As we rapidly move into the new year, there are three things that I’ve been thinking about that I think every fundraiser should keep their eye on in 2018. In no particular order…
- The continued push for a universal charitable tax deduction
At the end of last year, Congress passed, and the President signed into law, tax reform legislation that is the most significant in three decades. As part of this legislation, Congress left untouched the charitable tax deduction… but nearly doubled the standard deduction for both individuals and families.
The raising of the standard deduction is estimated to reduce the percentage of itemizers from 33% of taxpayers to 5% of taxpayers. The implications for charitable giving are uncertain at this point, but the Lilly Family School of Philanthropy estimates that it could cost as much as $13 billion in donations.
With this concern at heart, the Charitable Giving Coalition worked hard to have Congress adopt a universal charitable deduction that all taxpayers could take off the top of their taxes. The thinking is simply this: A donation to charity is giving away income that never benefits the earner, so it should not be taxed.
Such a proposal was not adopted and, as a result, the charitable tax deduction remains available only to those who itemize their tax returns, which will now shrink dramatically. Over the coming months, the Charitable Giving Coalition will continue to work with Congress to try to gain ground on the universal charitable deduction to stimulate increased giving to the charitable sector.
- The growth of the stock market
As Giving USA has continually demonstrated in its annual report, the stock market is a leading indicator of philanthropy in America. The S&P 500 climbed 21.83% in 2017 and the Dow Jones 28.11%. And when the reports are written on giving in 2017, I’m betting it will be another record year for philanthropy.
So what does this mean for 2018? As I write this today, the impact of the 2017 tax reform seems to be spurring along the continued surge of the stock market and increased business investment. If this trend continues, it could foretell of a banner year for philanthropy in spite of concerns over the decrease in the percentage of Americans that itemize their deductions.
- The impact of the social and digital worlds on fundraising
Charitable organizations have had to come to grips with the reality of the social and digital worlds and their relationship to fundraising, as this is where constituents and donors live. Nielson reports that adults 35-49 spend nearly 7 hours a week on social media networks (nearly an hour a day), and those 50+ spend over 4 hours a week. In addition, according to our study of generational giving, 92% of donors own a smartphone or tablet and 60% have given an online gift.
This is the world of the donor. So what are some trends for you to be looking for in this world? Here’s what I think:
- More donors desiring to give online. With the smartphone and tablet becoming ubiquitous and living under the Amazon effect (one-click shopping) more donors will want to make their donations online. The only question is how well you facilitate this transaction!
- Increased role of Facebook as a fundraising tool. Now that Facebook has eliminated any fee associated with a gift through their portal, you can definitely expect this type of giving to increase.
- Simpler giving through digital wallets like ApplePay. While this hasn’t taken off yet, don’t be surprised by this as consumers increasingly use digital wallets for financial transactions.
- Artificial Intelligence as a tool for donor engagement. Charities are beginning to tap into this already with Messenger Bots on Facebook. That’s just the first step of leveraging AI for donor engagement and cultivation.
Obviously, no one knows the future. But based on where things sit in the fundraising landscape today, my hunch is that you’d do well to be mindful of these trends as you consider your fundraising efforts for 2018.