Chris Langenfeld, director of development at Heckrodt Wetland Reserve in Menasha, feels fortunate.
While the 2017 tax cuts increased the annual standard deduction, which led to fewer taxpayers seeking deductions such as the ones gained through making charitable gifts, Heckrodt did not see a decline in giving.
“We tried to do some different things, so we’re not sure if that is keeping our funds steady or if people are continuing to give without worrying about the tax benefit,” Langenfeld says.
Heckrodt, for example, unveiled a giving program that allows donors to fund a particular activity or event, such as sponsoring a bench or donating money for a children’s workshop. “People like to see what their money is going to, and then they feel more connected,” Langenfeld says. “Giving to a general or unrestricted fund may not be as interesting.”
While charitable gifts for Heckrodt have held steady, that’s not the case for all nonprofits. Nationally in 2018, GivingUSA reported that charitable giving by individuals dropped an inflation-adjusted 3.4 percent. While that may not sound like a lot, it equates roughly to $10 billion nationwide.
United Way of Door County saw donations decline slightly in 2018, and executive director Amy Kohnle is waiting to see what the 2019 campaign brings. She’s not sure what role the new tax law played in the decline, but some donors “may be facing difficulties and not giving for reasons other than the charitable tax law.”
Whether or not organizations have seen a decrease in donations, nonprofit leaders have definitely noticed a change in giving habits during the past couple of years — whether it’s because of tax law changes, changing demographics or some other reason.
Peter Kelly, president and CEO of the United Way Fox Cities, has noticed fewer people are making donations, but those who decide to donate are giving more. “That’s not a sustainable model,” he says.
Based in Appleton, the newVoices choir has also seen a change in giving patterns. While the organization is fortunate to receive larger gifts to help sponsor its concerts, board president Jim Weiland says small-and-medium-sized donations have declined.
“It’s harder for us to identify those donors and then determine why they are no longer giving,” he says. “We are not a large nonprofit and just lack the resources to do that kind of thing. We are definitely fortunate for our donors.”
As for some of newVoices’ larger donors, Weiland says some have committed to a three-year sponsorship, while others are just year-to-year, and “you never know when that might stop.”
Kelly says few people realize individuals and family foundations account for 90 percent of charitable giving in the United States. That means trying to understand why people give — or don’t give — to nonprofits is so vital.
“I think there are a whole host of things going on. The tax law change may have swayed some people from giving because they lost an incentive,” Kelly says. “Another thing is that those entering the workforce now and millennials have a large amount of debt that they are trying to pay off. There are also some workers who are not seeing their wages keep pace with rising prices, so it’s harder for them to give.”
While some millennials and members of Gen Z are not giving with their money, Kelly says they are more inclined to provide hands-on help with a cause they’re interested in.
“That shows they want to be engaged, and maybe now they can’t give financially, but perhaps when they are in a position to give, they will because they are already involved so closely in an organization,” he says.
Langenfeld agrees he’s seen millennials want to get involved with volunteering before contributing financially. “If you can win their heart over, it’s easier to win over their wallet,” he says.
How people give has also changed, says Curt Detjen, president and CEO of the Community Foundation for the Fox Valley Region. Instead of making an annual donation with a check or cash, donors are looking for more sophisticated ways to give — that may also provide them with some tax benefits.
For example, some donors create family funds where they may put a larger gift — maybe what they would plan to give over five years — and then make donations from that fund over a five-year period to support nonprofits important to them.
“It does provide them with some tax advantages for that one year by doing that,” he says. “They have to think ahead and be more deliberate in their giving.”
Detjen says donors are also looking at different ways to give. “If they are over 70 and need to make a required IRA disbursement, they arrange it so that goes directly to a nonprofit, and they don’t need to worry about the tax implications. The same goes for stocks or anything they sold where the value has gone up significantly,” he says. “By passing those funds right to the nonprofit, they avoid capital gains taxes.”
The Community Foundation is not alone in receiving non-cash gifts. Smaller nonprofits have also noticed the change.
The Boys and Girls Club of Greater Green Bay has seen an increase in donations coming from appreciated stock, IRA disbursements and donor-advised funds, says Jenifer Allen, chief development officer for the nonprofit.
“Our donors who are near the threshold for deductions are finding alternate ways to support our organization and still enjoy tax benefits that may otherwise have been at risk with more traditional forms of giving,” she says.
At the United Way Manitowoc County, executive director Ashley Bender says donors are asking about different ways to give. “We have had donors asking more about donating stock,” she says. “There’s been a lot of education out there about donating that way or by gifting their IRA disbursement.”
Bender also works with local foundations if someone decides to set up a donor-advised fund and give from there to the United Way. “It’s really changing how people are giving. More people are giving online, such as through social media,” she says. “We need to keep up with all the changes and options out there so we can meet our donors where they are. There’s a mix of generations out there and they all give differently.”
Newer nonprofits also need to find ways to reach donors. Shawano Area Matthew 25 Inc., which serves the area’s homeless community, is just a few years old. Executive Director Jennifer Laude Bisterfeldt says the organization’s mission is one that people want to support.
Bisterfeldt says Shawano Area Matthew 25 recently launched a capital campaign to raise funds to build a new facility. She adds the nonprofit is now setting up the necessary infrastructure so donors can gift stock to the organization.
“We have been fortunate people believe in what we’re doing and want to give because it’s the right thing to do,” Bisterfeldt says.
The spirit of philanthropy is strong in the area, says Allen, adding that events such as Give BIG Green Bay — a one-day fundraising event organized by the Greater Green Bay Community Foundation and the Packers.
“As a selected charity for this community-wide giving day, we saw a tremendous amount of support come through the community foundation during this 24-hour event,” she says. “Efforts such as this will continue to encourage our community to get involved in supporting local nonprofits despite the changes we are seeing in the tax laws.”
The area United Way organizations partner with businesses in their communities on fundraising campaigns. In Manitowoc, Bender works with employers to help them put together their plans to raise funds. That support has been crucial in the past couple of years since the organization decided to focus on supporting four county-wide initiatives: volunteer engagement, youth social and emotional well-being, early connections and literacy, and basic needs.
“It’s not a traditional way” of doing things, but the community has responded well, Bender says.
In the Fox Cities, Kelly says support from local corporations is vital to the campaign’s success.
“Fortunately, we have great business partners who want to give back to their communities and engage their workforces in our annual campaign,” he says. “We try to do a good job of telling our story and engaging donors. We support more than 100 programs, and if we can share how people’s lives are being changed by these programs, that’s a powerful motivator.”