Giving Squeezed Out Probable 1.5% Gain In 2018

Overall charitable giving in the United States probably grew by 1.5 percent during 2018, returning to more typical levels, after a 4-percent jump in 2017. Online giving continued to creep toward 10 percent of giving while almost a quarter of online transactions were made via mobile devices.

Those are some of the initial insights from the 2018 Charitable Giving Report, released today by the Blackbaud Institute for Philanthropic Impact. The seventh annual report is the earliest and largest analysis of overall and online giving in the nonprofit sector for 2018. It is based on giving data from 9,029 nonprofits representing $31.9 billion in fundraising via the Blackbaud platform. Online giving includes data from 5,537 nonprofits representing more than $2.7 billion in online fundraising last year for Blackbaud clients.

“Online giving is entering a new phase in which mobile and other digital channels continue to change how donors engage with nonprofits, while donor-advised funds (DAFs) continue to grow in response to supporter preferences and changes in incentives,” said Steve MacLaughlin, vice president of data and analytics at the Charleston, S.C.-based cloud software company. “As charitable giving in the United States sees a return to previous trends after two years of significant growth, it’s imperative to look at overall giving increases since 2016,” he said.

The three-year trend shows that giving was up 9 percent since 2016, with online giving up 17 percent. “Those are still pretty positive growth numbers,” MacLaughlin said, possibly highlighting a spike in giving in 2017 that wasn’t as pronounced at the time. Large organizations saw the biggest growth in 2018, at 2.3 percent while medium sized organizations were up 2 percent. Small organizations experienced a decrease of 2.3 percent.

December remains the biggest month of the year, accounting for 17 percent of overall giving, with 17.3 percent of online giving occurring during the month.

Online giving grew 1.2 percent on the platform during 2018 as the average online gift continued to increase, up about 11 percent, from $132 to $147. Medium-sized organizations saw the strongest growth in online giving at 3.7 percent. Small organizations increased online giving at just 0.7 percent while large organizations actually saw online giving fall 0.5 percent.

Online giving on the Blackbaud platform comprised 8.5 percent of overall giving in 2018 — about $1 of every $12 raised — excluding grants. That compares with 6.4 percent in 2013, the lowest ever recorded. As a point of comparison, MacLaughlin noted that ecommerce comprises almost 10 percent of retail sales, according to federal data. “If anything, consumer behavior is donor behavior. You’re going to start to see it accelerate,” he said.

Smaller organizations led the way, with 13.4 percent of giving coming online for those with less than $1 million in revenue, and 7.8 percent via online for medium organizations ($1 million to $10 million in revenue). At large organizations (those $10 million or more), online giving was the smallest proportion at 4 percent. No sector eclipsed 10 percent when it came to online giving, with K-12 education the highest at 9.9 percent, followed by animal welfare, 9.8 percent.

Some large organizations that are well more than $10 million diluted certain industries, according to MacLaughlin. “Once you see higher education and healthcare become more focused on digital, you’ll see the needle move even more,” he said. Higher education clients reported 5.4 percent of giving online and healthcare reported 5 percent, the lowest among 12 sectors tracked by Blackbaud.

Mobile giving has grown to 24 percent of online giving, up from 9 percent in 2014 and 21 percent in 2017. That’s not because nonprofits are “super focused on mobile, it’s because donors are driving that behavior, and that will continue to accelerate over time,” MacLaughlin said. “That’s a pretty big leap. That leap is being driven by consumer behavior, which becomes donor behavior, and donors drive that. It forces nonprofits to respond — to be donor-friendly or mobile-friendly — or not. A donor can give to another nonprofit who has a better mobile experience. “Year to year, it’s a 3-percent change, but the multi-year trend, that’s a big shift,” he said.