OPINION:
The controversy led the news for weeks, though probably not in your preferred news source. My small town of Lexington, Virginia, wanted to sell land to a developer who would be leveling the building used by two vital food-distribution charities to build condos.
It was a battle between new development and vital continuity. Who emerged as the story’s hero? Charitable giving. Several donors stepped up with donations to the food-assistance groups, enabling them to purchase the property outright and secure their role in the community for years to come.
The nationalization of news means it’s more common to read about the splashy philanthropy of millionaires and billionaires. The mega-gifts that make the headlines, though, run the risk of demoralizing those of us for whom a major gift is a $1,000 or even $100 check.
More than simply undermining the giving impulse, a focus on mega-gifts sparks the regulatory impulse of legislators. Several pieces of legislation floating around Washington and some state legislatures threaten to chill giving in various ways.
The ACE Act (originally introduced in the U.S. Senate as S. 1981 and more recently gained a companion version in the House) proposes to “accelerate giving” but instead puts unnecessary guard rails around small family foundations, which so often are integral to local community giving. The proposal also weakens donor-advised funds, increasingly a preferred way for midsize donors to manage their giving.
Even the various voting rights bills included proposals threatening to undermine donor privacy. Such changes threaten to make donors giving to causes they care about — but that may be politically or socially unpopular — vulnerable to attack. In the end, that will hurt giving.
Generous donors giving checks with multiple commas in the dollar amount are critical to our philanthropic infrastructure. The more than $450 billion given to nonprofits each year doesn’t come from $50 checks alone.
However, such gifts make it easy to overlook small- and medium-dollar donors. We do so at our peril. These smaller-dollar donors form the backbone of support for the job-training organizations, local playhouses and independent schools all around us.
Indeed, a $100 or $1,000 gift to our local food bank will have a far brighter impact on the lives of your community than a $100 million gift to a well-endowed university.
Prior to 2020, the nationwide trend line for total charitable giving went steadily upward, yet much of that was driven by the extremely wealthy. Philanthropy in 2020 bucked that trend. The health and economic crises of the pandemic highlighted urgent close-to-home needs. Gifts ranging from $100-$500 increased 11% in 2020. Overall giving seems to be strong for 2021 as well.
Now the challenge is, how do we encourage continued growth in giving at every level?
We need donors, nonprofits and government to all do their part. Donors who increased their giving in the past two years should maintain and even grow that support.
Whether delivering meals to the needy, upskilling workers, raising awareness of problems or pointing people toward solutions, nonprofits do so much to move us past the challenges of the pandemic — as well as the bickering about it.
Supporting these groups in turn supports our community, encouraging neighbor to help neighbor instead of waiting for government entities to come help.
The nonprofit community can encourage giving by broadcasting the stories of success from the past two years.
Moreover, groups should show how those victories can be leveraged for the future. Need-based philanthropy is dead. Donors increasingly support causes for impact, not out of obligation. Fortunately, most nonprofits have a terrific story to tell. Tell it.
As for government, it should avoid complicating giving with new regulations. Proposes such as ACE Act theoretically take aim at large givers and unproven abuses, but small- and medium-sized donors will be hit hard. That, in turn, renders giving to local community giving as collateral damage.
Donor-driven ideas saved the food assistance organizations in my community. Such decisions are playing out daily all across the country. Lawmakers hundreds of miles away and billionaires across the country can’t step in to locally solve problems they don’t know exist. We as donors in those communities can. Let’s encourage each other to keep it up.
• Peter Lipsett is vice president at DonorsTrust.
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