Small donors boost our communities
The controversy has been in the headlines for weeks, but probably not in your favorite news source. My small town of Lexington, Virginia wanted to sell land to a developer who would level the building used by two vital food distribution charities to build condos.
It was a battle between new development and vital continuity. Who became the hero of the story? Charity donation. Several donors have stepped up their donations to food aid groups, allowing them to purchase the property directly and secure their role in the community for years to come.
The nationalization of the news means it’s more mainstream to read about the booming philanthropy of millionaires and billionaires. The headline-grabbing mega-gifts, however, risk demoralizing those of us for whom a major gift is a check for $1,000 or even $100.
More than just undermining the impulse to give, the focus on mega-donating is triggering the regulatory push from lawmakers. Several pieces of legislation floating around in Washington and some state legislatures threaten to chill donations in various ways.
The ACE Act (originally introduced in the U.S. Senate as S. 1981 and more recently in a complementary version in the House) proposes to “expedite donations,” but instead places unnecessary guardrails around small family foundations, which are so often an integral part of the local community. giving. The proposal also weakens donor-advised funds, a way increasingly favored by midsize donors to manage their donations.
Even the various suffrage bills included proposals threatening to invade the privacy of donors. Such changes threaten to make donors who give to causes close to their hearts — but which may be politically or socially unpopular — vulnerable to attack. Ultimately, it will hurt to give.
Generous donors giving checks with multiple commas in the dollar amount are essential to our philanthropic infrastructure. The more than $450 billion donated to nonprofits each year doesn’t just come from $50 checks.
However, such donations make it easy to overlook small and medium donors. We do so at our own risk. These small donors form the backbone of support for the vocational training organizations, local theaters and independent schools around us.
Indeed, a donation of $100 or $1,000 to our local food bank will have a far greater impact on the life of your community than a donation of $100 million to a well-endowed university.
Prior to 2020, the national trend line for total charitable giving was steadily increasing, but much of it was driven by the extremely wealthy. Philanthropy in 2020 has bucked this trend. The health and economic crises of the pandemic have brought to light urgent needs close to home. Donations ranging from $100 to $500 are up 11% in 2020. Overall donations also look strong for 2021.
Now the challenge is how do you encourage continued growth in giving at all levels?
We need donors, nonprofits and government all to do their part. Donors who have increased their giving over the past two years should maintain and even increase this support.
Whether it’s delivering meals to those in need, upskilling workers, raising awareness of problems, or directing people to solutions, nonprofits do a lot to lift us up. challenges of the pandemic – as well as the disputes over it.
Supporting these groups in turn supports our community, encouraging neighbor to help neighbor instead of waiting for government entities to come and help.
The nonprofit community can encourage donations by sharing success stories from the past two years.
Additionally, groups should show how these wins can be built on for the future. Needs-based philanthropy is dead. Donors are increasingly supporting impact causes, not out of obligation. Fortunately, most nonprofits have a great story to tell. Say it.
As for the government, it should avoid complicating donations with new regulations. Proposals such as the ACE Act theoretically target large donors and unproven abuses, but small and medium donors will be hit hard. This, in turn, makes giving back to the local community collateral damage.
Donor ideas have saved food aid organizations in my community. Such decisions are played out daily across the country. Lawmakers hundreds of miles away and billionaires across the country cannot step in to locally solve problems they don’t know exist. As donors to these communities, we can. Let’s encourage each other to keep going.
• Peter Lipsett is Vice President of DonorsTrust.