New Year’s Resolution – Give Boldly, Give More, Give Now
New Year’s resolutions may be 4,000 years old, and probably just as old is the tradition of breaking those resolutions all too soon after January 1. Nevertheless, the turning of the calendar can be a moment to stop and take stock of the year that is ending, and to think about how you want to reset and reframe your work and actions in the coming 12 months. To list your aspirations and create a vision of how you want to be in the world.
Last month, we introduced our strategy and invited you to join us in a journey of reflecting, learning, and taking bold action. As we enter 2022, and you consider your resolutions, or simply ponder the question, “what’s next?” we note an opportunity for at least one bold step.
In 2020, charitable giving in the US reached $471.44 billion, a significant increase over 2019 in terms of dollars; but that giving only represented 2.3% of the 2020 gross domestic product (GDP), a percentage that has barely fluctuated over time. It’s still too early to know how much was given to charitable causes and organizations in 2021, but history suggests that it will once again be somewhere around 2.1% of the GDP.
And yet, despite ongoing uncertainty and turmoil in the US and the world at large, financial markets continued to perform exceptionally well, powering foundations’ investment performance, as measured by the FoundationMark GIV Index, to a 16.7% gain for 2021. FoundationMark projects that foundation have $1.3 trillion in total assets, up from just under $1 trillion in 2018.
There is more money than ever set aside in charitable vehicles. Foundation endowments are growing, the assets in donor-advised funds are reaching record highs, and the transfer of wealth from the Silent and Baby Boomer generations is underway, often with large transfers into family philanthropic entities. In moments of inflection and transition, or at a point in time like the new year, families have opportunities to pause and reflect on the values and principles that are most important to them, and to consider the philanthropic legacies they want to build. Part of those discussions should include the pace at which philanthropic dollars are to be spent.
Philanthropists, and foundations in particular, are often critiqued for taking slow, overly methodical approaches to giving, and for assuming that safe-guarding assets in endowments is so imperative that to spend more than the IRS-mandated minimum of approximately 5% is somehow imprudent. More and more, though, philanthropists, communities, and society at large are asking different questions: what can be done now? How can we get resources where they are most needed? What are we waiting for? There is a recognition that times have changed and that bolder actions and vision are required.
As you are thinking about meeting the challenges of our times, there are some specific questions you may want to consider:
- How should we balance questions of legacy, mission, and the urgent needs of now?
- Are there clear opportunities in our community or areas of interest for increased giving right now?
- Whose voices are currently informing our spending decisions, and who else might we include?
Our publication (produced in partnership with the Council on Foundations) Balancing Purpose, Payout, and Permanence: Strategy Guide can provide additional guidance.
Needs are everywhere and they are urgent. We are at tipping points around climate change, housing, education, health care, community development, and countless other issues. If you, your foundation, or other charitable vehicle were fortunate enough to have benefitted from the stock market or other wealth generation events last year, why not make a New Year’s resolution to give now, give boldly, and give more? If you start giving early in the year, this is one resolution you don’t have to break.
Miki Akimoto is the Chief Impact Officer at NCFP