Six years out from the 2008 market crash, most people have recovered sufficient income and confidence to give generously once again.
But the post-recession philanthropist is driven less by emotional impulse and more by practical thinking. Today’s donors increasingly look for more bang for their buck, emphasize impact over personal glory, and make charitable giving decisions as strategic components of their overall financial planning.
Thinking outside the checkbook
While most donors are back to giving at normal levels, many are being more cautious with cash and considering their complete assets as possible sources for funding their charitable giving.
Nationwide, more donors are giving real estate, mutual funds, insurance policies, IRA funds, closely held stock, and art. More are working with community foundations and other advisers to maximize the impact of their gift dollars.
Impact through collaboration
Along the same lines, donors small and large—including the Delaware Community Foundation, the Longwood Foundation and other local foundations—are increasing their efficiency and impact through collaborations.
Donors correctly observe that Delaware, like the rest of the world, has many nonprofits with overlapping missions, performing many similar activities. Like for-profit organizations, nonprofits often can be “more efficient” when they merge or partner.
Also, many donors are focused on long-term solutions of multifaceted, systemic problems, in addition to addressing urgent needs. For example, a single agency can shelter homeless people, but to actually reduce homelessness, we need collaborations among many partners to target its many root causes, including poverty, domestic abuse and addiction.
Many donors also are sacrificing personal recognition to increase their impact. Rather than give $500 to have the family name on a plaque, modern donors often opt to give to high-impact communal funds like the Fund for Women or the DCF’s community-needs fund.
Giving as part of financial planning
As part of the new, more thoughtful approach, many donors are now treating charitable giving like any other financial decision and wisely including it in their financial planning.
Interestingly, today’s sophisticated donors are asking their financial advisers—often in partnership with the DCF—to help them use immediate and planned giving strategically, as a tool for making their charitable giving as impactful and long-lasting as possible.
This is great news for both donors and grant seekers because donors often find they’re able to take advantage of favorable tax regulations and various charitable giving vehicles to make larger gifts than they realized.
In Delaware and around the nation, 2015 will be the Year of Planned Giving. As the youngest baby boomers turned 68 in 2014, it makes sense that planned giving is already on the rise and will continue to be strong for at least the next 20 years.
That’s excellent news for the nonprofit sector. Not only do America’s 76.4 million baby boomers—including almost a third of Delaware’s adult population—control 70 percent of disposable income in the United States, but they’re also the most generous of all generations, giving more than $47 billion to charitable causes each year.
Donors, nonprofits and the whole community will benefit from maintaining this focus on efficient, effective charitable giving. While many organizations lack the in-house capacity to manage legacy and other complex gifts, the DCF is a community resource that facilitates those types of transactions.
(Fred C. Sears II is president and CEO of Delaware Community Foundation.)