The Chronicle of Philanthropy published an article this week about the Generosity Commission, a $3.8 million bipartisan commission from the nation’s biggest foundations. The commission’s purpose is simple: to investigate why giving has declined and to spur more generosity among middle- and low-income individuals.
If you’re anything like me, you just blinked a few times at your computer screen, furrowed your brow, and launched yourself out of the closest window. However, if you read that and nodded along, pleased at the hardworking CEOs trying to get to bottom of this puzzler, I assure you that you will not enjoy this blog post.
I will begin this by saying I am not a researcher, doctor, or otherwise notable in any way. I have, however, spent my entire career in the nonprofit sector. I routinely work with directly impacted people. And I’m a person who has, from time to time, read the news. I would like to humbly provide my suggestions for why charitable donations may have dropped to an all-time low, to just 50 percent of people give to 501(c)(3)s, according to the aforementioned article.
Giving is declining because Americans are poorer than they’ve ever been
We’re seeing the worst income inequality in this country since before the Great Depression. In pretty much every data point you can imagine, rich people are better off than they’ve been in a century and poorer people are seeing a respective, and steep, decline. The latest data from the Federal Reserve shows that the top 1% has more wealth than the middle 60% of income distribution.
A recent study from Harvard reports that 40% of U.S. households say they faced financial difficulties during the pandemic with 30% reporting their finances are worse than they were before the pandemic.
I won’t write much more on this point, as it’s been documented in more ways than I can enumerate.
I promise the Generosity Commission that this is deeply affecting charitable giving, whether you want to believe it or not.
Giving is declining because you’re ignoring political donations
Political donations have seen a steady increase, especially with local races. Though there are serious problems with the way donations to politicians, and we desperately need more transparency, there has been an undeniable uptick in political donations that are not tracked as “charitable.”
If you’re unfamiliar with the specifics, here is how it goes. Nonprofits can get the 501(c)(3) designation in order to collect those delicious tax-deductible donations we all get those receipts for in January. In return for getting tax-exempt status, you have to do all sorts of things, including not endorsing political candidates or do “a substantial amount” of lobbying.
This has led to the creation of many 501(c)(4)s, whose donations are NOT tax deductible, and in turn can do virtually unlimited lobbying.
The number of political organizations have increased, as has the cost of our elections. The 2020 election, for example, cost $14 billion, over twice the amount that 2016 cost.
Again, I’m not saying this is great news. I’m just saying that our tax code has decided what is charitable and what is not, when donors themselves may not be making such a distinction.
Giving is declining because you’re ignoring peer fundraising
If you’ve been on social media for any period of time, you have run across asks for donations from individuals and causes that do not fall under the 501(c)(3) umbrella. Especially in the beginning of the pandemic, when mutual aid programs exploded across the country, many of us donated to causes that were distinctly NOT traditional nonprofits.
GoFundMe has raised $9 billion from 2010-2020. The donors to GoFundMe campaigns tend to be solidly low-income or middle-class, giving to friends of friends for everything from veterinary costs, to medical debt, to top surgery. None of these donations are tax deductible, and many people, especially younger folks, tend to not care.
So, what other data will the Generosity Commission find?
Before the pandemic, these individuals would be meeting in beautiful conference rooms overlooking city skylines, discussing the issue that poor people simply do not want to part with their money. Now, they’re likely in Zoom calls, discussing the issue that poor people simply do not want to part with their money.
They will hire a consulting firm for hundreds of thousands of dollars to conduct surveys and focus groups. Their findings about declines in giving will align with their current assertions, such as this one quoted in the article:
“The current concentration of giving among the ultra-wealthy and declines in volunteering are cause for concern, said Wales (Jane Wales, Vice president for philanthropy and society, Aspen Institute), because they suggest that many people feel their contributions wouldn’t make a difference. Declines in giving may also be a symptom of a disengaged and battered electorate.”
With this quote, Wales is attributing the decline in giving to one simple reason: lack of personal will. The article even goes on to postulate potential awareness campaigns for commission, including, “high-profile efforts to spread the word about its work, like advertising at major sporting events or on popular television shows.”
This Commission does not seek to change the structures that have made GoFundMe our most reliable healthcare system. It will lay the responsibility of the decline in giving upon the shoulders of the inattentive and disengaged donor, ultimately blaming the ineffective fundraiser.
As a result, one of their conclusions will ask nonprofits to do more to engage and thank donors. It will highlight a story or two where donors were framed as heroes and were inspired to give even more.
The final deliverable will be a PDF report or an interactive website. The design will be beautiful and modern, featuring high-resolution photos of people of color and maybe someone with a physical disability. The event launching the report will have passed hors d’oeuvres.
And then we will move on.
The Generosity Commission is just the latest splashy, out-of-touch thinking to come out of Big Philanthropy. The commission is largely led by CEOs of large foundations, most of whom likely make a salary well above $300,000 (data pulled from most recent 990s of Commission member organizations.) This is very close to the top 1% of all personal income in the US.
These individuals will not ask the tough questions, especially the one that questions why there are no poor people in the room. They won’t ask why they are catering to conservative leaders. They won’t ask why interpretation isn’t included in their workplan.
They won’t ask, because in the end, they don’t want to think about why giving has decreased. They want to enjoy their four weeks of paid vacation, their paid sick and parental leave. They want to watch their 401(3)(b) increase, considering what they’ll get up to when they retire.
This commission proves what most in the nonprofit sector know: few in philanthropy are less qualified to study patterns of giving than the ultrawealthy and ultra-secure.
When we talk about the Nonprofit Hunger Games, we focus on the players in the arena.
This Commission is the viewers in the Capitol.