The State of Giving in Colorado
This has been a year unlike any other: a global pandemic, protests against racial injustices, a divisive election season and two of the biggest forest fires in Colorado history. Everyone has been impacted in one way or another, including nonprofits.
Many nonprofits are first responders during a crisis, supporting communities with essential services like food, housing and access to mental health care. These nonprofits work around the clock to respond to community needs and the need continues to grow. Other nonprofits rely on ticket sales, galas and admission fees for revenue. Social distancing and lock-downs continue to negatively impact their ability to fundraise. Yet, hope is not lost. In fact, the forecast for giving is bright. As we enter the giving season, we examined some evidence to help us understand how to move forward.
Looking back to look forward
According to Giving USA 2020: The Annual Report on Philanthropy for the Year 2019, Americans, foundations, corporations and bequests gave an estimated $449.64 billion to U.S. charities in 2019.
Laura MacDonald, vice-chair of the Giving USA foundation noted, “In 2019, giving to nearly all of the (charitable) subsectors grew, reflecting the wide interests and causes that Americans care about. With the growth in giving from donor-advised funds, planned giving programs and the evolution to online giving platforms and giving days, there are more varied opportunities than there were 10 years ago for nonprofits to engage with current and prospective donors.”
The 2019 national data indicates growth from donor-advised funds (DAFs) and planned gifts. DAFs held at Community First also saw an increase in giving in 2019, one that continues into 2020. DAFs and planned gifts are both very stable funding sources for nonprofits, especially given that they are largely insulated from job-loss and public health crises. Donors and nonprofits alike would benefit from integrating DAFs and planned gifts into their philanthropic efforts, especially during a year like 2020. If nonprofit and donor involvement can soar during a somewhat regular year like 2019, imagine what can happen during a year like 2020 when people are seeking ways to get involved and help their favorite causes.
Online giving trends in Colorado
With 2,900 participating nonprofits and over 60,000 donors a year, ColoradoGives.org is a rich data source for analyzing giving trends, and all indications point toward a good year for online fundraising. Giving is up by 132% in the first half of 2020, from 4.3 million in the first half of 2019 to 10.2 million in the first half of 2020. This tells us that our communities recognize the impact COVID-19 is having on local nonprofits, and they want to help.
The data also shows that current events are driving donations. We see this evidenced in the organizations receiving the most funding through ColoradoGives.org.
- Essential services, like human services, education and food & nutrition, are the top recipients for donations to date in 2020. This is in line with the increased needs so many people have for essential services in light of COVID-19.
- This is followed by arts, culture & humanities, youth development and civil rights, social action & advocacy, which reflects the trending social issues in our community and the negative impact on our arts organizations from COVID-19 shutdowns.
- Veterans services and STEM saw a decline in support this year. Housing and shelter is another area seeing modest increases and will likely be hard hit in the long run because of COVID-19.
Donors are online
According to the U.S. Department of Commerce, 8.7% of overall giving in 2019 came from online giving and eCommerce sales grew more than 30% between the first and second quarter of 2020. The data highlights that peoples’ giving habits are following their spending habits. The pandemic has driven people online, and the more people use eCommerce tools for spending, the more fluent they become with fundraising and digital giving tools.
This also means that fundraising events are going virtual. Event planners are pivoting their focus, and many are leveraging ColoradoGives.org to process donations.
- This year “Miscast,” the major annual fundraiser for The Denver Actors Fund, pivoted to “CAST,” a professionally produced video concert featuring Colorado theatre artists performing in roles they WERE cast to perform in before the coronavirus shut down their productions. In exchange for a $20 donation, donors received a link to a video production of the show.
- Earlier this year, The Colorado Symphony partnered with Community First Foundation and Denver7 to broadcast Indy Eve, an hour-long virtual fundraising concert event that raised a little over 20 thousand dollars through the online giving tool.
ColoradoGives.org anticipated and is meeting the increased need for donations and increased online visibility. We’ve rolled out a greatly enhanced toolkit for nonprofits including a fully Spanish version. New this year, we also created a donor ambassador toolkit to encourage your donors to become champions for you. These toolkits are two examples of new opportunities that can help nonprofits in their quests to find new ways to reach donors.
The Cares Act: a new charitable deduction opportunity
The Cares Act, passed by Congress in March 2020, offers another opportunity for donor engagement this year. The bill allows a new deduction up to $300 per taxpayer ($600 per married couple) for annual charitable contributions for those who do not itemize their deductions. It is an “above the line” adjustment to income that reduces taxpayers’ adjustable gross income, which reduces taxable income. A donation to a donor-advised fund does not qualify for this new deduction, but any donation made to a qualified charity since January 1 qualifies.
The bill also allows for individuals and corporations to deduct much greater amounts of their contributions if they itemize. Individuals can elect to deduct cash contributions up to 100% of their 2020 adjusted gross income on itemized 2020 tax returns. Corporations may deduct up to 25% of taxable income. This is only for cash gifts that go to a public charity, donors do not get the higher deduction for donating cash to donor-advised funds and these new limits do not apply to gifts of appreciated stock.
Community First Foundation, The Denver Foundation and Rose Community Foundation have recently formed a collaboration to support the recovery and sustainability of the local nonprofit ecosystem with technical assistance and no-interest loans. The Metro Denver Nonprofit Loan Fund will provide no-interest loans to help strengthen local nonprofits at a time when they most need financial support. Organizations that are led by BIPOC, women or serving BIPOC communities will be prioritized because these groups have historically not been able to access credit. Technical assistance, including webinars, virtual workshops and one-on-one support, will help participating organizations assess their business operations so that they can evolve as necessary to meet a changed or changing revenue environment.
Learn more about the role of debt and the Metro Denver Nonprofit Loan Fund, including an overview of the new Loan Fund program, information on how nonprofits access and use debt, and tips on what lenders look for when evaluating a nonprofit’s loan application.
How does all this data and information about new opportunities help us move forward as we think about our year-end giving? Donors have increasingly realized that nonprofits are the fabric of their communities, and the 2019 data shows they have been steadily increasing their support of them. The data also demonstrates that giving vehicles such as DAFs and planned gifts may help nonprofits weather the storm.
The 2020 data thus far indicates an increase in online giving and a trend to support what is in the news. Nonprofits need to think outside the box and shift our focus to online giving, donor-advised funds, and planned giving programs. We need to leverage technology, go virtual with events and take advantage of existing marketing movements like Colorado Gives Day.
Most importantly – tell your story and get it out there. There are people who cannot give because of everything that has happened this year, but there are a lot of people who can give — and they are giving in big ways.
 Charitable Giving Showed Solid Growth Climbing to $449.64 Billion in 2019, One of the Highest Years for Giving on Record, Giving USA Foundation, Giving USA Foundation, June 16, 2020
Quarterly Retail E-Commerce Sales 2nd Quarter 2020, The Census Bureau of the Department of Commerce, August 18, 2020
Now Is a Great Time to Give: New Charitable Rules Incentivize Generosity During Covid-19, Forbes, April 8, 2020
Blackbaud’s Observations of our Fundraising Environment, Nonprofit Quarterly, August 14, 2020