As they reshape philanthropy, the Millennial and Gen Z generations are prioritizing social impact, embracing technology, and seeking innovative ways to engage in their giving. A report, Shaping Tomorrow: How Gen Z and Millennials View Charitable Giving, based upon a survey conducted by Foundation Source, offers new insights.

These generations proactively seek opportunities to give back through a wide range of charitable activities based upon values and attitudes shaped by the tumultuous years during which they grew up. They are determined to play a role in communities they care about, believe they have an obligation to make an impact, and are ready to get to work!

Americans gave a record $557 billion in charitable gifts during 2023, according to estimates provided by the Lilly Family School of Philanthropy at Indiana University in Giving USA 2024, The Annual Report on Philanthropy for 2023, published by the Giving USA Foundation. Giving, on an inflation-adjusted basis, continues to recover after retreating from the all-time peak in 2021. In current dollars, giving from all sources was up 1.9% over the previous year but down 2.1% when adjusted for inflation.

Giving by individuals was estimated to be $374 billion, growing at an annualized rate of 4.3% over the last five years. An additional $43 billion came from individuals in the form of charitable bequest giving, an increase of 4.8% over the previous year. Corporate giving was up 3% to $37 billion. Giving by foundations was estimated at $104 billion, an annualized rate of 8.3% over the last five years. (Note, the Giving USA Report counts new contributions to donor advised funds as individual giving in the year of the contribution. Subsequent distributions from donor advised funds are not reported as foundation giving.)

A donor who inherits an IRA also inherits the ability to use the IRA to make qualified charitable distributions (QCDs), along with the limitations of this gift type.

To make a QCD contribution to charity, the beneficiary of the inherited IRA must be at least age 70 ½ at the time of the QCD. The age of the IRA’s original owner is not relevant, nor is the inheritor’s age at the time of the decedent’s death. The age that matters is that of the donor at the time they make the gift.

We get a lot of calls from clients regarding how to handle unclaimed payments related to life income gifts. We can help clients with the mechanical aspects in GiftWrap, of course, but the real challenges have more to do with policies and protocol. What is the right way to manage the payments that are due to people whose whereabouts are unknown? And how long is a charity – or an agent thereof – supposed to hold those funds before state laws dictate specific actions under abandoned property laws? We will go over those issues in this article.

Approximately 10,000 American baby boomers will turn 65 today. And tomorrow. And every day after that until 2030, when all baby boomers will be over the age of 65. This “gray tsunami” is predicted to set new firsts, including in the area of longevity. According to the Society of Actuaries, for a married couple who are currently both age 65, there’s a 50% chance that one spouse will live to be 90.

While longevity is on their side, the “longevity threat,” defined as outliving your retirement income, is not. Boomers started their careers at the dawn of the earliest 401k plans, and only 6% of boomers from the tail end of this gray wave have pensions (also known as a defined benefit plan). According to the Center for Retirement at Boston College, retirees who depend on a defined contribution plan, such as a 401k or 403b, are predicted to spend down their wealth more quickly than previous generations that depended on pensions. But they point out that the more a retiree’s resources come from “an annuity-like form” – including charitable gift annuities – the slower this cohort is expected to deplete their wealth. This is where a flexible deferred gift annuity (FGA) can step in to assist both the donor AND the charity with long-term planning.

A year ago, we published an article under the tongue-in-cheek title of “That’s Alright, It Was Only Money.” We wanted to update our understanding of historical performance results for traditional investment portfolios after the disastrous conclusion of the year 2022. We used the S&P 500 Index as the benchmark for stocks and Barclay’s Aggregate Bond Index as the benchmark for fixed income. In 2022, the former ended the year with a return of minus 13.01%, and the latter ended the year with a return of minus 19.44%. That meant our prototypical investment portfolio, invested 50% in stocks and 50% in bonds, saw a blended investment return of minus 16.23%. At the time, we pointed out that the aggregate performance for 2022 was actually worse than the aggregate performance for the Great Recession year 2008, which was “only” minus 15.88%.

And now, after another year in the books, but with quite different results in 2023, we ask the question, “Are we back to normal?” It’s probably a rhetorical question, and it begs a more specific question: “What is normal, anyway?” The S&P 500 return in 2023 was 24.23%, and the Barclays Aggregate Bond Index return was 5.53%, resulting in a blended return of 14.88%. It was a great year for investment portfolios holding traditional asset classes! The improved numbers should make everyone feel a little better off. Does it give us greater confidence to make the argument that over many years, a prudent investor strategy results in positive returns? Let’s take a look at the actual numbers.

You read that correctly. If it is still December 2023 and you are reading this, put it aside immediately. If not, Happy New Year! Glad you remembered to come back to read this in 2024.

If you did keep reading, why on earth would we tell you to stop reading the latest in planned giving updates and information?

Except for a couple of timely updates, for everything there is a season. As we head into the end of 2023, your job is to raise as many gifts as possible.

Does this sound familiar? “I have to write the lead article for our newsletter by Friday. Where are those photos I want to use for the testimonial? What format should we use for our legacy society lunch? Should we hold the event at all? I need to get approval to the edits to our gift acceptance policies. Are we getting everything we are entitled to from that bequest?”

Read your job description. What is your primary responsibility? Does your title include Planned Giving Officer, Development Officer, Advancement Officer, Major Gift Officer, or similar terms? The principal concern and obligation of such a position is to attract voluntary support to advance the mission of a non-profit organization. But often, support functions prevent fundraisers from focusing on the most important part of their job: fundraising.

Americans have extensive holdings of mutual funds representing significant portions of their investment portfolios, and many invest exclusively in mutual funds. This makes sense – mutual funds are easy to purchase, simple to understand, and they allow for continuous reinvestment of dividends and income earned by the mutual fund shares. As donors review their financial assets to determine which ones to use to fund charitable gift annuities, mutual funds present an obvious choice. As an added bonus: mutual funds are easy to value for gift purposes. The share price of a mutual fund is determined daily and published as the “Net Asset Value (NAV).” A donor uses this share price to value a gift of mutual fund shares. In contrast, a gift of publicly traded securities must be computed as the average of the high and low trading prices on the date of the gift.

But gift planners should be aware of some particular aspects of mutual funds that can cause significant complications in the process.

“Drop in Giving Among Steepest Ever,” screamed the Chronicle of Philanthropy headline. Other media piled on. The anodyne Associated Press led with, “Charitable Giving Drops, Only the Fourth Time in 40 Years.” And the redoubtable Barron’s reported, “Charitable Giving Falls for the First Time Since the Financial Crisis.”

Is this all just hyperbole? Or does it leave you wondering if it might be time to hang it up and consider a different career path? Don’t despair. At least not yet. The release last month of the 68th Giving USA Annual Report on Philanthropy (Giving USA Report), which reported a drop of 10.5% in giving last year, triggered the hoopla. The Report is an initiative of the Giving USA Foundation in collaboration with the Indiana University Lilly Family School of Philanthropy.

It’s too bad the Report has been reduced to a headline because, well beyond a simple scoreboard of giving, it also provides a wealth of useful information and interesting insights about the history of and trends in charitable giving in the United States.