Wealthy should give more to charity, people who stopped donating say

The survey of more than 2,100 adults across the United States, released by the Better Business Bureau’s Give.org, adds to research on the shrinking number of households that contribute to charity each year, dropping from 66% in 2000 to 49.6% in 2018. The impact of the decline became even more clear when a Giving USA report revealed donations from individuals dropped by 13.4% after inflation and led to one of the steepest declines in contributions in recent decades.

Art Taylor, CEO of BBB’s Give.org, says that many nonprofits have attracted wealthy donors to their causes, and that is turning off people of more modest means who don’t think their gifts are needed.

Taylor says he worries about that trend because he says an overreliance on affluent givers can leave nonprofits vulnerable to the interests of a few powerful people versus a community of supporters.

“Large numbers of small gifts give charities independence,” he says.

Middle- and upper-income Americans were especially likely to point toward superwealthy donors for their decision not to donate. More than 59% of those surveyed with household incomes above $70,000 believe that wealthier people should drive donations, compared with 47% of households over all. Over 55% of those who stopped giving say they don’t earn enough to afford donating to charity.

• Older generations were more likely to have donated over the past five years, with 72% of respondents age 76 and above maintaining or increasing their contributions, compared with 67% of boomers, 57% of Gen Xers, 57% of millennials, and 42% of Gen Zers.
• Respondents who stopped contributing to charities were less likely than those who maintained their contributions to believe that donating to nonprofits was more effective than shopping at socially responsible businesses, with only one in four saying that donating had a stronger impact. Among Gen Zers, 52% said shopping at responsible businesses had the same or greater impact.
• Participants who stopped donating to charities over the past five years said they were most likely to increase future contributions if it was easier to find charities serving their community (17.6%) or led by people who share their political identity (17.6%).

While the report doesn’t offer a one-size-fits-all solution for charities to tap more everyday donors, the youngest Americans surveyed said a major obstacle to contributing to charities is simple: They aren’t being asked.

More than 45% of Gen Zers said they haven’t been asked to donate, compared with 3.8% of boomers. When it comes to younger donors, “we have to learn how to reach them where they are rather than hope that they will come to us,” says Elvia Castro, associate director of charity evaluation at Give.org, and lead author of the report.

The millennials and Gen Zers surveyed were far more likely than older generations to trust newer solicitation channels, such as social media, crowdfunding sites, and giving circles. They’re also less likely to engage in traditional drivers of small donations, including religious and workplace giving, which declined 10% from 2016 to 2018.

“Charities are trained to spend as little as they can on fundraising — that means they go after the big money,” says Taylor, who acknowledged trying newer fundraising methods might be difficult for nonprofits with established practices. But he said investing in them would pay off in the long run, and it might be time to discontinue old approaches.

“We have to look at some of the engines that powered small donations for lots of people and ask ourselves if those engines are still as effective,” he says.

Americans’ trust in the charities soliciting them also plays a role in their decision to donate, according to the report. Beyond financial concerns, those who stopped or decreased their contributions over the past five years pointed to concerns about transparency and how their donations were being used.

On the other hand, 72% of people who increased their contributions said it was essential to trust a charity before giving, and one fourth said they would probably donate more if provided additional information about the impact of their contributions.

While financial transparency can bolster gifts and assuage the concerns of skeptical donors, it’s important that fundraisers not be disheartened by statistics on trust in charities, says Jen Shang, co-director of the Institute for Sustainable Philanthropy and an expert in philanthropic psychology.

What’s more, Americans consistently rank trust in charities as higher than trust in government, corporations, and the news media.

According to the report, almost half of Gen Zers who maintained their contributions attribute their support to wanting to be part of something bigger than themselves. Younger generations also want easier ways to identify charities working in their communities and led by people who share their gender, race, political affiliation, and other identity markers.

“If we can grow giving that’s rooted in people’s holistic sense of who they are, it’s going to be more sustainable because it’s rooted in their experience,” says Shang, who noted that identity-based giving can be more reliable than donations driven by bursts of generosity, for example, in the aftermath of a natural disaster.