Generosity among Italians is on the rise, yet the pool of potential donors is shrinking.
In the past four years, the charitable giving landscape has undergone significant changes, with both positive and challenging developments. According to the "Donors, Donations and Corporate Social Responsibility 2023" research conducted by Emotional Marketing and Atlantis Company, the average donation has risen from 51 to 62 euros (+21%), indicating a growing commitment from donors. However, this rise in average donations has not been enough to counteract the increasing number of non-donors.
Between 2019 and 2023, the percentage of non-donors (people who have not donated) has increased from 17% to 34%. This rise in non-donors can be attributed to a combination of factors, including direct fundraising initiatives and declining trust in the Third Sector. The climate of mistrust generated by ineffective and non-transparent fundraising initiatives has affected the sector, with organizations that have embraced transparent financial practices seeing improved donor retention and increased giving.
Direct fundraising strategies, such as donor-advised funds (DAFs), have grown substantially, showing strong donor loyalty especially among Millennials and Gen X. DAF assets reached $251.52 billion in 2023, with record grant payouts to nonprofits. However, concerns over transparency and accountability in nonprofits have contributed to a broader erosion of trust.
The pandemic has also played a role in shaping charitable giving trends. The "market" of donations changed during the pandemic, with the Third Sector responding promptly and effectively to the emergency. Some of the "indecisive" have chosen to support charitable causes for the first time during the pandemic.
However, the pandemic has also led to an increase in fundraising initiatives directed directly to beneficiaries, without the mediation of non-profit organizations. This shift has had a complex impact on donor behavior trends, with some potential donors becoming more interested in supporting causes directly, while others remain hesitant.
Organizations must operate on multiple fronts, including strengthening the relationship with active donors and recovering the relationship with potential donors who have become disengaged. Tools like solidarity purchases and integrated CSR projects are being used to reach potential donors who may not have been reached through traditional donation methods.
In addition to these challenges, perceived inequities in philanthropy, such as low funding for certain groups, and broader systemic issues like cultural barriers in estate planning that affect giving patterns in communities of color, contribute to complexity in donor behavior trends. These factors highlight the need for the Third Sector to continue working towards greater transparency, equity, and inclusivity in order to maintain and grow support from donors.
In summary, while direct fundraising initiatives and increased engagement with donor-advised funds have strengthened support from regular donors, rising skepticism about financial transparency and equity in the sector have contributed to an increase in non-donor numbers from 2019 to 2023. The pandemic has had a nuanced impact on the Third Sector's funding landscape, with both positive and negative effects on charitable giving trends.
- As organizations strive to maintain and grow support from donors, it's critical to address concerns about financial transparency and perceived inequities in philanthropy, particularly in estate planning for communities of color, to encourage more personal-finance investments in the business sector and the finance of non-profit organizations.
- The rising number of non-donors in the past four years is influenced by a combination of factors, including skepticism about financial transparency and direct fundraising initiatives, and organizations must employ transparency and accountability in their practices to attract these potential donors and align with the values of the personal-finance-minded demographic focused on making contributions to business and non-profit ventures.
