What is the one thing that moves the charitable giving needle the most?  That was a question that I was recently asked by a columnist.  The answer is really easy… It’s the economy. 

When people are working and have disposable incomes, when companies are making profits, when foundation assets are growing… charitable giving is good.  There is a proven direct relationship between the health of the US economy and charitable giving. 

Ok then, what is it going to take to change the charitable giving equation?  That my friends is the biggest challenge. 

Today, our giving culture is settled and consistent.  In order to change the equation, the culture of giving in the US needs to change.  So, the question is what will make individuals, foundations, and corporations give a greater portion of their income and assets to support charitable causes?

Effectiveness?

Intuitively you would think that the most effective charities would get the most support but I’m sure that isn’t true.  As I look at the largest charitable organizations in the country I see an eerie similarity to government.  Many of the largest charities are bloated, inefficient, and unfocused on measurable results – but they are successful brand based fund raising machines.  When Americans begin to vote for effectiveness with their charitable dollars, the focus will shift away from big and toward smaller, focused and solution based organizations.  I am a proponent of measuring charitable effectiveness http://www.philanthromax.com/blogs/rob-mitchell/it%E2%80%99s-time-measure-nonprofit-effectiveness.  But, will giving grow or contract with greater effectiveness?  I think it will decline at first as the waste is purged from the charitable economy but will then begin to grow dramatically as donors recognize a direct relationship between their giving and measurable results.

Increasing Needs?

Bigger government means decreased charitable giving.  When health care needs are all provided by government, why give to support hospitals and health care?  When education becomes a government provided benefit for all, there is not a big need for scholarships.  When government support funds symphonies and museums, charitable gifts become less critical.  Theoretically, the greater the needs of society, the greater charitable giving support will be.  Perhaps the current contraction of government programs will create more giving… we’ll see.

Generational Change?

How will charitable giving of our children and grandchildren compare with ours?  If the answer is either more or less, the charitable giving equation will change.  If they end up being the same… the equation doesn’t change much.  The challenge then is how to inspire a new generational shift toward charitable giving enthusiasm.  My view is that this is not only the greatest challenge but the greatest opportunity to change the equation in a positive direction.  Let’s talk about how we can inspire a new platinum age of giving – this can change America for all of us in a positive way.