A new report predicts that total charitable giving will increase by 3.4% in 2019 and by 4.1% in 2020, rising above the historical 10-, 25- and 40-year annualized average rates of growth.
Marts & Lundy, a strategic management consulting firm, presented the report, which was researched and written by the Indiana University Lilly Family School of Philanthropy.
“A multitude of factors are influencing the prospects for charitable giving in 2019 and 2020, including the macroeconomic climate, the potential for the current government shutdown to affect the economy, stock market volatility and donors’ responses to the 2017 tax policy changes,” Una Osili, associate dean for research and international programs at the school, said in a statement released Friday.
“Although no one can know exactly how the interaction of these factors will impact giving in the next two years, The Philanthropy Outlook includes measures to account for their potential effects.”
Philippe Hills, president and CEO of Marts & Lundy, noted that giving over the next two years was predicted to grow even in the wake of changes to the tax code.
“However, it is still too soon to determine exactly how the recent tax changes may impact future donor decisions, and nonprofits need to be mindful of its potential impact, as well as the impact of other economic and policy factors put forth in The Philanthropy Outlook,” Hills said.
The report predicted that giving by individuals would grow by 2.1% and 3.4% in 2019 and 2020, slower than the rate of growth for total giving. Corporations, too, will lag total giving, growing by 3.2% and 2.6% over the next two years.
In contrast, giving by foundations and estates will experience strong growth: 7% and 5.4% in 2019, and 6.1% and 5.6% in 2020.
Researchers looked at three recipient subsectors. They predicted that giving to education and to health — the types of nonprofits that have traditionally been associated with high-net-worth donations — would grow in 2019 and 2020: education by 3.5% and 5.7%, and health by 5.2% and 4.4%.