Ten trends in ten minutes. Our most popular blog of the year is here!
It’s not hyperbole to say that 2025 will be a pivotal year for the future of American philanthropy. Between the Generosity Crisis, the expiration of 2017 tax provisions, and overall angst and uncertainty, 2025 will be far from normal.
So, let’s get on with our annual predictions—and find some energy and optimism in knowing we can collectively play a starring role in shaping philanthropy’s future.
Trend #1: Generosity...the Crisis Will Continue
The dominant trend of 2025 will be the one we can’t ignore.
You’ve likely heard about the Generosity Crisis—the decades-long decline in philanthropy we’re seeing in the U.S. We’ve overlooked it either because it’s too nebulous or it seems too big to solve.
Here’s why we can’t sweep it under the rug in 2025:
- We’re losing more and more donors each year and failing to cultivate tomorrow’s major donors.
- Our giving pyramids are top-heavy, which makes nonprofits more vulnerable to crises, economic downturn, or the whims of major donors.
- We’re ignoring everyday donors (our future and our bread and butter).
- Societal shifts that impact giving (declining religiosity, social disconnection, fewer volunteers) aren’t getting any better.
- Tax reform will happen in 2025 (more on the TCJA later in this post) and we have a short window to urge lawmakers to permanently restore a charitable deduction.
Trend #2: Nontraditional Giving Will Continue to Bypass the Established System
Although there isn’t a lot of data that shows the true impact of crowdfunding and person-to-person giving, there’s little doubt that its impact on traditional giving is significant.
Younger donors prefer nontraditional giving. A GivingTuesday report found that 76 percent of donors aged 18-34 agreed with the statement, “I prefer to give directly to individuals-in-need, and not via nonprofit organizations, platforms, or websites.” Only 46 percent of respondents over 50 agreed with that statement.
Combined with precarious levels of trust in nonprofits and institutions in general and our hyper-focus on major donors over everyday donors, this trend has significant implications for the future of traditional philanthropy.
Trend #3: Tax Reform and the Push for Charitable Deductions
Thanks to the Tax Cut and Jobs Act (TCJA) that passed in 2017, only 7 percent of Americans have an incentive to itemize their charitable deductions (down from 30 percent before TCJA).
The impact on charitable giving has been devastating.
Because much of the TCJA expires at the end of 2025, there’s a real opportunity to reinstate the charitable deduction for everyone. The opportunity is so big…and so urgent…that our firm is making it one of our biggest priorities in 2025.
According to the Urban-Brookings Tax Policy Center, the percentage of American households donating to charity fell from 66.2 percent in 2000 to 49.6 percent in 2018, the first full year the TCJA was in effect.
“Tax Incentives for Charitable Giving: New Findings from the TCJA,” a working paper drafted by Xiao Han, Daniel M. Hungerman, and Mark Ottoni-Wilhelm and published by the National Bureau of Economic Research, finds that charitable giving has fallen by nearly $20 billion annually as a result of the TCJA.
The chart at right illustrates the gap between actual charitable giving and the projected trajectory had TCJA not been passed.
2025 is our window—our chance to make sure charitable giving incentives are included in tax reform. Many believe Congress will decide on TCJA legislation in the first 100 days of the Trump administration, so it’s important to speak up now.
Spend the next three minutes making the charitable deduction for non-itemizers a reality by:
- Emailing your lawmakers: AFP’s form makes it easy to send a pre-written email to your U.S. Senators and Representative.
- Joining the Charitable Giving Coalition: receive updates and timely calls to action.
(Click to enlarge)
Based on data from “Tax Incentives for Charitable Giving: New Findings from the TCJA” (Han et al., 2024).
Trend #4: Trust in Nonprofits Will Fall Again
Our nation’s political climate will be too fraught with division, and these feelings will bleed over into the nonprofit sectors, poisoning the collective well with mistrust.
