Giving Compass' Take: 

• Nonprofit Quarterly examines data from Giving USA 2018 that shows how lower- and middle-income household charitable giving has declined (despite growth in giving overall), lamenting that it hurts philanthropy.

• Diversity in demographics is needed, and one suggestion here is to create a tax incentive for smaller donors. Would this help reverse a trend? What other opportunities are there?

• Read about five steps to boost charitable giving.

Research on giving in the United States has now produced definitive empirical evidence to show a decline in the participation and amounts donated by “small” and “medium” (actually, median) donors and an increasing reliance on “large” donors. That lead sentence should make every reader stop and envision the future of philanthropy in our democracy. The data presented below will demonstrate that there are two seemingly unrelated trends that are both affecting the nature of how America gives.

The growth in total giving and total giving by households is to be chronicled and celebrated; however, while I do not share the antipathy expressed by some toward large gifts from wealthy and high-income donors, I am concerned about the causes and the effects of the loss of gifts from lower- and middle-income households. This makes our philanthropic sector less vibrant as well as less reflective of our overall society, thereby diminishing our civil discourse and civil society generally.

But there is one policy proposal that would likely attenuate the decline of the small donor: reinstate the universal charitable deduction for all households, regardless of whether or not they itemize deductions, which would provide incentives to all to give and reinforce our philanthropic values in the tax code — for one and all, regardless of income level.

Read the full article about the decline of small- and medium-sized donors by Patrick M. Rooney at Nonprofit Quarterly.