Impact Giving – A New Style of Charitable Giving

Donors have always been inclined to give to causes they feel connected to, and a new style of giving is emerging in the philanthropic community called Impact Giving or Impact PhilanthropyThe term emphasizes a more personal relationship between donors and the long-term outcome of the causes they choose to support. Impact givers generally take more time to research and strategize who they are giving to, they tend to have a better idea of what they want to accomplish, and they are invested in seeing the impact of their donation.

Let’s take a look at certain factors that influence the trend of impact giving.

Political Impact on Donors

The tense US political climate of the past couple years has transformed the nonprofit community and the style in which many individuals are giving. Not only have donors made a clear push to support more progressive causes, but according to Philip Rojc of Inside Philanthropy“…the national climate has also pushed many social justice-oriented funders toward a more considered and strategic view of the long term.”

These types of donors, especially first-time ones, have been moved by extreme opposing political views. Due to this, donors have more interest than ever to donate to very specific causes with a strong determination to see a real impact.

Donor-Advised Funds 

If you’re part of the fundraising world, you’ve been hearing a lot about donor-advised funds, or DAFs. According to the National Philanthropic Trust, they are ‘fastest-growing vehicle in philanthropy’. DAFs allow donors to set aside charitable funds in a special account where they can grow interest-free until the time donors are ready to allocate the fund. A charitable tax deduction is available as soon as the money enters the DAF.

The big takeaway here is that donors are under no pressure to make donations for tax season. This form of donating allows individuals to invest more time into researching which organizations are going to make the biggest changes with their charitable funds and determining the causes they feel most connected to.

Generation X

The first of the Gen-Xers are hitting the 50-year mark, meaning that they are entering their peak giving years. This is a generation that shouldn’t be underestimated when it comes to donating – they have a higher median household income than other generations as well as many philanthropic tendencies that surpass their older and younger counterparts. Due to their hard-earned success, when they do give, they want to see their money go to good use. They want to make an impact with strategic donations and Generation X will follow up to ensure that their donations are used for their intended purpose.

How to Appeal to Impact Givers

It’s all in the name – impact givers will want to see the potential and realized impact of their donation from the beginning to the end.

    • Donation plan – Provide these donors with a detailed proposal and use past donations and their outcomes as a reference. The more detail, the better.
    • Long-term strategy – Share insight into your institution’s long-term plans and how a donor’s gift will contribute to this vision.
    • Outcomes – Impact givers will want to see what has been done with their donation. Whether their donation was for a scholarship, research, or a special initiative, once their donation has been invested it’s imperative that you express gratitude and show them what your team has accomplished.

Nicola Crosta – Executive Vice-President of EPIC Foundation shares that donors who follow this style of giving are actively engaged with the organizations that they choose to support and tend to make long-term commitments in order to evoke real changes. These are ideal donors – thoughtful, informed and goal-focused. If this is the giving style individuals and corporations are moving towards, this is a great sign for the future of philanthropy.

 


Sources & Additional Reading

 

[1] Think Before You Give: Impact Philanthropy vs Impulse Philanthropy, Medium.com

[2] Donor Organizing: A Funder’s Commitment to Next Generation Progressive Philanthropists, Insidephilanthropy.com

[3] Donor-Advised Funds – What Fundraisers Should Know, Livealumni.com

[4] National Philanthropic Trust’s 2017 Donor-Advised Fund Report, Nptrust.org

[5] Why Nonprofit Fundraisers Should Give More Attention to Gen X Donors, Nptechforgood.com

[6] Trends in Philanthropy – the rise of Impact Giving, Nwirc.com

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