Earlier this spring, Buff Kavelman was invited to join a Senate hearing of the United States Committee on Finance. Centered on “Examining Charitable Giving and Trends in the Nonprofit Sector,” the afternoon’s testimony was delivered by Dr. Una Osili of the Indiana University’s Lilly Family School of Philanthropy and other leaders from across the foundation, nonprofit, and policy sectors.
A strength of the discussion was that it was a truly bipartisan, with the various senators and experts speaking about the philanthropic issues impacting their states and highlighting successful solutions
During the pandemic the nonprofit economy—the nation’s third largest employer—lost half a million jobs but faced more demands for its services. Likewise, although the national economy has grown six times in the past two decades, the scale of giving has not kept pace, and donor numbers have gone down. This is especially true of lower- and middle-income donors. As Daniel Cardinalli, President and CEO of Independent Sector, put it, “The spirit of giving in America is still there, but it’s not fully unleashed.”
TKG agrees that increasing the share of donors across the economic spectrum is critical. If we intend to build equity and inclusion in society, everyone should be encouraged to support what they see as their community’s most critical needs.
While data shows that the most monied donors tend to give to large institutional causes, smaller donors are more likely to support community-focused nonprofits and to volunteer. Support from smaller donors is waning as extra funds and free time are increasingly scarce for many working people in the U.S. today.
Several solutions and observations were put forth during the discussion with support from members of both parties, including:
Reform 2017 tax laws that limit deductibility of charitable giving. Explore new tax structures and provide the IRS with more funds to upgrade the agency’s technology to provide better financial transparency in the nonprofit world.
Place time limits for making contributions from donor-advised funds, which often sit untouched for years after the initial deposit. One study showed that over a third of such funds made no gift of any kind during the pandemic.
And, perhaps most excitingly, there was broad support for establishing a new Nonprofit Office in the White House to advance the nonpartisan traditions of American generosity.
In a time when the country is very polarized, it was heartening to see that that people could cross partisan lines to enable philanthropy to succeed and address the diverse needs across the nation and world.
In addition to Osili and Cardinalli, other witnesses included: Susannah Morgan, CEO, Oregon Food Bank, and C. Eugene Steuerle, Ph.D., Co-Founder of the Urban-Brookings Tax Policy Center, The Urban Institute’s Center on Nonprofits and Philanthropy, and Co-Founder, ACT for Alexandria, a community foundation