The last two years have been anything but predictable. Will 2022 be another aberration or will we return to pre-pandemic trends in giving?
Written by Jessica Browning, Principal and EVP, Winkler Group
We’ve seen the sector embrace the new and the old; developing innovative and creative solutions to meet and overcome challenges presented by the pandemic while also maintaining traditional best practices. But normalcy, or at least a kind of normalcy, appears to be on the horizon. Normalcy, in turn, brings stability. With stability comes the opportunity to prioritize the future, to move away from short-term fixes and toward long-term planning.
Below are some of the trends we expect to shape philanthropy in the coming year, and how we will advise our clients to leverage them.
A Bullish 2022
We’re predicting giving to be strong in 2022 because the stock market is expected to keep growing. In December, JP Morgan, Wells Fargo, and Goldman Sachs all predicted the S&P would reach above 5,000 at the end of 2022 (the S&P was at 4,686 on December 7, 2021) (Klebnikov, 2021). Because philanthropic giving is highly correlated to the strength of the stock market as seen in this graph from Giving USA, we anticipate a robust year of giving ahead.
Another positive indicator is last month’s GivingTuesday 2021, which raised $2.7 billion—a six percent increase over 2020. The number of donors also rose—up six percent over last year’s already high numbers (Hanyes & Stiffman, 2021).
Giving USA 2020
Will the Endowment Fervor Last?
Motivating donors to fund an endowment is often a challenge, or at least it used to be. In the many campaign studies we have conducted over the last two years, we’ve seen a noticeable shift.
The pandemic instilled in donors a sense of responsibility and sustainability. Endowments that were once an afterthought are now at the top of donors’ priority lists. Donors recognize the fragility of the organizations and institutions they support; they want to ensure their favorite causes can weather the next pandemic or catastrophe.
Our team is split on whether the interest in endowments will last for the long-term. We hope it will, but we also recognize that it is up to all of us to continue to make the case for financial sustainability alongside the need to advance our missions.
Demand for Campaigns Will Continue to be Strong
Organizations and institutions that postponed a campaign in 2020 and again in 2021 will finally take the plunge. The need for new facilities, new programs, and larger endowments has not subsided. And nonprofits are recognizing the external factors that are likely to encourage large campaign gifts in 2022.
Last December, we dubbed 2021 the Year of the Transformational Gift—and 2021 did not disappoint. We saw more seven-figure gifts made to campaigns in 2021 than during any other year in the Winkler Group’s nearly 20-year history. Given the stock market’s expected growth and the trend towards ever-larger gifts, we expect 2022 to be another landmark year for campaign success.
Shorter Strategic Plans
Five-year strategic plans have been the standard, but we expect the shift towards shorter timelines to continue. The pandemic underscored the importance of being nimble. As a result, institutions and organizations have been adopting strategic plans with shorter timelines—some as short as two years. We expect this trend to continue in 2022 and beyond.
There are many benefits to a shorter strategic plan. For nonprofits, a shorter timeline means more opportunities to engage key stakeholders in the plan’s drafting and execution. A shorter span also creates a sense of urgency—and increases the likelihood that the plan will be fully implemented.
Congress Won’t Act
As much as we hate to make this prediction, we do not foresee Congress making any advances in passing permanent legislation to encourage philanthropy through tax breaks.
The tax breaks for giving that Congress enacted during the pandemic will expire and will not be renewed. This means that the cap on deductions will revert to 60 percent of adjusted gross income and the $300 limit for individuals to deduct donations will disappear. There does not appear to be support for a “universal” deduction among lawmakers, at least in 2022.
About the Author
Jessica Browning, MBA is Principal and Executive Vice President of the Winkler Group, a national capital campaign and strategic planning firm headquartered in Charleston, South Carolina. A former member of the Giving USA Editorial Review Board, Jessica has a B.A. from Duke University and an M.B.A. and M.A. from the College of William & Mary.
References
Haynes, E., & Stiffman, E. (2021, December 2). GivingTuesday raises estimated $2.7 billion from americans, a 9% rise. The Chronicle of Philanthropy. https://www.philanthropy.com/article/givingtuesday-raises-estimated-2-7-billion-from-americans-a-9-rise?utm_source=Iterable&utm_medium=email&utm_campaign=campaign_3307381_nl_Philanthropy-Today_date_20211202&cid=pt&source=&sourceid=&cid2=gen_login_refresh
Klebnikov, S. (2021, December 1). Here’s what wall street’s biggest banks predict for stocks in 2022—and what to watch for. Forbes. https://www.forbes.com/sites/sergeiklebnikov/2021/12/01/heres-what-wall-streets-biggest-banks-predict-for-stocks-in-2022-and-what-to-watch-for/?sh=5d6698416b31
