DonorsTrust Vice President Peter Lipsett recently appeared on the Cato Daily Podcast with host Caleb O. Brown to talk about trends in philanthropy—how the share of mid-level donors is shrinking compared to affluent households— and about legislative threats to donor privacy in the new Congress.
“There’s a trend towards more big-dollar donations or the higher-wealth group giving more to charity and starting to—I wouldn’t even say crowd out—it’s just the smaller dollars, the mid-level donors seem to be disappearing,” says Lipsett.
Share of Mid-Level Donors Small Compared to Wealthier Households
The Lilly Family School of Philanthropy, for example, in a recent study found that eight out of 10 households with more than $200,000 in net worth gave to charity in 2018. By contrast, fewer than four in 10 households with less than $50,000 in net worth made donations to charity in 2018.
“Is that because of tax-law changes? Is that because of an ethos that their dollar isn’t doing anything because these mega gifts are crowding things? That’s not really clear but that—for me—is one of the concerns on the charitable horizons that we need to address. We need to bring those dollars in.”
Small-Dollar Donors Backbone of Local Social Services
It’s the small- and mid-level donors that keep local charities propped up and operational in the day-to-day work of meeting needs at the community level. Mega donors tend to give to larger charitable outfits while the smaller-dollar donors knows best about the needs in is in her immediate community.
“Jeff Bezos isn’t going to give a lot of money to the local food bank or even to the local theater group. Those are going to come from small- and mid-level donors who really understand it and so we need to remind people—and I think the pandemic has done this a little bit—the value of their charitable giving.”