Altering Charity Approach in an Evolving World: Insights from an Expert on Philanthropic Tactics Adjustment
In the coming year, affluent donors will find themselves in a dynamic philanthropic landscape, shaped by economic uncertainty, global instability, and rising needs. As we look ahead to 2025, here's a rundown of the key trends and strategies to optimise your charitable impact.
Growth in Giving
Charitable giving in the United States showed a significant increase in 2024, with a 6.3% rise in current dollars and a 3.3% increase when adjusted for inflation. This marked the first time in three years that giving outpaced inflation. Projections for 2025 suggest a continued increase of about 3.9%. Notably, corporate giving saw a significant boost, driven by market gains, although it may face headwinds due to new legislation imposing a 1% floor on corporate charitable limits.
Asset-Based Giving
As most U.S. household wealth is held in assets other than cash, non-cash asset donations are becoming more prominent. However, many nonprofits lack the understanding to effectively solicit these gifts.
Sectoral Shifts
Sectors that saw the largest giving growth in 2024 include education, international affairs, and public-society benefit. Donors tend to support causes connected to civic engagement and measurable long-term outcomes.
Digital and Personalized Fundraising
Online giving is now the norm, with successful nonprofits optimising mobile-friendly websites, digital wallets, and social media tools. Donors expect personalised communications based on their interests and giving history, with AI increasingly used to predict donor behaviour.
Foundations and Bequests
Foundations remain major philanthropic contributors, with stable bequest giving. There is growing emphasis on planned giving programs and on treating foundations as partners for co-creating impact rather than passive funders.
Optimising Donor Impact
To maximise your charitable impact in 2025, consider focusing on high-growth sectors aligned with your values, such as education and global issues. Utilise or support nonprofits that adopt digital donation platforms and personalise engagement. Incorporate non-cash asset donations to diversify funding sources. Engage with foundations for collaborative impact initiatives. Explore planned giving and legacy gifts to enable transformational funding. Prioritise evidence of measurable outcomes to satisfy donor demand for accountability and long-term change.
Planning Charitable Gifts
Affluent donors seeking privacy and flexibility may consider donating appreciated securities or using donor-advised funds. The stock market and GDP growth contributed to the increase in total giving, with individual and corporate giving leading the way.
As parents and grandparents age, they often wish to continue the philanthropic tradition they've started, ideally through their children and grandchildren. Successful transitions of philanthropic vehicles to the next generation require a sufficient runway and planning horizon to clarify the philanthropic framework for passing the baton of charitable decision-making.
Political Advocacy and 501(c)(4) Organisations
Political advocacy requires special legal consideration. Section 501(c)(4) organisations have emerged as a structure for those who wish to engage in certain forms of advocacy that are more challenging or prohibited for charitable 501(c)(3) organisations. Contributions to 501(c)(4) entities are not income-tax-deductible. Funders of 501(c)(4) entities must comply with both federal and state laws.
In conclusion, the philanthropy landscape of 2025 is one where data-driven, technology-enabled, and strategically aligned giving maximise both donor satisfaction and societal benefit. By staying informed and adopting these strategies, affluent donors can make a meaningful impact in the causes they care about.
- To align personal financial management with wealth-management strategies in 2025, affluent donors could focus on the high-growth sectors of education and global issues, while also utilising digital donation platforms and partnering with foundations for collaborative impact initiatives.
- For those interested in education-and-self-development and career-development, understanding the trends in philanthropy, such as the growth in giving, asset-based giving, and the importance of digital and personalized fundraising, could provide valuable insights for making informed decisions about philanthropic activities.
