The Covid-19 pandemic has left its mark on a lot of areas, including philanthropy. Donors have taken a more personal interest in what causes they support, while charities are rethinking the types of appeals they make, according to people who work in philanthropy. The takeaway is this: The trends that have emerged in the past year and a half will impact the shape of philanthropy going forward.
“The shifts we are seeing are more pronounced than any I have ever seen,” says Amy Pirozzolo, head of donor engagement for Fidelity Charitable.
The needs created by the pandemic, the calls for racial justice and the economic upheaval that hit the world last year—all these things coalesced to spur a 5.1% increase in giving in 2020 to $471.4 billion, according to the Giving USA Foundation.
Schwab Charitable reported a 19% increase in both the number of grants and the dollar amount granted through its donor-advised funds from the same period the year before. Most donors say they will increase their giving even more this year and want to support a charity they have not given to previously, says Fred Kaynor, Schwab Charitable’s vice president of business development and marketing.
He notes that more people are also scheduling recurring gifts and aren’t putting restrictions on their gifts, which gives the charities more flexibility.
In addition, charities are finding new ways to operate because most in-person fund-raising events were canceled last year. “The charities are doing creative things to make sure donors are adapting,” Kaynor says. “As horrible a time as the pandemic was, we are seeing some pretty inspiring things come out of it.”
Schwab Charitable has seen—and taken part in—a significant increase in collaboration between donors and recipients. For example, Kaynor says, Schwab is working with community foundations to increase donors’ access to local organizations.
The onset of the pandemic brought out a streak of generosity in donors, says Rebecca Moffett, chief strategic planning officer at Vanguard Charitable. Vanguard grant giving increased by 22% in 2020, to $1.8 billion, and the donor-advised fund sponsor says it’s on track this year to meet or exceed that.
Vanguard Charitable saw a 150% rise in giving to programs for the homeless during the pandemic, and Moffett believes that was attributable to an overall increase in giving and not just a shift from other areas. Elsewhere, she notes that Feeding America and World Central Kitchen are among the rising-star charities that have attracted philanthropic dollars during the pandemic.
As more donors turned to Vanguard Charitable for assistance in targeting their donations, the fund developed a tool called the Nonprofit Aid Visualizer, or NAVi, a web-based program to help potential donors find charities by geography or mission. That program is available to the public.
“The desire to pinpoint donations is going to continue into the future,” Moffett says. “We have seen the movement toward customizing donations.”
Fidelity’s Pirozzolo echoes that thought. “To be successful, nonprofits need to recognize that donors want to be more involved in their causes, and they want to bring their networks of friends to the cause with them,” she says. “This will have a profound impact on how advisors start the philanthropic conversation. They should start with the client’s values and then see how those values can be fulfilled.