Last year, charitable donations made to the nation’s largest nonprofits grew by 11%, surpassing giving to the charitable world as a whole by a substantial margin. Fundraisers wonder whether these gains will continue and whether potential threats to the economy and political uncertainty could slow down future giving.
The cash and stock donations raised by the top 100 organizations of America’s Favorite Charities, nonprofits that raise the most in cash support, represents about 8.7 percent of all donations made last year, as tracked by the annual “Giving USA” report. That is a noticeable figure given that they are only a small fraction of the more than 1.5 million registered nonprofits.
The powerful showing by the nation’s largest groups underscores the ever-growing gap between the big-name charities and all others. These bigger nonprofits — many of which rely strongly on the ultrawealthy — are raising money in a very different fundraising landscape than smaller charitable groups. When the 2018 “Giving USA” estimate of all contributions was adjusted for inflation, the finding was an unusual 1.7% drop — the 13th decline in overall giving in the past four decades.
Since the most recent recession, the wealthy keep getting wealthier and the organizations whose business models are finely tuned towards high-net-worth philanthropy are the ones that are doing the best.
But even the largest groups that have raised millions and even billions in donations have formidable competition in the race for charitable contributions: commercial donor-advised funds.
Fidelity Charitable took in more than $9 billion last year, nearly triple the $3 billion United Way Worldwide raised. The donor-advised-fund giant brought in more contributions in 2018 than the next top five nonprofits combined.
Charitable to the top 10 organizations in our ranking are up more than 17 percent, but as with the other 90 groups, that growth is uneven. Two of those top 10 nonprofits saw giving decline, while the rest saw an increase.
Donations to the American Red Cross, another top favorite, shot up by nearly 158% as donors gave very generously to aid the victims of Hurricanes Harvey, Irma, and Maria, which struck during the group’s 2018 fiscal year. When large, visible disasters occur, the American people continuously step up with generosity. That largess continued with the devastating California wildfires also in 2018.
The United Way Worldwide held on to the top spot in the rankings, the charity reportedly took in 6.8% less in cash support than it did the previous year. This continues a downward trend over the years for the organization as a whole, mostly due to the decline in workplace giving campaigns.
One reason the largest nonprofits are doing so well is that they have focused their efforts solely on the top donors — those who have gained the most as the wealth inequality has grown. In recent years, large donors have made up for big losses in giving from middle-class citizens, whose household income has been mostly flat, leaving them with less and less discretionary income. While higher education and health-care organizations have focused on winning big donations, groups such as the Boys & Girls Clubs of America that are devoted to other various causes are also increasingly turning to the ultrawealthy to meet their mission goals.
One reason that the ultrawealthy are still good prospects is that they are unlikely to face the loss of charitable deductions as a motivation to give because of the tax law established at the end of 2017. Though the figures in the current rankings are the first to show the impact of the new tax law, nonprofits are still unsure how much difference it made. A significant change came from the drop in the number of people who itemized on taxes and therefore had access to the deduction. Last year the individuals who claimed charitable deductions on their taxes fell to 8.5%, which is from the 24% recorded in 2017.
Some organizations, like the Giving Center, that raise money by reaching out to all kinds of different donors are left to promote charitable donations from citizens who are more involved with ideals on their local community scale.
Fundraisers are working hard to figure out how to keep donors giving at a steady clip.
