Donors Haven’t Disappeared

Your Donors Aren’t Broken

Each quarter, the Fundraising Effectiveness Project (FEP) tells the same depressing story: donor files continue to shrink, particularly at the grassroots level. Q1 2025 was no exception. But as Jason Lewis of Responsive Fundraising wrote yesterday on LinkedIn, “The data isn’t the problem... the problem is that the people gathering it are too afraid to go out on a limb and say what it might actually mean.”

Donors aren’t abandoning us. They’re being squeezed out economically—and erased by the way we measure generosity.

If we’re only counting what shows up in CRMs and overlooking this context, we’re not evaluating fundraising performance—we’re diagnosing the wrong problem with the wrong tools and offering the wrong solutions.

Small Donors Have Been Priced Out

It comes down to wealth inequality. The very rich are simply not paying their fair share. And “the Great Wealth Transfer” is in fact a transfer of wealth from the middle class to the wealthy. 

I’ve heard multiple presentations about the Great Wealth Transfer at planned giving and other fundraising conferences this year. But none of them focused on wealth inequality. Which is astonishing.

A history lesson.

Prior to 1980:

• Household incomes steadily rose.

• Top marginal tax rate was 70%

• Top 1% share of wealth was less than 30%

• Strong manufacturing sector and high union membership.

The 1980s/1990s:

• Top marginal tax rate dropped to 28% (then up to 40% in the 90s)

•  Globalization and industry deregulation

The 2000s:

• Wages stagnant or decreased

•  Economic crashes: dot com bubble; 2008 recession, and the pandemic

• Asset ownership skyrocketed among the top 10%

• Housing, healthcare, education costs explode

• Top 1% continue to pull away from the rest of the pack.

• Top marginal tax rate is 37%

And of course, the BBB and other economic “policies” of the current administration will crater the economic stability of non-wealthy Americans, new charitable tax deduction notwithstanding.

The U.S. middle class has shrunk from 62% in 1990 to just 50% in 2021, according to Pew. At the same time, the bottom 50% of American households now hold less than 3% of the nation’s wealth.

It explains why the biggest drop in giving, as the FEP Q1 2025 report confirms, is from donors giving under $100. Because they don’t have it to spare.

The CAF Giving in the U.S. (2025) report supports this: 60% of those who didn’t give in 2024 said it was because they couldn’t afford to. Only 10% cited lack of trust in nonprofits.

The real issue is capacity, not commitment.

Credit: Federal Reserve

We’re Not Losing Generosity. We’re Ignoring It.

Fundraising systems track what they’re built to measure. As Jennifer Harris, of JH Collective, Inc., pointed out in response to Jason’s post: “I’m not convinced the everyday donor is disappearing—I think our tracking is.”

And the CAF report backs her up. While only 0.97% of U.S. income was donated to charity in 2024 (below the 1.04% global average), 92% of Americans reported doing a good deed for someone else. Forty percent gave in-kind goods. And 87% helped someone they weren’t close to.

From crowdfunding campaigns to mutual aid and neighborhood support, Americans are still giving. We’re just failing to count it.

One trend that we’re seeing: an increasing share of legacy revenue is coming to charities from donors outside their files. These folks have a relationship with the charity or the mission – the charity just didn’t know it and never tracked it.

If your database can’t see generosity outside formal donations, then your data doesn’t reflect reality.

The Great Wealth Transfer Is an Illusion

Fundraisers have been touting the “Great Wealth Transfer” for 30 years, right about the time I got into the planned giving field. (Unfortunately, Shervish et al seem to have forgotten basic demographics.) With the Boomer generation aging, we’re hearing from every direction that it’s FINALLY here: Cerulli Associates estimates $124 trillion will be passed down by 2048, with nearly $100 trillion coming from Boomers and older generations.

The problem: more than half of that wealth will come from just 2% of households: The richest 10% of households in the US will be responsible for about two-thirds of the impending transfer. Within that, Cerulli Associates projects that the top 1.5% will account for 42% of transfers through 2045.

