Tue, 04 May 2021 | charitable giving
A major shift is underway in how people give, the tools they use and even what motivates them, according to a new report by Fidelity Charitable® based on a survey of nearly 4,000 philanthropic individuals who gave at least $1,000 to charity in the previous year. The shift has tremendous implications for nonprofits that depend on the more than $450 billion donated to charity each year, but also has the potential to shape American society much more broadly. The pandemic accelerated existing trends, increasing the use of digital giving tools and driving a shift in the causes donors see as most important.
“Charitable giving is quickly becoming charitable living, impacting not just the nonprofit sector, but the way we work, play and invest more broadly,” said Pamela Norley, president of Fidelity Charitable. “There is an entirely new mindset among younger generations shaping what it means to give back. Three-in-four Millennials consider themselves philanthropists, regardless of how much they give, compared to only one-in-three Boomers.”
Donors are embracing a new definition of philanthropy. Rather than simply giving money to charities, donors increasingly prioritize social good in everyday decision-making.
Largely driven by generational change, these trends could become more mainstream as younger donors come to control a larger share of wealth. Millennials are more likely than older generations to use newer methods of giving back. In fact, two-thirds of Millennials have purchased products from a socially responsible business, while 43 percent have made an impact investment and 87 percent said it’s important to work for a company engaged in corporate social responsibility.
These behaviors are shaped by a more modern mindset that applies the term “philanthropist” to anyone working to make the world a better place. Seventy-four percent of Millennials describe themselves as philanthropists—compared to only 35 percent of Baby Boomers and 48 percent of Gen X.
The future of philanthropy after a tumultuous 2020
Digital acceleration: Even before the pandemic, nearly 40 percent of donors donated to individuals through an online giving platform like GoFundMe, and a quarter donated through a social media platform. And as our lives became increasingly virtual due to the COVID-19 crisis, donors turned to digital tools to engage in philanthropy. Nearly six-in-ten donors donated on a charity’s website in 2020, and 18 percent said they did this more often.
Priority shift: Donors believe that the most important challenges for society to solve relate to basic human needs. In 2021, 40 percent of donors ranked hunger as one of the top three challenges facing the world—up from 34 percent before the pandemic. While donors already considered hunger our greatest challenge before the pandemic, widespread food insecurity made the issue an even greater concern. Access to basic health services came in second among donors’ biggest priorities—with 31 percent of donors ranking the issue in the top three.
With social injustice in the spotlight, the number of donors who listed racial discrimination as one of the top three challenges facing the world nearly doubled. In 2021, 16 percent of donors ranked the issue as a top challenge, compared to only 9 percent in 2020.
Optimism problems can be solved: Donors overall reported only tepid optimism—with 57 percent saying that they are somewhat optimistic and one-in-five saying they are not at all optimistic. Younger donors, though, showed more confidence. More than 40 percent of Millennials said they are very optimistic, compared to only 15 percent of Baby Boomers and 22 percent of Gen X.
To read the full report, visit: The Future of Philanthropy
Methodology: Artemis Strategy Group, an independent research firm, conducted a research study on behalf of Fidelity Charitable about donor motivations and behaviors. 3,055 adults in the U.S. who donated at least $1,000 to charity in 2019 were surveyed in March 2020. A follow-up January 2021 survey among 830 philanthropic individuals in the U.S. who donated at least $1,000 to charity in 2020 detected shifts in donor thinking due to the events of that year.
Source: Fidelity Charitable