“Philanthropy is not just a strategic move [about taxes]; it has an emotional component,” Nilsen says. “Advisors can start the conversation to find out what the clients really care about. There are 1.5 million charities in the United States. There is a charity for every client.
“I don’t know if charities know how to talk to donors and advisors,” Nilsen adds. “But all three can work together to find out what kind of project might inspire the donor.”
Elizabeth Boris, founding director of the Center on Nonprofits & Philanthropy at the Urban Institute, said the numbers may paint a worse picture than what will play out for the rest of 2018, especially during the fourth quarter, which is traditionally the high season for charitable giving.
However, the picture also could have been permanently changed because of the 2018 changes in the tax law. The law increased the standard deduction, so that many donors bulked up their giving at the end of last year to receive the tax deductions that were still in place at that time. Last December saw a 47% increase in donors giving $1,000 compared with the last quarter of 2016.
“While it is too early to conclusively state what the exact impact of the new tax law is on giving, it is very possible that the higher levels of giving in the fourth quarter of 2017 created a sense of donor fatigue and led to lower-than-usual levels in the first quarter of 2018,” the report says.
“The bottom line is that we are now in a very different charitable landscape than we were 12 months ago,” says Jay Love, chairman and chief relationship officer of Bloomerang, an Indianapolis-based maker of donor management software.