Inside the changing landscape of American philanthropy
I believe we are going to a new place in philanthropy in 2025.
Whether that statement fills you with eager anticipation of what’s ahead – or dread in the face of the unknown – I hope you’ll join me in considering the Strengths, Weaknesses, Opportunities and Threats (or, SWOT) before us.
First, let’s take a quick look back. (You can read my 2024 analysis here if you want to dig deeper into the year-over-year trends). Historically, the narrative of the past four years has been this: There are more dollars and more donors than there used to be.
About two years ago, however, the numbers began to tell a different story. In aggregate, over the last two and a half year period, every major nonprofit sector has experienced a decline in total charitable dollars received – and in total individual donors.
This industry-wide decline has become our new reality. Yet, it’s important to remember that the donors have not disappeared. They are there, but some are being more discerning about where and how they give. They are still there with charitable hearts, but many are on the sidelines awaiting signs of economic and social stabilization.
Most givers are still connected to the nonprofits and ministries they see changing the world, but some lack the capacity to give today that they had in years past.
How can nonprofit leaders and organizations like yours navigate this reality? I have synthesized key findings and recommendations from the Giving Institute’s Generosity Commission: The Shifting Landscape of American Generosity.
I invite you to explore how we may confidently navigate our new reality, with this 2025 SWOT Analysis…
STRENGTHS (2 bright spots in 2025)
1) Young donors are advocating for causes they care about. In a study of donors age 45 or younger, many agreed that advocacy is just as important as giving financially. They’ve “liked” a nonprofit’s social post, forwarded an email or signed a petition – and in their opinion, that instance of “advocacy” is enough.
While this engagement is encouraging, it’s also challenging because NPOs can’t run off advocacy alone. However, about two-thirds of “advocating” donors are likely to give more financially in the long-term than those whose involvement is limited to giving financially. What you do with your organization’s advocates is one of the biggest scaling opportunities, and can be supported through digital channels that offer the frequency and speed you don’t get with traditional direct mail.
2) Peer-to-peer giving is gaining momentum. Most reports on philanthropy do not include trends on peer-to-peer fundraising – this channel is not regularly tracked like individual, direct donations. Yet, more donors are looking for ways to be closer to the good work happening at organizations in their community and are giving directly to others doing that work.
Nonprofit organizations can leverage the strength of peer-to-peer giving by doubling down on their personalized, one-to-one communication (and involving Major Gift Officers, for example). Donors need to be thanked, and they’re looking to feel that connection they get from peer-to-peer giving from the NPOs they support. It’s a cultural change in giving practice we must adapt to in 2025.
WEAKNESSES (2 areas to watch closely in 2025)
1) Decline in individual donor participation. This is the biggest concern in philanthropy today, and rightly so. For most organizations, individual donors are their bread and butter when it comes to streams of revenue.
It should come as no surprise that persistent economic challenges have led to this decrease in giving. In 2000, 66% of Americans were giving charitably… In 2018, that number dropped to 49%. At the end of 2023, charitable giving was under 40%, due to high inflation and economic instability. Concurrently, the “COVID boom” – or increased gift size seen during this global pandemic – proved unsustainable after the initial outpouring of support in response to this crisis.
It has become more important than ever for NPOs to be innovative and expansive in their outreach to prospective donors, and to prioritize strategies to re-engage and sustain supporters. We must continue to share authentically with donors how great the need is – and what will happen if our organizations cease to exist without their support.
2) Increasing reliance on DAFs and major donors.
With the decline in individual giving, we’ve seen an increase in NPOs relying on giving from major donors and the wealthy via DAFs. I don’t discourage you from promoting DAF giving opportunities at your organization. However, it’s critical to understand how volatile “big money” is because wealthy donors may be betting on the moves of the market. Both individual donors and wealthy donors are giving via DAFs more than in previous years. However, this has come with a risk to their trust of this channel, as there was no legislation in the US to manage when these funds were distributed to the nonprofit of their choice. While currently a weakness, there is legislation coming down the road to put legal guardrails on DAFs, so this is an area to watch for improvement.
OPPORTUNITIES (2 areas to build up in 2025)
1) Integrating AI and human touch. Last year, I shared how my colleagues at BDI were aggressively exploring the capabilities of AI. I predicted that nonprofits who embraced these technologies would increase their impact… meaning more dollars raised and more lives changed.
At BDI, our AI-powered Generosity360 Dashboards are providing near real-time results on campaign performance and predictions of donor behaviors. This in turn informs our content strategies and marketing decisions. While these technologies can never know the deepest motivations of people’s hearts, they can help us lean-in and use our own intuition and experience as human beings to inspire their generosity.
2) Mid-sized donors, corporate giving and other pieces of the giving pie. With giving from individuals down, it forces NPOs to be innovative and strategic in finding new streams of revenue in 2025. According to Giving Institute member Joshua Meyer, VP of Market Engagement for Bloomerang, there are three areas that show potential:
- Mid-sized donors. Consider targeted, unique offers to appeal to this audience group. Planned giving research shows that mid-sized donors may be eager to make a large gift, even if they have never donated to your cause.
- Corporate giving. Over the last 5 years, corporate giving has grown by 14.3%. As more brands seek to leverage cause marketing, forming partnerships with businesses aligned with your mission can help you raise awareness for your cause and bring in more support.
