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As nonprofit leaders, you’re facing a pivotal time in philanthropy. The sector is experiencing a shift, as donors increasingly prefer non-cash contributions like stock, cryptocurrency, and donor-advised funds (DAFs). These giving forms offer tax efficiency and align with a fast-paced, tech-savvy world.
A massive generational wealth transfer has also begun and will reshape the philanthropic landscape for decades. Baby Boomers are set to pass down trillions of dollars to Gen X and Millennials—generations fluent in digital financial transactions. As this transfer progresses, nonprofits will see an evolution in how generosity is expressed, bringing both opportunities and challenges.
In this article, we’ll explore the top non-cash giving trends of 2024 and discuss how to position your organization to thrive.
1. Stock Donations: A Growing Source of Generosity in a Volatile Market
Stock donations have become one of the most popular forms of non-cash giving, particularly for high-net-worth individuals. Despite market fluctuations, stock gifts remain attractive because of the associated tax benefits. Donors who give appreciated stock avoid capital gains tax while securing a charitable deduction based on the current market value.
Incorporating stock donations opens up an enormous asset class for nonprofits, which can drive significant major gifts. According to a 2023 Gallup poll, around 61% of U.S. adults hold stock, and each year, over $21 billion in stock is donated to charities across the country. This is a tremendous opportunity for nonprofits to engage with a broader pool of potential donors and tap into high-value contributions.
While stock donations can be given any time of year, they tend to peak at year-end. The primary reason is the strong tax advantages they offer, allowing donors to reduce capital gains tax exposure, making this an appealing and financially efficient giving option. Consequently, nonprofits often receive larger stock gifts during this period, as donors seek to maximize tax benefits while supporting meaningful causes.
Key Metric: In 2022 alone, the National Philanthropic Trust reported that donor-advised funds processed over $8 billion in non-cash contributions, which included stock, real estate, and private equity.
2024 Trends to Watch:
- Increased Education for Donors: More nonprofits are prioritizing donor education on stock donations, especially as economic uncertainties drive individuals to explore tax-efficient giving options.
- Frequent, Incremental Stock Gifts: Instead of making large, one-time gifts, donors are opting for smaller stock donations. This trend aligns with a “give as you go” mentality, suitable for volatile markets.
- Brokerage Account Partnerships: Nonprofits that establish brokerage account partnerships for seamless stock transfers have experienced increased donor engagement, as these arrangements reduce donation friction.
Action Items for Nonprofit Leaders:
- Set up a brokerage account dedicated to stock donations. (we can help!)
- Regularly communicate stock donation tax benefits to your donors.
- Partner with financial advisors to ensure seamless stock transfers and capture these valuable gifts.
2. Crypto Philanthropy: Embracing Digital Assets in Charitable Giving
Cryptocurrency has evolved from a niche asset to an integral part of modern philanthropy. While crypto’s market is highly volatile, its tax advantages and appeal to younger, tech-oriented donors have encouraged adoption in the nonprofit space. Donors who contribute appreciated crypto assets avoid capital gains tax and receive a tax deduction, similar to stock donations.
Key Metric: Fidelity Charitable reported that in 2022, crypto donations reached over $330 million, marking a 1,500% increase in just a few years.
2024 Trends to Watch:
- Regulatory Compliance: Nonprofits accepting crypto are focusing on compliance and due diligence, as regulatory scrutiny around digital assets increases.
- Dedicated Crypto Donation Platforms: Platforms like The Giving Block facilitate crypto donations, making it easier for nonprofits to process these gifts and for donors to give securely.
- Younger Donors Leading the Charge: With Millennials and Gen Z increasingly interested in crypto philanthropy, nonprofits can attract new, tech-driven donors through digital engagement strategies.
Action Items for Nonprofit Leaders:
- Consider setting up a third-party crypto donation platform or direct wallet to receive crypto contributions.
- Train staff and board members on crypto basics to address any concerns and misconceptions.
- Develop tailored marketing to engage younger audiences with clear instructions on how to give crypto and tax advantages.
3. Donor-Advised Funds (DAFs): The Powerhouse of Philanthropy
Donor-Advised Funds (DAFs) have become a dominant vehicle in philanthropy, particularly for high-net-worth donors. With more than $160 billion in DAF assets available as of 2023, these funds offer flexibility and control, allowing donors to contribute a variety of assets, including cash, stock, crypto, and real estate.
