The U.S. was hit hard by the COVID-19 pandemic and saw a change in the philanthropic face of the nation. The past decade has seen a shift in the way philanthropy is approached in the U.S., with the middle-classes reducing the number of donations they make each year. Before the 2008 economic downturn, the philanthropic sector was dominated by the middle-class. The changes in the world following the last recession are driving the changes in charitable donations we have seen recently.
The changes in philanthropy seen in the U.S. reflect the rise of the billionaire class. A small number of donors are taking on the role of philanthropists and giving more than in the past. A small number of philanthropists are giving more than ever before as the middle-class reels from the impacts of several economic problems. Forbes points to the favorable tax codes offered to the wealthiest in the U.S. as a reason for their consistent giving over the last decade.
The fact that a small few are giving to charity and driving the philanthropic conversation. Tax codes in the U.S. have changed recently to allow the top one=percent of earners to receive tax breaks totaling 30 cents per dollar to be received. In comparison, the middle-class donor gets a rebate of between one and three cents for every dollar donated. That is not to say the impact of the tax breaks is the only reason for the rise of the billionaire donor, but it has been one of the biggest influences of recent times.
The rise of technology as part of the philanthropic sector has changed the way giving is completed. For the wealthy to donate to charity, giving assets away has always proved more efficient than converting to cash. Technology is making it easier for assets to be signed over to charities to assist in limiting the tax obligations of the wealthiest in the world.
Exponent Philanthropy explains the billionaire philanthropist is changing the way charities approach their programs. Wealthy philanthropists are looking for results to drive their continued investment in a program. The success of a program is not judged by the impact on a community but rather by the goals of the philanthropist.