- Bequests. For the last 40 years, bequests have remained a steady stream of support, representing around 8-10% of total giving. Invite supporters to make a lasting impact through a gift in their will that benefits your cause.
THREATS (2 pressure points in 2025)
1) Waning religious motivation to give. For the second year in my SWOT Analysis, I foresee the decline in religious giving to be significant to the state of philanthropy. Over the last 100 years or so, religious motivation and practices (e.g., the biblical mandate to tithe), were a major motivator to giving.
Today, it’s become far less of a factor in the United States, where these declines in giving mirror a downtrend in church attendance.
Declines in religious practice not only impact faith-driven organizations but all NPOs. People of faith give to a wide array of causes, so this is a threat to all areas of philanthropy. In response to this threat, we must reinforce the impact and ministry outcomes of our donors’ gifts in our messaging.
For example… Not only will a donor’s gift provide a meal or a safe bed… Their gift is a catalyst, a resource God uses to empower life transformation. A single gift is often an investment in someone’s future, on earth and for eternity.
2) Giving is volatile in an environment of polycrisis. Last year, I shared the concept that we are living in an environment of “polycrisis,” meaning there are multiple crisis situations impacting the economy, social structure and philanthropy simultaneously.
In 2025, giving is likely to remain volatile as multiple crises vie for our attention. Many are worthy of our support. What has changed recently is now giving volatility is being seen across all philanthropic sectors. Trends on who is giving, why they are giving, and other motivating factors are not as predictable as they have been in the past.
Donor expectations are also changing. There’s been a shift of support for organizations that provide novel solutions to systemic problems (e.g., poverty, homelessness, addiction, inequity). Simultaneously, donor trust in organizations to solve problems seems to be eroding, while there is a growing focus on localism and helping with first-person crises.
Individual generosity is trending towards supporting a smaller portfolio of organizations. With several years of unstable financial markets and record inflation, many donors are asking themselves, “What can I afford to do?” Nonprofits must position themselves as trustworthy and deserving of support today.
In Summary: What do these trends mean for 2025?
1) Expect it to (continue) to be “abnormal” out there. In these days of polycrisis, we can and will navigate the ebb and flow of change successfully together. As in the past two years, I expect change and volatility to be the predictable constant.
2) Double down on the fundamentals. Even as we are challenged to provide fresh and compelling stories (the evidence of the life transformation and outcomes of our work), and to use new technologies to connect with supporters, we also must recommit to doing the routine things – routinely.
That means being transparent and accountable with our teams, our communities, our supporters and with one another. In shaky times, we must remain firm, consistent, and committed to our cause.
We must demonstrate our faithful expectation of an expanded opportunity to drive positive transformational change, here and now in our own communities where it can be seen with donors’ own eyes. This is critical both inside our organizations with staff and partners and externally as we communicate with donors and the community.
3) Have faith. My stalwart confidence in philanthropy and our ability to fuel vital nonprofits and your ministry’s work with financial support comes from a firm conviction. Despite giving trend-lines that are, well, as discouraging as they are real, the fundamentals of generosity in America are still in place.
We know from multi-channel and comprehensive national research and donor surveys that there is tremendous desire to give – which is just waiting for us to provide a spark of inspiration and connection.
3) Recognize what is inside and outside of your control.
- Out of our control. The economy, social and political volatility, and a myriad of complex factors converged in the years since COVID and are largely responsible for the general contraction of the overall support for nonprofits and ministries. It took several years of pain, on the heels of the global pandemic that left its mark on all humanity, for the result to be an extended trend of “pause” and “wait and see” in giving.
- In our control. On the upside, financial markets and the environment for strong philanthropic giving can actually change pretty quickly. I expect to see significant improvement in this regard in 2025. However, it will likely take some time for favorable changes to be felt in donors’ daily lives and to translate into their giving behavior.
As cause champions and fundraisers, we inherently know that we are responsible for providing resources and an environment for life transformation, for telling inspiring stories, and for making the invitation to join us in the crusade. Ultimately the outcomes and results are beyond our personal control, but our effort and excellence in setting the stage is well within our control.
I am hopeful… no, I am expectant that we’ll see some of the concerning slides in philanthropy slow or perhaps even level off this year. And, as I have always preached, there is always enough potential – money and donors – for the needs of the organizations who are truly pushing boldly forward, courageously standing for the marginalized, and humbly serving.
A final thought as we charge the fields of impact this year:
I believe that so much about rallying mission-driven people, whether it be staff or volunteers or donors, is fundamentally about establishing and growing trust. Trust is the foundation of relationships. Relationships are the foundation of love. And love is the engine of everything good.
Love is the Great Commandment. (Matthew 22:37-38)
So, as we leverage our effort and excellence and prepare to zig and zag around a changing course, we might consider holding our strategies and campaigns, our stories and appeals, and our important decisions and actions up to the light of one test, “Does this build trust?”
If the answer is “oh yes!” – then we have a strong shot at everything we’re pursuing. If we cannot yet respond conclusively and affirmatively so, we need to have the courage and humility to change our approach until we can. The simplicity of this checkdown test can provide clarity, and clarity has power.
Together, we will navigate polycrisis and volatility. Together, we can inspire and amplify the generosity that truly makes a lasting and positive impact on our world.