The good news is that we can increase the levels of trust. Stay hyper-focused on your mission and communicate the strides you are making. Always be transparent in your communications, even if times are challenging (donors love to solve problems, so give them something to solve.) Let your donors know what their support is accomplishing. Treat donors at all levels like insiders—share new research and discoveries with them or let them know they’re the first to hear about new programming. These simple interactions will go a long way.
Trend #5: Direct Mail May Surprise You
Direct mail is still an effective fundraising tool, especially for younger donors.
The Giving USA Special Report: Giving by Generation found younger generations are more influenced to give by direct mail than Boomers and Gen X.
They will still likely give online, but the motivation comes from the direct mail piece. The report also found that 80 percent of Gen Z donors and 61 percent of millennials would welcome a text from the organizations they support. In 2025, don’t ignore direct mail…make sure it’s a part of your strategy.
Trend #6: Number of Volunteers Will Continue to Stay Flat
If we keep making it hard to volunteer, the total number of volunteers will keep dropping.
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Source: Giving USA Foundation, Giving by Generation
AmeriCorps data shows the volunteer rate fell from 30 percent in 2019 to just 23 percent in 2021—continuing the decline that began in the mid-2000s.
With limited spots and lots of hoops to jump through, those of us in the nonprofit sector put up a lot of barriers to volunteering.
Take my mother, for example. For years, she volunteered at an after-school program where she read with children and helped them learn English. Last year, the organization instituted a background check policy that included fingerprinting. The skin on my 82-year-old mother’s fingers is so worn that it’s impossible to find fingerprints. The organization wouldn’t make an exception for her, so she had to stop volunteering.
It’s understandable that organizations are skeptical of using volunteers. Yes, managing volunteers can be time-consuming and frustrating. But the opportunity to connect someone—a prospective loyal donor—with your mission is worth it.
Trend #7: Talk of Tariffs and the New Administration Will Replace Recession as a Distraction
The economy, or at least our perception of economic health, is always a factor in fundraising discussions.
2025 will be no different, although the economic challenges will look a little different with a new administration and new economic priorities.
Look for talk of tariffs, trade wars, a new presidential administration, and inflation to consume the media (it already is) and our conversations with board members and donors.
Some board members, staff, and even fundraisers will always look for excuses not to fundraise. Savvy development and advancement officers remain focused on the mission, not the economy or politics. They continue to build relationships with their donors, make the case for support, and then communicate the impact of support. They never make assumptions about their donors’ financial situations, but instead approach them with respect and the opportunity to make a difference. If you stop giving your donors opportunities to invest in your mission, you are making decisions for them.
Trend #8: University and Independent School Alumni Engagement Will Be a Bigger Focus
The definition of generosity continues to shift among Americans, particularly those born before 1981.
Because millennials and Gen Z consider giving their time to be just as valuable as giving their money, schools and universities will continue to place a greater emphasis on alumni engagement. Those institutions that actively work to connect alumni in ways that don’t involve a financial gift will see long-term gains.
Sue Cunningham, CASE President and CEO and a panelist on the Giving Institute’s webinar “Reviving Generosity: The Heartbeat of Civil Society,” stressed the importance of early engagement that often begins before a student graduates. She mentioned that CASE’s Circle of Excellence Awards are highlighting institutions with student giving days and other methods that celebrate the connection between student, alumni, and institution.
The chart shown here from the Giving USA Special Report: Giving by Generation reinforces the importance of engaging alumni born after 1981 (millennials and Gen Z). Millennials outgive Gen X; their giving is increasing while giving from those born before 1981 (Gen X and Boomers) is decreasing. Rates of giving from Gen Z are promising.
Trend #9: Donor Anonymity Will Be a Thing
Many donors give anonymously to avoid the limelight.
(Click to enlarge)
Source: Giving USA Foundation, Giving by Generation
Others want to give without being blasted by annoying text asks that often come twice a day.
Between DAF gifts and donations made by so-called stealth donors, nonprofits will have more of a challenge identifying donors who wish to remain anonymous. Online giving options and websites that serve as an intermediary for donors wanting to remain anonymous will make it increasingly more complex.
