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Various Forms of Generosity Matter, But Let’s Not Lose Sight of Charitable Giving

Date: August 3, 2023

Phil Buchanan

President, CEP

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It has become trendy, for some reason, to argue that we’re paying too much attention to numbers, such as those tracked by Giving USA, that gauge contributions to nonprofit organizations. Generosity, the thinking goes, is about so much more than this, and, therefore, it’s crucial that we open the aperture and look more closely at all the ways Americans help each other and their communities.

Jeff Cain argues in a recent Chronicle of Philanthropy piece that Giving USA is discounting “crowdfunding, mutual-aid networks, and other private acts of kindness” when it reports the data on charitable giving. His argument about generosity echoes those made by Stanford’s Lucy Bernholz and others. Cain, a former corporate and foundation executive and philanthropic consultant, is especially caustic, arguing that the “philanthropic professional class is adrift” in a “self-serving sea” in its focus on giving to nonprofits.

However, while it is surely true that generosity takes many forms worth celebrating (and that chronicling and elevating this fact as Bernholz has is important), my view is that we take our eyes off charitable giving levels and rates of participation at our peril. If anything, we’re not paying enough attention. Conflating all forms of generosity, giving, kindness — whatever words you want to use — such that we lose sight of the realities facing nonprofits is anything but helpful.

But Cain is adamant that we’re neglecting crucial manifestations of generosity. “If a person’s charitable contributions decline because they’ve taken in their adult children or aging parents, are they now less generous?,” he asks. “Are they giving less or more? Are they making a positive or negative contribution to civil society?”

These are comparisons that no one (other than Cain), at least to my knowledge, is actually making. The giving numbers tracked by Giving USA should not be seen as some kind of barometer on folks’ generosity of spirit more broadly.

But they are an important indication of the challenges nonprofits face. Cain’s argument implies that we should just accept less nonprofit activity — even as we emerge from a time when we know nonprofits stepped up to meet vital needs amid unprecedented challenges. I disagree.

Surprisingly, even those connected to Giving USA seem to have fallen prey to the confusing conflation between measuring charitable giving levels and gauging something more nebulous. On its website, the “Generosity Commission” formed by the Giving USA Foundation in response to the declining percentages of households giving to charitable organizations, summarizes research it commissioned (and which was conducted by Bernholz and a colleague): “The research found that generosity behaviors reach far beyond the kinds of activities that are officially counted or incentivized in the US, like tax-exempt donations to charitable organizations, and revealed that the way we count and perceive generosity needs to change.”

But of course people exhibit “generosity behaviors” other than charitable giving: this is hardly a revelation. Yet it doesn’t necessarily follow that we should therefore be less concerned about charitable giving — or that we should conflate myriad forms of generosity (that actually differ from each other) in a way that will obscure the realities facing nonprofits.

It may well be that there are forms of generosity that could or should be quantified in some way that they are not currently. That’s fine, good even. But it’s also the case we could no more measure “generosity” in all its various forms than we could measure love — and it would be absurd to try. As the famously mis- and variously attributed quote goes, “not everything that can be counted counts, and not everything that counts can be counted.”

But some things both can be counted and really, really count. Giving to nonprofits is one such thing. We should continue to closely track it — separately, as its own distinct activity — as a means of ensuring the sector and its myriad vital organizations, which have been under so much pressure and simultaneously have done so much good, remain strong and vibrant.

Look, it’s lovely that my neighbor brings over a dinner after I had surgery, but it’s also an entirely different act than giving to a nonprofit. It certainly isn’t philanthropy as we have generally defined that word in contemporary society — even if it may be an expression of its literal etymological roots (love of humanity). The same goes for supporting your niece’s GoFundMe to raise money for her community service project. Or someone’s gift of money to help a family in their community who lost a parent to cancer. Or helping a stranded motorist.

All of these things are wonderful and laudable. And they’re different from making a donation of money to a nonprofit organization.

We should not obscure or minimize, whether intentionally or unintentionally, the reality of a significant decline in the percentage of U.S. households giving to charities over recent decades  as well as a steep year-over-year drop off in total charitable giving in 2022. Yet the reaction to that drop seems to have been a collective shrug, if not dismissal altogether. Cain, for example, notes that the majority of nonprofit revenue is government grants and contracts and fees for service, arguing that, given this, the more than 10 percent decline in total giving is not so concerning.

But, as any nonprofit leader will tell you, it is philanthropic contributions, not these other forms of revenue, that can uniquely offer the kind of flexible support that fuels innovation and organizational capacity. That’s why my CEP colleague Elisha Smith Arrillaga and I argued recently in Newsweek that “the drop in support for nonprofits should be seen as nothing less than a national crisis.”

Some of those calling for a reduced focus on the data on giving to nonprofits speak derisively of what they call the “nonprofit industrial complex.” Yet the overwhelming majority of nonprofits are small and local: these are the organizations that pay the price when donations drop. Let’s be clear about that. More than 90 percent of nonprofits have a budget of under $1 million as of 2019, according to the National Council of Nonprofits.

In a report on a recent survey of our Nonprofit Voice Project panel, we at CEP reported that the biggest challenges facing nonprofit leaders relate to staff, including burnout, filling staff positions, and retaining staff. Among the issues are offering “pay and benefits that keep them competitive with the private and public sectors in a changing job market.” The median staff size of the organizations of our panel respondents, which skews far larger than the typical nonprofit because we include only those who receive at least some foundation funding (because we are surveying them in part about their experiences with foundations as well as individual donors) was nonetheless just 14.

These are hardly behemoth organizations, and most depend to varying degrees on everyday donors to help sustain them so they can provide vital services in their communities, day in and day out. Charitable giving levels have a direct bearing on that work, and on the quality of life of those doing the work as well as those benefitting from that work. That’s who this is all about, not Cain’s imagined bogeyman — the so-called “philanthropic professional class.”

I can’t help but wonder whether the lack of attention to the most recent Giving USA data is related to the cloud of confusion that has been created about “generosity” in all its forms. Some of the very folks I would hope would be sounding the alarm and plotting strategies to alter the trajectory of charitable giving are instead essentially saying, “but look, there are other good things happening.” This may well be true but is, in some real way, beside the point. I also wonder if the lack of concern about charitable giving numbers is connected to a phenomenon I have lamented for more than two decades now: a widespread under-appreciation of nonprofits and the role they play.

It’s well past time to elevate the voices and stories of the vital and effective nonprofits and their staff that exist in every community, doing crucial work — often with and for the most vulnerable among us. They need support and they need it in the form of actual philanthropic donations of actual money.

Phil Buchanan is president of CEP and author of “Giving Done Right: Effective Philanthropy and Making Every Dollar Count.”

Editor’s Note: CEP publishes a range of perspectives. The views expressed here are those of the authors, not necessarily those of CEP.

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