation raged, the labor market remained strong, but the stock market had its lowest annual returns in nearly 15 years—a confusing combination. Talk of a looming recession has carried over into 2023. If we are headed for an economic recession, where does that leave charities?
- Donating Cash Amid Confusion
Economic forecasts for 2023 are wide-ranging, but it’s clear that the same uncertainty we saw last year is continuing into this one. Charitable giving is closely tied to the economy. When the economy is confusing, donors are more hesitant to make donations because they may need those assets in the future.
Read the full article about philanthropy trends by Eileen Heisman at Forbes.