As we enter the holiday season, Americans are concerned about the economic outlook. Most economists share these concerns, with inflation running at 40-year highs, the Federal Reserve raising interest rates at a near record pace, and nearly 70% of forecasters predicting a recession in 2023.
Every year—but even more so in tough times—our country’s nonprofit sector plays a crucial role in ameliorating economic hardship. The nation’s 1.5 million nonprofits employ nearly 10% of all Americans and are supported by over $470 billion in annual giving. Now more than ever, it is time for those of us who can to step up and support them. And many of us are. In fact, 59% of Fidelity Charitable donors say they’re considering giving more this year—despite economic concerns.
Give an inflation adjustment: Nonprofits were already stressed with COVID relief ending, workforce challenges, and increasing demand for their services. Add inflation for food, energy, and housing on top, and many nonprofits are at a breaking point—just at a time when they are needed more than ever.
How can you help? Top off your past year’s donations with a year-end cost-of-living adjustment. I'm delighted that the Fidelity Charitable Trustees' Initiative (FCTI) did just that for its multi-year grantees. A grantmaking program separate from the donor-advised fund program focused on supporting social sector infrastructure, FCTI distributed $9 million in the last fiscal year.
If you can’t manage an inflation adjustment for all your donations, start with those nonprofits with the smallest budgets or those that have less access to other resources, particularly those providing direct services to people in need. On my list where I live is Mavericks Community Foundation and Stanislaus Community Foundation. Community foundations have a good feel for local nonprofits' capabilities and needs.
Leverage your network: Give unrestricted donations to your favorite high impact charities, tag them on your favorite social network, and invite your friends to give as well. Challenge yourself and your friends to make the gifts automatic recurring grants. Research shows social behavior encourages more participation, with a quarter of donors reporting making a donation after hearing about the cause on social media. Share your support—it works!
Engage your family: If you volunteer, bring your children (or grandchildren) along to participate. Let them see the needs and the power of helping. Share with them where you make your donations. Better yet, make giving part of your family traditions around the holidays or any time of year. Encouraging your children, whether they be young or adult, can create a powerful multigenerational bond.
Americans have an amazing philanthropic history. We give generously, even more so in times of need. Now is one of those times. Please show your support this holiday season.
Fidelity Charitable Board of Trustees Chair
Lenny Mendonca has been a Fidelity Charitable Trustee since October 2015 and Chair since March 2022. He was the Chief Economic and Business Advisor to Governor Gavin Newsom of California and Chair of the California High Speed Rail Authority. He is a Senior Partner Emeritus of McKinsey & Company and a lecturer on inequality at the Stanford Business School.
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