How to end the 50-year stagnated era of charitable giving 

In 1970, the world was different. Push-button phones were new. Computers were too large to fit in homes, let alone in our pockets. Rocket innovation had just made human space travel possible, sharing a new perspective with the world via television. Now that same level of innovation is changing the world in a new way: tech-driven breakthroughs to bring about the greatest societal good impacts.

Unfortunately, one thing hasn’t changed since 1970: Charitable giving has remained stagnant at around 2.5% of our national GDP—factoring in both donations and volunteer hours.

However, ending the stagnant era of giving could have incredible effects even just by increasing the contribution percentage to 3% of the U.S. GDP. That extra 0.5% would raise or increase volunteering activity by more than $583 billion every year. That kind of money could bring monumental shifts including: approximately $177 billion could bring every American above the poverty line for a year; with approximately $79 billion, yearly public college tuition could be free.

So, why are we stuck?

The impact challenge

“Giving has always been a study of incentives—people want to understand how their contributions are making an impact,” said Frank Raymond, PhD, professor of economics at Bellarmine University in an original interview with Bonterra. Without a clear return on investment, donors are unsure of the results of their contributions, with 65% saying in a Fidelity Charitable survey that they’re concerned about the impact of their giving.

Raymond offers five reasons why consumers tend to give:

1. Perception of need
2. Discretionary income
3. Belief in the cause
4. Belief in the funds management
5. Perception that an organization can be sustained

In the face of a historical decline in trust in both the media and the political system, nonprofits can’t afford to lose the confidence of supporters and volunteers—especially the next generation of givers who will soon steward the future of social good.

We need a shift in charitable giving, and we need it now.

Build a centralized, social good ecosystem

Imagine it’s tornado season in Kansas, and after a particularly devastating storm, a chain reaction of need is set off:

1. A volunteer wants to find an organization coordinating a neighborhood clean-up.
2. A donor wants to fund a nonprofit providing shelter and essential services for displaced families.
3. A staff member at that same nonprofit wants to apply for a reconstruction grant.
4. Meanwhile, the nonprofit’s executive director wants to collect data on the aid provided for an impact report to gather more support for the next emergency. 

In today’s philanthropic landscape, volunteers, donors, grant writers, and impact reporters engage in silos, reducing transparency. In turn, this reduces the potential for greater future charitable giving.

Now imagine a comprehensive social good marketplace where fundraising, grantmaking, impact management, case management, strategic philanthropy, corporate giving, employee matching, and volunteerism all work together in a continuous virtuous cycle.People and organizations can stop searching endlessly for the best opportunities for giving, grants, or volunteer work. Instead, they’ll be intelligently matched. Why should an organization that needs a grant spend tens or hundreds of hours researching them, when their organization could be automatically matched to the precise grants they qualify for in seconds using technology?

Strengthen the ties

Individual donors and volunteers often want to give and do more, but finding the best organizations and opportunities can require heavy lifting—and this lifting can and should be done by technology. By strengthening the bonds between nonprofits and their supporters, every match lasts longer, becomes more sustainable, and more frequently converts one-time donors and volunteers into regulars that nonprofits can depend on.

As donors and volunteers better match with causes, the causes raise more funds. With more funds, they generate more impact. With more impact, they more easily qualify for better grants. With better grants, they can grow beyond the relatively limited size that most nonprofits can achieve on their own, with the current tools, technology, and systemic limitations of the charitable ecosystem. This is all amplified even further when connecting to corporate givers, family foundations, and employee matching programs.

Now, that tornado that hit Kansas is a different story under this continual cycle of virtuosity. The best matching volunteers (based on skills, interests, and geography, among other factors) are notified of local aid opportunities after the tornado hits. Matching donors (who support the community, specialize in disaster recovery, or have ties to the impacted population) are presented with a host of relevant nonprofits to fund. And a staff member is fed a slew of high-match grants that, with the help of integrated AI, they can quickly apply to and receive rapid funding.

Let’s start a giving revolution

This is just one example that focuses on an emergency response. The same technology could be applied to systemic issues like youth homelessness, maternal mortality, drug and substance abuse, and climate change. If we employ equitable technology to create a self-sustaining, virtuous cycle, we know exactly what the next century will look like: a world where people can bring more impact to the social issues plaguing our planet.

Scott Brighton is CEO of Bonterra.