Current and future trends in the charitable sector, both large and small, are deeply reflective of American society. After all, what happens in the world and in our country greatly affects the behavior of donors, which impacts non-profits. Political and societal trends, which include economic inequality, mounting populism, ideological polarization and shifting demographics will all play a part in influencing trends in philanthropy over the next year and beyond. While it is difficult to offer any confident prediction of which way things will go, it’s useful to understand the possibilities.
Trend: Big Philanthropy Increases
With a small number of influential and high profile billionaires pledging to give away their fortunes, there exists the possibility that others will follow suit. Indeed, the average age of the members of the Forbes 400 list is 67. As these billionaires begin to see the sunset on the horizon, they may act with a greater sense of urgency in disposing of their assets.
Trend: Small Philanthropy Decreases
Ordinary Americans—once a cornerstone of small giving, continue to be pressed with chronic financial insecurity. With 40% of Americans reporting an inability to fund a $400 emergency, it is easy to understand the decline in small donors. Also, with the changes in federal tax law initiated in 2018, there is less financial motivation to make donations. While efforts to reverse income inequality could change the direction of this trend, it’s difficult to see it changing course any time soon.
Trend: Government Resources Wane
Enormous debt, growing populism and public distrust can all contribute to a decline in big government. There’s a good chance surging entitlement and pension costs will supersede spending on any other federal, state and local budget priorities. As funding for new initiatives wanes, further privatization of problem-solving is likely.
Trend: Politicization of Giving will intensify
The use of tax-deductible gifts to influence public policy and electoral outcomes has been well underway since the 2016 election and is sure to continue. Subsequently, increasing numbers of non-profit organizations are creating the accounting mechanisms so they may engage in electoral activities. As benefactors are holding an oversized influence over the government, the backlash against “philantocracy” will grow.
No one trend stands out as an apparent front runner. 2020 is likely to see a combination of a few, if not all, of these trends.