Staying ahead of the curve in the charitable giving space is crucial for private, nonprofit and public sector stakeholders alike. Knowing how to reach donors effectively, engage your employee base or perfect the launch for your new capital campaign depends on understanding where, how and for what donations are flowing. As we enter the fall campaign season, here are five trends across the U.S. and the U.K. that are important to consider for greater giving.
1: Demographic differences split US/UK growth paths
Demographic trends provide a key insight into the variations in giving culture in the U.S. and the U.K. In the U.S., Baby Boomers are the most generous generational group, accounting for 41% of all giving at 75% participation. This contrasts with the U.K., where Generation Z and millennials are the most generous. It should also be noted that the U.K. has greater giving and participation parity across all generational groups than the U.S. While no U.K. group has more than 68% participation, the two youngest generations participate in charitable giving over 15% more than their U.S. counterparts. These demographic features present opportunities in both markets. The U.S. has great potential in younger donor engagement. These groups tend to be socially conscious and up-to-date on world affairs. Programs that capture this awareness and offer easy methods of involvement may improve donation statistics among this cohort. In the U.K., tightly clustered demographics call for wide reaching messaging. An effective pitch that resonates across generations will have clearly stated goals and impact and has the potential to maximize campaign returns.
2: Online giving is the future
It should come as no surprise that as banking and financial services become increasingly digitized, charitable giving follows. Online giving accounted for 8.5% ($2.7 billion) of all U.S. charitable contributions. The total volume of online giving in the U.S. has grown 17% since 2016, with social media fundraising exhibiting especially fast growth. The United Kingdom presents similar trends: even as overall charitable giving decreased in 2018 by 4.2%, online giving increased by 5.5%.
Overall, 54% of donors worldwide prefer to give online using a credit or debit card, and these numbers will only increase as physically mailed donations continue to drop, as they have by over 50% since 2010. Secure, swift webpages and mobile integration are key to taking advantage of this new wave and to making it as easy as possible for your supporters to donate to your cause.
3: Donor-advised funds continue to boom
Over the past several years, donor-advised funds (DAFs) have developed into the fastest growing donation mechanism. In 2018, over $19 billion was given through the more than 460,000 U.S. based DAFs, a 194% giving increase from 2013. U.K.-based DAFs have seen a rise too, with a 36% annual increase in total DAF contributions for 2018. These funds provide contributors with a sense of ownership and increased connection to the effects of their donations, while also offering considerable ease of use. One of the most exciting actors in this space is Growfund, a no-minimum donor-advised fund operated by Global Impact, which allows individuals and groups large and small to make contributions toward what they care about most. Comprehending the DAF landscape is necessary for any charitable actor, whether you are seeking funding or wish to see your contributions have maximum impact.
4: Results and innovation drive high net worth donors
High net worth (HNW) donors can drive campaigns to new heights with their large donations, but they also demand a significant and palpable “return on investment.” HNW individuals often carry their business sensibilities into the charitable sphere, displaying a drive to be disruptive, a desire to be hands on, pressure to be a first-mover and early adopter, and results-driven decision making. This entrepreneurial mindset does not, however, ensure that all HNW donations will center around their business field. HNW individuals are most likely to stop contributing to a cause if they lose touch with results or feel that their contributions do not matter. A consistent and meaningful connection to organizational leadership and work is crucial to long-term engagement of HNW donors, and this richer relationship can improve outcomes for all parties.
5: International causes show growth potential
In an increasingly interconnected world, a greater awareness of the struggles and needs of individuals beyond one’s own borders is increasing. This heightened awareness is evident in giving trends in both the U.S. and the U.K. In 2018, U.S. gifts to international affairs grew the most of any charitable sector, accounting for 5% of all giving ($22.8 billion). In the U.K., although international donations decreased in 2018, this total reflects a decrease in the total amount of major international disasters from the previous year, such as the severe earthquake in Mexico. Passion for international issues is still high, as is giving to related causes. In the U.S., religious organizations, education, and human services are the most popular donation areas. The widespread interest in these vectors can be harnessed through their deep intersectionality with international causes. Similar opportunities exist in the U.K., where religious organizations, overseas aid and medical research are the most popular donation areas. Proper messaging and demonstration of impact can mobilize donors to act on their exiting interests internationally or present opportunities for partnerships to be formed between organizations with the same interest areas and causes but different geographic targets.
In the U.S. and the U.K., taking advantage of technology, clearly demonstrating the value of all contributions and demonstrating intersectionality are the keys to making the most of the coming campaign season. As donor-advised funds continue to become more prominent in both nations, organizations that are able to demonstrate their effectiveness, efficiency and crosscutting values will be able to access significant new pools of resources. Global Impact is constantly analyzing past programs and the newest research to create tailored solutions that empower our clients to achieve their goals. Learn more about how Global Impact can help maximize your fundraising.