By Jim Bush, Winkler Group President and Principal
When the economy is strong, giving is strong.
Too many fundraising professionals are still hiding behind economic uncertainty as a reason to keep their ambitious plans on hold. It’s time to dust off those plans.
Why? The experts predict strong economic growth for the rest of 2021. Just this week, Federal Reserve Chair Jerome Powell said, “we’re at a place where the economy’s about to start growing much more quickly and job creation coming in much more quickly.” Failing to capitalize on this growth is a mistake.
What does a strong economy mean to your donors, particularly your prospective campaign lead donors? The more optimistic they are about economic growth, the more likely they will be generous in their giving and stretch in a multi-year campaign pledge.
The Lilly Family School of Philanthropy at Indiana University predicts that giving by American individuals and households will increase by 6.0 percent in 2021 and by 3.9 percent in 2022. And this is on top of the strong giving we saw in 2020.
AFP’s Fundraising Effectiveness Project, which tracks giving in America, found that overall giving increased by 10.6% in 2020 over 2019. Donations in 2020 were at a five-year high. The number of major gifts (any gift over $1,000) rose 10.4% in 2020 over 2019.[1]
Three more economic indicators that lead us to believe that giving in 2021 will be strong:
- U.S. consumer sentiment, an index tracked by the University of Michigan, improved in March to its highest since before COVID. This index is important because it measures how people feel about the health of the economy.
- According to the nonpartisan Congressional Budget Office, GDP is expected to return to its pre-pandemic size by mid-2021 and the labor force is forecast to rebound to its pre-pandemic level in 2022. GDP is highly correlated to charitable giving.
- A Reuters poll conducted in February found that for 2021, Wall Street analysts expect the Standard & Poor’s 500 earnings to jump 23.3%. This is important because charitable giving is correlated to growth in the stock market as measured by indexes such as the S&P 500.
Donors will continue to give in 2021. And they will give to the organization or institution that puts forth a clear and ambitious vision. If you are not making your case and making the ask, they will give elsewhere.
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[1] AFP Fundraising Effectiveness Project, Quarterly Fundraising Report, Year-to-Date Nonprofit Sector Trends 01/01/2020–12/31/2020.