A major reason, according to finance reporter Molly Liebergall: “The most successful boomers were typically white and already rich, so they had money to invest in burgeoning real estate and financial markets, and they didn’t face housing discrimination.”

The CFA Institute notes that 80% of U.S. assets are held by just 20% of Americans, and only one in five Americans has received any inheritance. And the median inheritance for the bottom 90% is close to zero.

At the same time, wealthy donors have stockpiled assets in donor-advised funds, avoiding significant taxes but having no real incentive to grant it out. A recent Chronicle of Philanthropy article about the Giving Pledge noted that much of the funds promised were simply transferred to the donor’s own foundation or DAF.

Giving Is Still Strong, Shaped by Values and Social Norms

While economic capacity is shrinking for many, the motivation to give remains deeply rooted in American society—especially when donors feel connection and trust.

The CAF Report found that 77% of Americans engaged in some form of charitable behavior in 2024, and those who reported being influenced by social norms (such as setting an example or supporting their community) gave more of their income—1.29% vs. 0.80%.

And despite narratives about eroding trust, 84% of Americans say they trust local charities, and 69% trust national ones.

Donors want to give, especially when the cause is close to home (and that doesn’t always mean location), the messaging is values-aligned, and the relationship is strong.

We Need to Face Reality

Our systems are designed to quantify giving as if it exists in a vacuum. But people don’t give in a vacuum. They give amid financial anxiety, caregiving burdens, and the economic impact of injustice.

Donors Are Still Showing Up

The U.S. ranks 57th in how generous we think we are, according to the CAF report. But when we zoom in on community care, on in-kind gifts, on personal assistance, on mutual aid, we see that generosity is still alive. It’s just not where we’ve been trained to look.

And because this is my area of expertise:

Planned Giving Remains the Most Accessible Way for Everyday People to Make a Transformational Gift

Even if most people won’t inherit large sums or have extensive assets during their lifetime, many still have the capacity and the desire to make a planned gift, often through something as simple as a beneficiary designation on a retirement account or life insurance policy.

While wealth inequality means that the majority of your legacy revenue will come from a small number of higher net worth donors, it’s not just about dollars – it’s about community and movement building. We want to engage more donors in legacy giving regardless of the size of their gift.

Legacy Giving Is Values-Based

Planned gifts come from deep values alignment, not necessarily financial abundance (although of course, that helps. You have to have something to leave).

Planned Giving Is Where the Money Is

Yes, wealth is concentrated in an increasingly smaller percentage of the population. That’s not a reason to abandon planned giving. It’s a reason to lean in and refine how you target, message, and build relationships.

Wealthy donors may not respond to the same appeals as grassroots supporters, but many are deeply committed to causes, including the progressive and advocacy-based ones I work with, are open to legacy gifts when trust is high and impact is clear, and urgency inspires action.

Meanwhile, for the middle 50–70% of your donor base, offering low-barrier planned giving options (like naming your organization as a beneficiary on a 401(k)) is a no-cost, high-value way to engage them in meaningful legacy building.

Planned Giving Builds Donor Relationships That Outlast Financial Volatility

In times of economic uncertainty, planned giving is often the only way a supporter can make a significant gift. Lifetime giving may slow, but many donors still want to express their commitment, and this gives them a way to do so.

Planned giving donors are more loyal, more likely to advocate for your cause, and often become ambassadors who influence others to support you. Planned giving is not just about future dollars. It’s about deepening today’s relationships.

Approach Planned Giving with Equity in Mind

Most planned giving programs have historically centered wealth, whiteness, and tax avoidance as the primary strategy. We don’t need more of that. Today, we can reimagine planned giving as a tool for equity, embrace a broader view of legacy, and advance generational justice.

With intentionality, planned giving can become a space for movement building, not just wealth extraction (yes, my biases are clear).

Now Is the Time to Reinvest - Intelligently

The old assumptions about planned giving need to go. But the opportunity is there. Because in this era of inequality and economic precarity, planned giving may be the most inclusive, meaningful, and accessible way for your supporters to shape a better future.