According to the Chronicle of Philanthropy article, “Getting Anonymous DAF Donations? 7 Things to Do,” not all DAF donors want to remain anonymous. The author suggests occasionally asking DAF sponsors to check whether the identity of the donor was meant to be withheld from the recipient organizations—or merely if the donor wants to avoid public recognition for their gift. Other suggestions include asking the DAF sponsor to forward your thank you letter.
Regardless of anonymity, the article highlights the importance of publicly communicating the impact of donor support. “Assume anonymous donors are watching your organization.”
Trend #10: Organizations with Separate Cultivation and Stewardship Strategies Will Prosper
Advancement and development departments that have separate, robust strategies for both cultivation and stewardship will see gains in 2025.
Organizations that rely on event-based fundraising will have the hardest time because they see events as both stewardship and cultivation (they’re neither).
For years, organizations have struggled to understand the difference between stewardship and cultivation. Often, stewardship positions are among the first to be cut when organizations must reduce their budget. Both are critical for all levels of donors, yet we often lump them together in a big bucket of relationship-building.
Cultivation is about getting to know the donor. Cultivation begins with identifying a prospective donor and then qualifying them to determine the likelihood of investment. It’s about asking questions to determine their philanthropic passions and then demonstrating how your organization solves the problems they care about solving.
Stewardship is what happens after the gift is made. It’s all about showing a donor how you used the money they gave you—how you solved the problems they care about. Stewardship is the best way to combat donor attrition, which is embarrassingly high in the United States.
Our Hope: A Year to Strengthen Connections and Create Change
Like every year, 2025 will bring new challenges we will have to navigate. The effort will be worth it. The power of philanthropy to bring people together to solve common challenges and to celebrate the beauty around us is real.
Right now, philanthropy is struggling. External factors like tax policy, social disconnection, worship patterns, and more are threatening to undo America’s philanthropic legacy. We can’t let that happen.
So, here’s to a 2025 filled with prosperity for the nonprofit sector and those we serve.
About the Author
Written by Jessica Browning, with input from the entire Winkler Group team. Jessica Browning serves as Winkler Group Principal and Executive Vice President and is a former member of the Giving USA Editorial Review Board. She received a B.A. from Duke University and an M.A. and M.B.A from the College of William & Mary. Connect with Jessica on LinkedIn.
References
Achieve. (2019). The Millennial impact final report: Understanding how Millennials engage with causes and social issues. https://www.achievecauses.com/millennial-impact-report#Reports2019
Giving USA Foundation (2023). Giving USA special report: Giving by generation. https://store.givingusa.org/products/giving-usa-special-report-giving-by-generations?variant=43818347561184
GivingTuesday. (2022, April 10). Informal giving community care and mutual aid. https://www.givingtuesday.org/informal-giving-community-care-and-mutual-aid/
Han, X., Hungerman, D., & Ottoni-Wilhelm, M. (2024). Tax incentives for charitable giving: New findings from the TCJA. National Bureau of Economic Research. https://doi.org/10.3386/w32737
Independent Sector & Edelman Data and Intelligence. (2024). Trust in nonprofits and philanthropy. https://independentsector.org/wp-content/uploads/2024/06/IS-Trust-in-Nonprofits-and-Philanthropy-Report_6.25.2024.pdf
Lindsay, D. (2024, October 8). Getting anonymous DAF donations? 7 things to do. The Chronicle of Philanthropy. https://www.philanthropy.com/article/getting-anonymous-daf-donations-7-things-to-do
Tax Policy Center. (n.d.). How did the TCJA affect incentives for charitable giving? https://taxpolicycenter.org/briefing-book/how-did-tcja-affect-incentives-charitable-giving
The Generosity Commission. (2024). Everyday actions, extraordinary potential: The power of giving and volunteering. https://www.thegenerositycommission.org/generosity-commission-report/
