Who Cares? Americans Do! Donating $410 Billion Annually to Nonprofit Organizations

Americans gave an estimated $410 billion in 2017 to nonprofit organizations according to the Giving USA 2018 report.  The 2018 report will be out summer of 2019.  These dollars include everything from little league teams to disaster relief and include faith-based organizations and higher education institutions.  This amount equates to 2% percent of the gross domestic product and is growing at about 3% a year.

To offer some context, the nonprofit sector is a $410 billion-dollar market. Compare this to The entire Fast Food Market at $200 billion and the entire Coffee Industry at $208 billion. This means that the nonprofit sector generates more money each year than the entire fast-food and coffee industries  combined.  

There are more than 1.5 million nonprofit organizations registered in the United States, according to the National Center for Charitable Statistics (NCCS). This number includes public charities, private foundations, and other types of nonprofit organizations, including chambers of commerce, fraternal organizations and civic leagues.

With a population of about 325 million that means that if we divided the number of nonprofit organizations into the total number of charities (just for fun to show relation) each charity would have only 216 people to support it.  But in actuality, industry research suggests that at least half of all nonprofits are set up to fail. So, this should leave about 750 thousand nonprofits to split the pie. Right? Not exactly. Industry experts report that there is a big gap between the TOP performing charitable organizations, and “the rest.”

Why Do Some Nonprofits Fail?  Here is where the data gets a little lighter, but if you care to take a deeper look at the many insightful statistics impacting the nonprofit sector, including why people give, how they give and to whom they are giving - here are some reliable sources: 

Now, let’s look again at the $410 billion that Americans give annually to charity. Where is it coming from? Who is giving and how much are they giving?  According to the Giving USA 2018 report, we can analyze donations by category. Of the total $410 billion given annually by Americans:
  •         70% came from individuals
  •         16% came from foundations
  •         9% came from bequests
  •         5% from corporations

As someone who works with nonprofit organizations to help them grow their corporate donations and to build strategic partnerships, I was very surprised to see that of the total amount donated to charity each year by Americans, only 5% came from corporations. But with a closer look, it makes sense as there are only 28 million registered businesses, who are doing the giving - while we have over 325 million individuals doing the giving.

Working with nonprofit organizations to develop marketing and fundraising strategies, I am always interested in WHY PEOPLE GIVE.  The newest information from the Giving USA 2018 report shows that of the total annual charitable giving (of $410 billion) Americans are giving to the following categories:
  •         Religion 30%
  •         Education 14%
  •         Human Services 12%
  •         Gifts to Foundations 11% (unique as they BOTH give and receive)
  •       Health 9% 
  •         Public Society Benefit 7%
  •         International Affairs 6%
  •        Arts and Culture 5%
  •         Environmental/Animal 3%
  •         To other individuals 2%

So the $410 billion dollar question that all nonprofit marketers, leadership teams and boards are asking themselves is – what motivates someone to give? (and more importantly) How can you everage that information to elevate your mission and grow your donor base?

There is a science to "why people give" and there is an art to "convincing them to do it."  Mainstream marketers sell a product or service by identifying a need within a target market, making a product to fill that need - then effectively communicating how their product or service will fill that need. In the world of nonprofit marketing, we are selling ideas and feelings about potential impact. Nonprofit marketing, in contrast to selling shoes, is selling the idea that there is an urgent problem and then convincing a potential donor that their contribution will positively impact that problem. By the way, doing this whilst competing amongst the 1.5 million other equally worthy nonprofits.