New Study Predicts Growth in Charitable Giving

The nonprofit sector "continues on the road to recovery," with growth in charitable giving of just under 5 percent predicted for both this year and next, according to brand new research from the Indiana University Lilly Family School of Philanthropy. Giving by estates - which makes up the bulk of planned gifts - is expected to do particularly well in 2016.

"This new research is excellent news for charities and for the planned giving community," said Claudine A. Donikian, Pentera president & CEO. "Donors are especially responsive to marketing materials during these improved economic times."

The February 2015 report is titled Philanthropy Outlook: 2015 & 2016 and is co-published by consulting firm Marts & Lundy.

"Many organizations are now hiring and funding staff development as well as investing more in their fundraising and development programs compared with recent years," the study concludes.

Charitable giving above average

The key study prediction is that charitable giving in the U.S. is expected to grow 4.8 percent this year and an additional 4.9 percent in 2016. That is significantly better than the 3.1 percent average annual rate of philanthropic growth since the recent recession and also better than the average for the past 40 years. It also exceeds the predicted growth over the next two years in the U.S. GDP (gross domestic product).

"While the economic and financial sector has seen greater than normal economic volatility in recent years, the projected growth in the overall economy suggests a more stable and more positive environment for philanthropy," Una Osili, Ph.D., director of research for the Lilly Family School of Philanthropy, said in a news release. "Importantly, though, increasing philanthropic giving will require that nonprofits have ... a strong, clear case for support and thoughtful cultivation of donor relationships."

Estate giving way up in 2016

Giving by estates is predicted to increase by 2.7 percent in 2015 and by 6.3 percent in 2016. Above-average projected growth in the S&P 500 is cited as the primary factor. The study is considered to be groundbreaking because it predicts growth rates for charitable giving that have not previously been available. Extensive explanation is provided.

Other key results include:

• Contributions from individuals/households, estates, corporations, and foundations are all expected to increase in 2015 and 2016.
• Individual/household giving is predicted to increase by 4.4 percent in 2015 and by 4.1 percent in 2016.
• Foundation giving is projected to rise by 7.2 percent in 2015 and by 6.7 percent in 2016.
• Corporate giving is expected to grow by 6.0 percent in 2015 and by 4.8 percent in 2016.

The full study can be downloaded at http://martsandlundy.com/the-philanthropy-outlook