Fundraising Update

Welcome to Fundraising Update. This week, we look at how ‘rage giving’ is boosting donations to some nonprofits following Trump’s win. Plus, we explore pivotal questions for nonprofits under a second Trump administration.

I’m Jie Jenny Zou, fundraising reporter at the Chronicle of Philanthropy. If you have ideas, comments, or questions about this newsletter, please write me.

Rage giving is back, writes my colleague Rasheeda Childress. The phenomenon, which was first identified and got its name after Donald Trump was elected in 2016, is happening again in the days after his re-election. Donors are opening their wallets to support charities whose missions are likely to be at risk during the new administration.

“We’re just a couple of days in, but we’ve seen a significant uptick in giving,” says Abbie Dillen, president of Earthjustice, an environmental law nonprofit.

What Earthjustice is seeing is not unexpected, says Jennifer Taylor, co-author of the book Rage Giving, which studied charitable giving that occurred after Trump was first elected.

Chronicle Illustration; Getty Images/iStockphoto

This type of giving is associated with people feeling an emotion that is “in the anger, rage area of the Geneva emotion wheel,” Taylor says. “Their goals are twofold: first to alleviate those feelings — channel them in a functional way into something productive and constructive. The second goal is that people really see small gifts to philanthropy as a viable form of civic engagement.”

While some rage giving happens spontaneously, much of it is because nonprofits ask, Taylor says. Organizations whose missions put them at odds with the new administration’s goals align with emotional needs of rage donors, she says. As a result, those organizations have the opportunity to connect with new supporters or reinvigorate lapsed ones. With the right type of communication, nonprofits can turn those in-the-moment donors into steadfast supporters.

It’s still early days after the election, and the charities the Chronicle spoke with said they weren’t sure how big of a bump they would get from the election. If 2016 is a predictor of future performance, then the bump could be big. Numbers vary by researcher, but one study found that liberal-leaning charities saw a 155 percent bump in contributions after the 2016 election.

A survey of 14,000 donors, conducted by Cygnus Applied Research in early 2017, found that 33 percent said they increased their donations to charities due to election results, says Penelope Burk, president of Cygnus.

“It definitely did have an impact then,” she says. “Whether it will have a similar impact this time, I’m not sure.”

To learn more about rage giving, read the full story.

— The number of American taxpayers that itemize their taxes, rendering the majority of donors ineligible for tax breaks on their gifts.

President-elect Donald J. Trump and Congress could change the calculus on a host of issues of critical importance to the nonprofit world, writes my colleague Ben Gose. As the nation waits for word on whether Republicans will have full control of Congress — or whether Democrats will control the House of Representatives — the Chronicle previews key questions and what’s at stake.

Should all Americans get a tax deduction for their charitable gifts? Only about one in 10 taxpayers itemizes their taxes, which means most donors get no tax break from their giving. That is a contributing factor in the decline in the number of everyday donors— an issue that draws bipartisan concern, as the mega-wealthy increasingly set the tone in the philanthropic sector. During the pandemic, non-itemizers were allowed to deduct a small amount. Independent Sector and a broad coalition of advocacy organizations will push to see that provision revived and expanded when Congress rewrites federal tax policy next year.

Is the 1969 law governing foundations still effective? The 1969 Tax Reform Act imposed a mandatory payout rate for the first time, amid concern that wealthy individuals were hoarding wealth in foundations without paying taxes. The current environment — full of concern about the influence of dark money and massive endowments — has again sparked populist ire.

Some experts believe Congress may impose new regulations on foundations next year, when expiring tax cuts are expected to spark a re-examination of the tax code. Vice President-elect J.D. Vance, a critic of large foundations and private colleges that he considers liberal, once proposed requiring institutions with endowments worth more than $100 million to pay out 20 percent of the value each year. Other critics have called for taxing some forms of nonprofit revenue or endowments and examining whether certain types of charities, such as nonprofit hospitals, are deserving of tax-exemption. Congress will also look to rein in foreign donors who move funds between foundations, 501(c)(4)s, and political action committees.

For more, read the full story.

• Next-Generation Donors Find Their Way, Plus Research on Social Giving. Nonprofits have often looked for ways to cultivate and connect with the next generation of donors, I wrote recently. New research that studied young philanthropists at family foundations offers some clues on how other nonprofits can engage their next-gen donors.

  The research focuses on work nonprofit consultancy 21/64 conducted through its Grand Street program, which started in 2003 and focused on next-generation donors. The term can refer either to younger donors who will inherit wealth or are expected to take part in family-driven philanthropy or to up-and-coming donors between the ages of 18 and 40.

  “There really hadn’t been spaces for the next generation to convene on their own,” Sharna Goldseker, executive director at 21/64 said of the Grand Street program, which initially brought together a group of next-gen donors, mainly in their 20s. “It was a significant shift in the story of philanthropy.”

  At the time, research about the impending “Great Wealth Transfer” had just begun. Financial experts have since estimated that younger generations stand to inherit as much as $72 trillion from Baby Boomers over the next 20 years. The new report looks at 20 years of the Grand Street program, which is structured as a series of off-the-record retreats that equips next-gen donors with tools and advice for carving out their own path in the philanthropic community.

  To learn more about Grand Street, plus new research on social giving, read the entire story.
  

Zita Ezpeleta and her husband, Kewsong Lee, gave and pledged $3 million to the School of American Ballet, which is affiliated with the New York City Ballet. Two million of the gift will go towards the endowment of the school’s dual position of artistic director and chair of faculty while the remaining $1 million will support improvements to the school’s Lincoln Center headquarters in Manhattan.

Ezpeleta is an attorney in New York who has served on the school’s Board of Directors since 2011. Kewsong Lee served as a co-CEO of Carlyle Group, a private equity firm in Washington from 2017 to 2022.

For other notable gifts, read my colleague Maria Di Mento’s Gifts Roundup column. To learn about other big donations, see our database of gifts of $1 million or more, which is updated regularly and has data going back to 2000.

A How-to for Bringing Equity Into Evaluation. The Annie E. Casey Foundation has published a guide to help foundations and their grantees make evaluations more equitable.

Funding the Resistance Is Not a Winning Strategy. Here’s What Is (Opinion).Billions spent fighting Trumpian populism hasn’t worked. Practicing a pluralistic approach to grant making will.

Some of the largest donors to Kamala Harris and progressive causes are concerned about retaliation from the incoming Trump administration, according to a new article in Semafor. Leaders of several progressive nonprofits convened last week to discuss the possibility of being investigated or facing other forms of blowback. At least one group that received a gift from LinkedIn Co-founder Reid Hoffman has even consulted with lawyers about potential issues.

The article notes that Trump has made documented threats against over 100 individuals he considers the “enemy from within.” Nonprofit leaders are split over how credible Trump’s threats are with some considering the attacks a form of political hyperbole while others are in “outright panic,” according to the article. (Semafor)