Rose-Colored Glasses: The Trouble With Industry Numbers on American Generosity

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Judging from many of the reports and figures that tend to be released this time of year, it’s easy to get the impression that we’re living in a golden age of American giving.

GivingTuesday’s post-game numbers estimate $3.1 billion in giving in the United States this year, “representing a 15% increase compared to GivingTuesday 2021, and a 25% increase since 2020.” The National Philanthropic Trust’s annual report on donor-advised funds showcases “historic levels” of giving from DAFs in 2021. And to take just one more example, a recent report from software firm Classy and crowdfunding platform GoFundMe found that despite a rocky stock market, inflation, and the specter of recession, “90% of U.S. donors [planned] to donate the same or more in 2022 than last year.”

Paeans to Americans’ rising generosity and willingness to keep their wallets open during COVID are a dime a dozen these days, and they’re not without some justification. However, the prevalence of these rosy numbers in nonprofit media — especially around the holidays — drowns out some of the hard questions we still need to be asking about where American generosity is falling short.

Part of the problem with many of these top-level reports is that they paint only a partial picture of what’s happening in the sector, and often gloss over or fail to address realities that run counter to that picture. The report from Classy and GoFundMe, for instance, begins with only the briefest of acknowledgements that the power and prevalence of small donors is declining next to that of large donors, before embarking on a lengthy, datapoint-heavy ode to the “citizen philanthropist.”

The national donor-advised fund sponsors are another set of stakeholders that continually engage in this sort of thing. The National Philanthropic Trust, a leading DAF sponsor, which also happens to release the nation’s only really comprehensive annual account of DAF giving (funny that), regularly uses its report to talk up positives around DAF giving and downplay potential negatives.

Other DAF heavyweights do the same, including the nation’s largest grantmaker, Fidelity Charitable, as well as its peer and competitor Vanguard Charitable, which released poll results last month along with a claim that “nearly 1 in 4 American donors with a charitable giving budget increased their giving due to rising inflation.” (Emphasis mine.) To read some of these reports is to enter a world where the generosity of the American populace is surging to new heights — for reasons usually left unexplained — and where nonprofits worried about their bottom lines amid deep economic uncertainty and social turmoil should, well, worry less.

Most savvy philanthropy watchers (including, I imagine, readers of Inside Philanthropy) understand that some of the headier numbers trotted out during the end-of-year giving season need to be taken with a grain of salt. It’s not that these figures are wrong or intentionally deceptive — in fact, they’re often key to understanding trends in the sector. But we need to bear in mind that most of these reports are coming from interested parties, or are funded by them. And those parties will, understandably, want to present the environment in which they operate in a favorable light.

The DAF sponsors are obvious examples, but no less obvious are for-profit concerns like Classy, GoFundMe and a host of other companies offering services to nonprofits in the realms of fundraising, crowdfunding, digital engagement and the like.

GivingTuesday, the organization, is itself a standout example. Its Giving Tuesday Data Commons, which it calls “the largest philanthropic data collaboration ever built,” has a list of supporters and platform partners that gives off major nonprofit-industrial complex vibes. I reckon few of them have much to gain from dwelling on long-term structural weaknesses in the philanthrosphere. Note also the presence on that list of mega-donors like Bill Gates and Melinda French Gates and MacKenzie Scott.

The main issue here is that in a digitalized world where online platforms and intermediaries have a hand in most small donations, they’re the ones with the raw data. And that gives them — and maybe their financial backers — the power to frame the narrative around small giving before other voices can weigh in. The overall effect is that while some advocates and watchdogs may call aspects of this data into question, most nonspecialist news outlets and other media simply report it at face value. And that’s what the majority of Americans see when they pay attention to this world at all.

I’m not sure there’s any near-term solution to that issue, except to continue asking harder questions about American generosity than these industry numbers encourage. One way to do that is to find ways to think bigger — i.e., Giving Tuesday is all well and good, but what would a truly generous American society look like?

In such a conversation, we wouldn’t gloss over the problem of the stingy super-rich or the challenges raised for civil society when the slightly less-stingy super-rich crowd out smaller donors. For instance, Alan S. Davis of the Crisis Charitable Commitment gave us some much-needed perspective in a recent blog post, including this, among other juicy nuggets: “If [private foundations] increased their payout to real charities by just 1% it would be more than the money raised by all Giving Tuesdays since the program began in 2012.” That’s the kind of datapoint we need more of.

I’ll end by pointing to another trend gaining traction in these glossy industry reports, which is to gesture toward more expansive definitions of “philanthropy” and “charity” — including less easily measured factors like mutual aid, volunteering, in-kind donations and other forms of community support.

That’s a vital and necessary conversation to have. But when any form of support from everyday people is invoked without pairing it with calls for much greater giving from the very rich, we run the risk of letting the biggest donors and foundations off the hook for lackluster grantmaking. At the same time, we allow admirable smaller donors from the upper middle class to stand in for Americans as a whole, the majority of whom must necessarily give of their time because what they don’t have, funnily enough, is money.