American donors are changing their approach to charitable giving and their views on how to solve a wide range of global challenges, Fidelity Charitable reported in a study released Wednesday.
“What we see in this study is a significant shift in the way people think about their giving—with changes that will pick up speed as the giving power of millennials increases in the years ahead,” Pamela Norley, president of Fidelity Charitable, said in a statement.
The report was based on a 2016 survey conducted by Artemis Strategy Group among 3,254 adults in the U.S. who had donated to charities and claimed itemized charitable deductions on their 2015 tax returns.
A Giving USA study released in June reported that Americans donated a record $373 billion in 2015. “The vast majority of Americans give to charity,” Norley said.
Priorities and Solutions
Donors in the Fidelity survey identified a wide range of pressing issues, including these top priorities:
- Developing treatment or cure for a disease: 39%
- Hunger and access to nutritious foods: 38%
- Access to basic health services: 33%
- Protecting and preserving the environment: 29%
- Access to quality basic education: 26%
At the same time, they thought solutions to these problems lay beyond just investment in traditional nonprofits. Only 17% of respondents said they were “strongly optimistic” that giving alone would lead to fixes for the issues they most cared about, while 77% were “somewhat optimistic.”
Thirty-nine percent of respondents said nonprofits had the potential to develop solutions and create necessary change, but they also looked farther afield: 36% to public-private partnerships, 33% to individuals, 32% to religious institutions, 26% to universities, 26% to business and 24% to social enterprises. Only 19% cited government.
Forty-five percent of donors said business should do more to fund solutions, and 43% said individuals/philanthropy should do so.
“Donors give for a variety of reasons, some of which are deeply personal,” Norley said. “However, to tackle the issues they care about, they increasingly believe in the need to have all hands on deck.”
Giving Approaches Reshaped
Philanthropy has changed rapidly over the past two decades, with 60% of donors in the survey citing at least one way that their giving has shifted.
For one, they are more results focused: 41% said they had changed their giving owing to increased knowledge about nonprofit effectiveness, such as information about the programs and organizations producing the best results.
Twenty-seven percent of respondents said technological advances had changed their giving by providing convenient tools to research, find and fund organizations. About a fifth said their giving had been affected by changing views on generational wealth, such as people choosing to give a higher proportion of their wealth away instead of passing it along to the next generation.
Eighteen percent said expanded access to and awareness of financial planning strategies, including donor-advised funds and donations of appreciated stocks, could help individuals give more to charity.
Both baby boomers and millennials in the study agreed on the challenges society should address, giving priority to health and hunger issues, but the similarities stopped there.
For instance, 47% of millennials were equally concerned about domestic and international issues, compared with 36% of boomers.
In addition, millennials were more than twice likely, compared with boomers, to adopt technology, embrace a social approach to donations and view giving more broadly than simply giving to charity.
Thirty-two percent of millennials said they had tried alternative forms of giving, such as choosing to buy from a company with a social mission or investing for social impact, compared with 14% of their older counterparts.
“As we look to the future, all of these trends point to donors becoming more hands-on with their giving, not less,” Norley said. “Americans will continue to prioritize giving and integrate their approach to philanthropy even more fully into their daily lives.”
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