Will the Real Philanthropists Please Stand Up?
Tomorrow, November 15th is National Philanthropy Day, and is the start of the “season of giving” (over 30% of annual giving occurs between now and December 31st.) National Philanthropy Day was originally conceived of, and organized by Douglas Freeman in the 1980’s then was officially recognized as a national day by President Ronald Reagan in 1986. In Reagan’s proclamation he talks about the strong American history of philanthropy, and calls to action the American people.
“The literal meaning of ‘philanthropy’ is ‘affection for mankind.’ Throughout our history, we Americans have displayed this trait through our generous charitable giving and our spirit of neighbor helping neighbor. We help each other, and we reach out to help people all over the world… I call on the American people and organizations of every kind to observe this day with appropriate ceremonies and activities to recognize the enormous achievements of all who have given of themselves for others, and to rededicate ourselves to the great tasks ahead.”
Since 1986 the nonprofit sector has grown from 800,000 organizations to over 1.5 Million organizations. We have steadily increased our overall giving, in the US it has risen with or slightly above the inflation rate, bringing 2021’s total giving to $484.85 Billion in 2021, impressive considering the total amount of charitable giving in 1986 was $83.9 Billion
However, over the last two decades we have developed an over-reliance on “big philanthropy.” The overall percentage of Americans giving to charities has been falling steadily for about 15 years. In 2021 only 56% of Americans reported making any donation. A shocking 30% of all charitable donations in the last year came from the top half of one percent (0.005%) of donors according to the Paul Schervish Center on Wealth and Philanthropy.
There are many reasons why donor acquisition numbers and retention numbers are dropping, but it’s not helping the general public’s sense of service to hear about multi-million and billion-dollar grants and gifts. These gifts happen sparingly, they are given to few organizations, and they are not a reliable long-term strategy for sustained success, WE ARE. In fact, despite a large share of the country’s richest individuals taking “The Giving Pledge,” Forbes gave the lowest ever philanthropy score to the 400 richest Americans based on their “out the door” giving as a percentage of net worth.
Philanthropy has gone from “affection for mankind” to carrying a connotation that implies extreme wealth, black tie affairs, tax loopholes and public image manipulation. Now, it is even beginning to look like we can’t count on the ultra-wealthy to fulfill their giving pledge either. On this National Philanthropy Day, I would encourage all of us to reclaim the philanthropic mantle and be the donors the sector needs for the future, ones that are consistent, reliable, informed, caring and motivated by altruism, not by image or tax-savings or ego.
