Fundraising Update

Welcome to Fundraising Update. This week, we examine the Great Wealth Transfer — whether it’s real and what it means for nonprofits. Plus, colleges and universities collected $61.5 billion in fiscal year 2024, according to a new report.

I’m Rasheeda Childress, senior editor for fundraising at the Chronicle of Philanthropy. If you have ideas, comments, or questions about this newsletter, please write me.

Thanks to our sponsor DonorPerfect for supporting Fundraising Update.

For decades, financial firms have been talking about the Great Wealth Transfer — when the oldest generation passes on their wealth to children and charities. The latest estimate from financial research firm Cerulli Associates predicts that $18 trillion will flow to charity over the next 24 years, reports my colleague Ben Gose.

The “great” part of the transfer alludes to the size and accumulated wealth of the baby boom generation. Nearly 4.2 million Americans will turn 65 this year, the high point in a phase some experts call Peak 65.

But anyone who’s been in the nonprofit world a while may recall a rosy projection for an earlier wealth transfer that didn’t pan out.

What’s different this time? A lot, say the bulls. The baby boom generation is bigger and will be richer than the silent generation that preceded it. Baby boomers are the first generation in which two-income households were the norm, and they had fewer children than older generations — all of which may mean more money will flow to charity.

Nathan Lindstrom for the Chronicle

“The great wealth transfer was overblown in the 1990s,” says Patrick Schmitt, a co-founder of FreeWill, a provider of will-making software that nudges people to give to charity. “It’s really starting now.”

Throwing some cold water on all the optimism is the scholar regarded by many as the foremost academic expert on planned giving — Texas Tech’s Russell James. The financial projections by Cerulli and other financial firms are long on hype, he argues.

“They all just look for the biggest numbers they can put in their slide decks,” James says. “This is an area where people are much more interested in fantasy than reality.”

The stark wealth inequality in America means that most of the transfer will occur among the uber-rich, James says. And — at least at the outset — few of the transferred dollars will filter down to everyday charities. Instead, the funds will primarily go to private foundations, donor-advised funds, and the large institutions that have traditionally locked down the biggest gifts, such as universities and hospitals, he says.

“It’s a misunderstanding that the transfer of wealth is automatically going to be going to the public charities that we are familiar with,” James says.

But even James agrees with many others that the number of bequests is entering a long uptrend, providing a unique opportunity for charities to help secure their financial future.

For more on the potential of the Great Wealth Transfer for nonprofits, read the rest of Ben’s article.

$61.5 billion

— Amount donated to colleges and universities in the 2024 fiscal year, according to the Voluntary Support in Education Survey

Donations to colleges and universities were up 3 percent, adjusted for inflation, in fiscal 2024, which ran from July 1, 2023, to June 30, 2024, for most institutions. Donors gave $61.5 billion during the period. The data comes from the Voluntary Support of Education Key Findings 2024 report, which was conducted by the Council for Advancement and Support of Education. After donations fell 5 percentin last year’s report, the increase in giving was a welcome boon.

“That’s very heartening and affirming,” Sue Cunningham, CEO of CASE, told me. “Those who choose to be philanthropic, whether they’re individuals, foundations, or corporations, are determined to invest in higher education because they’re appreciative of the huge impact that higher education has on people’s lives.”

The Key Findings report shares top-line details of the VSE, which surveyed 736 colleges and universities; the full report with additional charts and details will be released in April. Another highlight: Contributions from donor-advised funds were up 12.1 percent, and gifts from DAFs accounted for 10.6 percent of all giving to higher education.

“Donor-advised funds are clearly growing in terms of use as an investment tool philanthropically for donors,” Cunningham says. “They’re using them to be more strategic about their giving.”

Foundation giving, according to the report, increased 13.3 percent, and gifts from alumni jumped 7.5 percent. One category that declined was corporate gifts, which were down 7.3 percent.

For more on the VSE survey, read my entire story.

• DAF Sponsors Can Boost Giving. The sponsoring organizations of donor-advised funds can take action to improve giving from the funds, according to a new report released by the DAF Research Collaborative.

  The National Survey of Donor Advised Fund Managers asked DAF sponsoring organizations about their policies and practices. DAFs can be sponsored by community foundations, national organizations (like Fidelity Charitable or the National Philanthropic Trust), or religiously affiliated organizations (like Jewish Federations or foundations). Of the 128 sponsoring organizations that responded, 86 percent were community foundations.

  More than two-thirds of respondents (68 percent) said their procedures and policies related to inactive accounts “successfully reactivated grant making.” Additionally, 75 percent of sponsors said “helping donors be active in their grant making was a very or extremely important priority.”

  For more on DAFs and research about year-end 2024 giving, read my full research roundup.

Gail and Rob Cañizares donated $6.8 million to Vanderbilt Law School. The funds, given via their Anbridge Charitable Fund, will create the Gail Anderson Cañizares Innocence Clinic, which will operate as a course for second- and third-year law students to exonerate wrongfully convicted people in Tennessee. The Tennessee Innocence Project will partner with the law school to identify cases for the clinic to investigate.

Gail Cañizares graduated from Vanderbilt in 1974. She has volunteered with the Innocence Project for more than 15 years. Rob Cañizares retired in 2011 as president of MSA International, a manufacturer and supplier of safety equipment used in construction, the military, oil and gas production, and other hazardous industries.

For other notable gifts this week, read my colleague M.J. Prest’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.

Development Director Is a Hot Job. What You Need to Snag This Position. Fundraisers with their eye on the job should develop their skills building one-on-one relationships with donors and managing people.

Want to Encourage More Wealthy People to Give? Here’s a Solution. (Opinion) Foundations should share their deep expertise on issues and causes to help aspiring philanthropists move their money off the sidelines.

Economy’s Impact on Giving. Two articles are discussing the impact of the economy on giving. A recent piece in Fortune notes that wealthy donors are unlikely to step up and give more in an economic downturn.

“We’re hearing the extreme in terms of anxiety. We’re hearing [from] people who think this is the end,” Susan Hirshman, director of wealth management for Schwab Wealth Advisory, told Fortune. “If you’re very uncertain, and you just want to keep things as they are, you may reduce [donating].”

Across the pond in the U.K., a survey by the Charities Aid Foundation found that fewer people are donating money to charity because of tight household budgets, the BBC reports. Like in the U.S., charities feel like they’re competing for dollars among a smaller pool of charitable donors — and with more charities thrown into the mix.

“I’ve been fundraising for 20 years, and it has never been harder than now,” Nick Connolly, chief executive of EveryYouth, a network of youth homelessness charities, told the BBC. “Where we used to compete with 20 charities, we’re now competing with 100.” (Fortune and BBC)