Philanthropy in 2011: DAFs Surge, Online Giving Grows and Gender Factors Come Into Focus

Volunteerism increases because of economic and generational factors

Over the past year, we have observed and reported on a number of interesting trends in philanthropy, from strategies for giving to the effects of gender differences. Several of these trends will continue into the new year.

Donor-advised funds (DAFs), which have enjoyed robust growth in recent years, now outnumber private foundations by more than two to one. Assuming the economy will continue to improve in the coming year, DAFs should make significant gains in assets, grants, contributions and new accounts, according to the 2010 Donor-Advised Fund Report by National Philanthropic Trust.

It’s easy to account for DAFs’ rapid growth. More and more people are becoming aware that these vehicles not only offer important tax benefits but also are easy to set up with no cost for doing so. Ultra wealthy individuals and families in particular, for whom privacy is essential, are showing increased interest in DAFs for the additional reason that they allow donors to support charitable causes anonymously.

Nonprofit organizations have seen an uptick in volunteerism over the past two years, and this is likely to continue well into the future. Three factors appear to account for the recent increase in volunteerism, according to the 2010 Bank of American Merrill Lynch Study of High Net Worth Philanthropy. One, people who are feeling financially constrained are showing their support in other ways. Two, skilled unemployed or underemployed people are participating in the nonprofit sector when private sectors jobs are not available. And three, baby boomers who are retiring at increasing rates are offering their talents and energy to nonprofit groups.

As the economy improves, contributing with dollars rather than service may again become the norm for a large segment of donors. However, it is likely that many women and men in the growing ranks of new retirees will continue to look to nonprofits as a focal point to organize their leisure time.

In October, we reported on one initiative that would likely appeal to some more adventurous volunteers: Relief Riders Internationalwhich was honored with a 2010 United Nations NGO (Non-Governmental Organization) Positive Peace Award.

Watch for an increased research focus on the role of women in philanthropy. Researchers are beginning to look closely at gender differences in giving and the causes women support. New studies by the Women’s Philanthropy Institute at Indiana University’s Center on Philanthropy show that women are likelier than men to give to nearly every type of charitable cause and equally likely to support the rest.

In order to identify the effects of gender on charitable giving, the Indiana University researchers analyzed giving by households headed by single people. Previous studies had trouble identifying these effects because they relied on data from households and married couples. Future gender-focused studies will help in understanding why women are more likely to support certain types of nonprofit organizations.

Online giving is gaining traction among the charitably inclined and will continue to do so, but nonprofits that make the effort to provide charity-branded giving pages stand to gain most from online donors. The reason is simple: Just as the donor-charity relationship strongly influences offline giving, so the online experience significantly affects donor loyalty, retention and gift levels, according to a study by Network for Good and TrueSense Marketing.

Donors respond much less generously to generic giving portals and add little after their initial contribution. The study noted that recurring giving is a big driver of giving over time and should be strongly encouraged.

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