Is the Bottom 98% Giving Less?

Dear Kim,

I have been reading a lot about the concentration of wealth and giving among the top 2%. Some articles claim there is a parallel decline in the number and level of people making smaller gifts. What are the implications of this for fundraisers? And do you believe that the bottom 98% of people are actually giving less? I’ve loved your work on grassroots fundraising for smaller organizations, and I believe in the power of the many smaller gifts and donors, but I feel pressured to focus on the 2%. Help me keep my faith in the power of the people! Thanks.

~Power of the People

Dear Power of the People,

Your question is very timely and on-point. I have also been reading these depressing reports. For readers who haven’t, and want to be depressed but also knowledgeable, this is one of the better ones: “Gilded Giving: Top Heavy Philanthropy in an Age of Extreme Inequality” by Chuck Collins et al. 

However, there is also this recent report, about the amount of money that aggregating a lot of smaller gifts can create, which indicates the evidence people are using is not definitive. A huge problem in calculating who gives what is that 70% of Americans file a short form for their taxes, which means they do not itemize their charitable deductions. We really don’t know with any certainty how much they give. There are predictive models, surveys, and reports from nonprofits themselves, and these are useful but I remain skeptical that we have the whole picture of giving. A lot of very small gifts are made in cash—a bake sale by the kids in your neighborhood benefitting a local immigrant rights organization, or the legion of street and door-to-door canvassers who we give $10 to because we empathize with them but don’t want to formally sign up for the organization they represent. And of course, this doesn’t even count the amount of money given to people and organizations that have no formal status with the IRS.

Having said that, I do believe there is ample evidence that fewer people are giving, and that the vast majority of that loss is from middle and working class people. This has been going on for some time. When I first started fundraising, eight out of ten adults gave away money; today it is has dropped to just below seven out of ten. This loss reflects an overemphasis on major gifts. Very simply put, someone who works all day for minimum wage is not going to give $25 which took her at least two hours to earn when all she reads about is how wonderful it was that So-and-So gave $20,000, and someone else gave $100,000, and a foundation gave $50,000. On the websites of even a lot of social justice organizations, there will be lists of funders and major donors. Message to small donors: “We can’t even be bothered to list you in virtual reality.” My advice here is list them all or don’t list them at all.

On the brighter side, it is clear that all kinds of people from all walks of life and access to money, are giving. Will we in the nonprofit sector be able to step up and take advantage of this? Show people how much we appreciate their help? Tell them what we did with the money? That remains to be seen.

Finally, most of the people reading this column are from organizations with budgets under $2,000,000 and often way under that. So, the good news for you is that you don’t need someone to give you $2,000,000. I know one organization with a budget of $500,000 and their biggest donation is $2,500. Giant gifts can swirl all around you, but you can focus on building the power of people! This is analogous to people who are out of work and complain, “There aren’t enough jobs.” But job counsellors will tell you, “Focus on that fact that all you need is ONE job.” That only changes your attitude, which changes everything. Focus on the donors you need and pay attention to the ones you have. Build movements, not bank accounts.

~Kim Klein