Seven Keys to 2021 Charitable Giving :
2021 : A PIVOT YEAR FOR CHARITABLE GIVING
Where will charitable giving go in 2021 ?
It ’ s a critical question . Why ? In recent years , total charitable giving has run in the $ 400 billion range . The nonprofit sector contributes more than $ 1 trillion to the U . S . economy , accounting for over 5 percent of GDP . 1 The 2020 Nonprofit Employment Report from the John Hopkins University Center for Civil Studies tells us that , as of 2017 , there were 12.5 million paid employees in the nonprofit sector . ( As of October 2020 , the sector was down 900,000 jobs compared to pre-pandemic levels ). It is America ’ s third-largest workforce behind only retail trade and accommodation / food services . Moreover , nonprofits account for nearly three quarters ( 71 percent ) of the nation ’ s private employment in education .
In short , it matters where the nonprofit world will go in 2021 .
In the spring 2020 lockdown phase of COVID- 19 , the outlook for the nonprofit world looked grim . In the first three critical months of the pandemic ( March-May ), 71 percent of jobs in private educational services disappeared . 2 But as the country reeled from the health and economic crises , Americans responded with generosity . In October , Philanthropy News Digest reported that charitable giving for the first half of 2020 was up by 7.5 percent on a year-over-year basis . 3
What will happen in 2021 ? While it would be easy to throw our hands in the air and say , “ It ’ s anybody ’ s guess ,” the framework is already in place .
1 : Biden ’ s Tax Plan
While Congress moved in December 2020 to extend key CARES Act provisions ( a $ 300 “ universal ” charitable deduction and the 100 percent AGI deduction ), new legislation under the Biden Tax Plan will ultimately have the biggest impact on nonprofits . As of this writing , no bill has yet been introduced to Congress , but the elements of his plan are well documented : A 28 percent cap on the value of itemized deductions will have a depressive impact on major gifts . Further , Biden has proposed several tax increases of varying types . While not all are likely to be passed , some will pass and again will tend to have a downward impact on giving .
2 : The Politicization of Charity
If 2020 taught us anything , it is that our nation is undergoing systemic change . Geopolitical expert George Friedman in The Storm Before the Calm predicts that we are in a decade of upheaval — institutionally , socially , and economically . The nonprofit world will not be exempt from this turmoil . Expect charities , churches , and Christian schools to be in the crosshairs , with increasing labels and a cancel culture mentality . The loss of nonprofit status may be at stake for those rightly or wrongly deemed to be out of step with new majority positions . This is a dangerous road — either way we go .
3 : The Digital Transformation of Giving
In 2020 , in-person events suddenly went away . As schools closed their doors and switched to online education , enrollment and tuition dollars decreased . The pandemic accelerated a growing trend : excel digitally or go home . Last year we saw some organizations enter the digital giving space for the first time . Technology doesn ’ t go backward . The year 2021 will be marked by a growing emphasis on digital marketing , digital giving , and digital vendors . The right vendors will matter for an integrated giving experience . What worked in the spring of 2020 won ’ t work in the fall of 2021 . Artificial intelligence and increased sophistication across the board will spark an entirely new era of what it means to grow relationships and gifts — online .
48 THE RENEWANATION REVIEW