Key Metric: As of 2023, DAFs accounted for over 12% of all U.S. charitable giving, representing approximately $72 billion in grants annually.
2024 Trends to Watch:
- Increase in Non-Cash Contributions to DAFs: Donors are increasingly contributing non-cash assets like stock and crypto to DAFs, creating a broader range of potential grants to nonprofits.
- Year-Round Grantmaking: While end-of-year giving remains popular, DAF holders are beginning to recommend grants throughout the year, especially in response to urgent needs.
- Corporate Matching Programs: Some corporations and foundations are offering DAF gift-matching, providing an incentive for donors to recommend more grants to nonprofits.
Action Items for Nonprofit Leaders:
- Develop a strategic DAF outreach program to educate donors and establish your organization as a recommended recipient.
- Encourage your board to develop relationships with foundations and corporations offering DAF matching.
- Communicate to donors the benefits of using DAFs to support your organization consistently, even in economic uncertainty.
4. Planned Giving: Integrating Non-Cash Assets for Long-Term Impact
Planned giving is experiencing renewed interest as donors explore non-cash assets, including stock, real estate, and private equity, in their estate plans. This trend reflects a broader shift toward “impact now” philanthropy, as more donors choose to make significant gifts during their lifetime.
2024 Trends to Watch:
- Blended Gifts Combining Cash and Non-Cash Assets: Many donors are now opting for blended gifts that offer both immediate and long-term impact, combining cash with non-cash assets like stocks or real estate.
- Life Income Gifts: Donors are increasingly interested in options like charitable gift annuities or charitable remainder trusts, which allow them to support nonprofits while retaining an income stream.
- Cross-Generational Wealth Transfer: The generational wealth transfer is projected to span the next 30 years, during which Baby Boomers will transfer approximately $84 trillion to Gen X and Millennials. Engaging both current and future generations can lead to lasting support.
Action Items for Nonprofit Leaders:
- Highlight planned giving options that integrate non-cash assets, such as charitable remainder trusts.
- Host informational events on planned giving options, inviting donors to include family members in the discussion.
- Partner with financial advisors to educate donors about blended gifts and other sophisticated giving vehicles.
5. Leveraging Technology to Capture the Next Generation of Donors
As the generational wealth transfer progresses, fiscal resources will shift to people who grew up managing finances digitally. Millennials and Gen Z have a strong preference for online and mobile platforms for financial transactions, and their approach to philanthropy will reflect this digital fluency.
Key Metric: According to Blackbaud’s Charitable Giving Report, online donations grew 9% year-over-year from 2022 to 2023, highlighting the increased importance of digital giving options.
2024 Trends to Watch:
- Digital-First Donation Platforms: Nonprofits that adopt platforms for digital donations—including crypto and stock donation options—will appeal to this new generation of donors.
- Automated Reporting and Acknowledgment: Younger donors expect real-time updates and digital tax receipts, which automated donation platforms can provide, streamlining the experience for both nonprofits and donors.
- Data-Driven Engagement Strategies: Leveraging donor data to tailor outreach will be essential in building and maintaining relationships with the next generation of philanthropists.
Action Items for Nonprofit Leaders:
- Integrate digital donation platforms that support a range of non-cash giving options.
- Use data analytics to personalize communications with donors based on their giving habits and preferences.
- Simplify the online giving experience and ensure your website is mobile-friendly to appeal to digital-first donors.
Conclusion: Preparing for a Digital-Driven, Non-Cash Philanthropic Future
The 2024 philanthropic landscape is defined by non-cash giving, digital tools, and an unprecedented wealth transfer that will reshape charitable giving for generations. As Gen X and Millennials assume control of major assets, the way they express generosity will evolve, impacting nonprofits that are prepared to embrace new technology and giving vehicles. This is a defining moment in philanthropy, one that nonprofits can seize by being forward-thinking, tech-savvy, and donor-centered.
Align your organization with these trends, and you’ll be well-positioned to engage the next generation of philanthropists, ensuring sustainability and impact for years to come.
Sources
- National Philanthropic Trust 2022 Donor-Advised Fund Report.
- Fidelity Charitable 2022 Giving Report.
- National Philanthropic Trust 2023 Giving Summary.
- Federal Reserve, Wealth Transfer Study.
- Blackbaud Charitable Giving Report, 2023.
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