It is better to give than to receive — unless you’re a charitable nonprofit that counts on the spirit of generosity during the holidays while trying to set itself up for what could be an uncertain new year.

As Kevin Dean, president and CEO of the Memphis-based Tennessee Nonprofit Network, said: “Putting a lot of eggs in that Christmas basket is smart — not all, but a lot — because this is when people are most charitable. People tend to give around Christmas and tax time. Those are the two big times for individual donors.”

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But that’s just Part 1.

Part 2, Dean says, is all about being intentional over the long-term.

“You have to have a good strategy,” he said. “You can’t just cast a wide net. A lot of family foundations are pulling back.

“It takes an average of 14 touch points before a person actually gives. They see your name in the press, get your newsletter … you have to have awareness.”

‘Make a budget’

The individual donor also needs to be intentional, especially this time of year, says Sutton Mora, executive vice president and COO of the Community Foundation of Greater Memphis (CFGM).

“There’s a lot of pressure in December to make decisions, and at that point probably not a lot of thought put into it,” she said. “We recommend waiting till January to determine your vision and the organizations you want to support.”

Having a plan, Mora says, can help on several levels.

“You make a budget for the household and travel, and it’s better to have a budget for giving. And it helps to say no if 18 people are asking you to give to a race/walk.”

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By setting January as the time to make a giving budget, Mora says, you also give yourself time to do research and involve family members, including the children.

“They can volunteer at a young age,” she said of the kids. “And you can start discussions about their own giving for when they’re older.”

A shift in giving locally

Of America’s 1.3 million charitable nonprofits, 97% have budgets of less than $5 million annually.

A full 92% operate with less than $1 million a year. And 88% spend less than $500,000 annually on their work.

Those numbers come from the National Council of Nonprofits, which identifies the “typical” nonprofit as community-based, serving local needs. This description applies to Memphis as well.

Donors gave $115 million through CFGM in 2022, Mora says, and historically from 9% to 11% of that total goes to religious organizations. That, however, does not begin to reflect all the religious giving in the city, she says, adding that most people choose to make those donations in their own name and directly to a church, temple or whatever the entity is.

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“If we look at how things have changed in Memphis over the last 10 years, prior to COVID, about 50% of our giving was education-related,” she said. “During COVID, there was a big flip to human services. Post-COVID, it has balanced out a lot but still a lot of human services.”

In the past year or so, there has been another change: As crime has become the front-and-center issue facing the city, more people have looked to invest in youth development, workforce programs and services aimed at helping people upon re-entry following incarceration.

Said Mora: “They’re reacting to the perceptions of the root causes of crime.”

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Unfortunately, individual donors also have been reacting to the elimination of the charitable deduction for non-itemizing taxpayers, also known as the universal charitable deduction, that expired a few years ago.

“Nonprofits lost $15 billion a year because we don’t have that tax deduction we used to have,” Dean said.

A bipartisan group of lawmakers introduced legislation, dubbed the Charitable Act, in the House of Representatives to restore and expand the deduction for non-itemizing taxpayers.

Brian Flahaven, chair of the Charitable Giving Coalition (CGC), has said the Charitable Act “acknowledges that federal tax law should extend to lower-income givers the same sort of charitable deduction it already grants to higher-income givers.”

The bill would increase the cap of the universal charitable deduction to one-third of the standard deduction, roughly $4,600 for individuals and $9,200 for joint filers. It would also make gifts to donor-advised funds eligible for the universal charitable deduction.

The CGC sent a letter to lawmakers supporting the introduction of the Charitable Act. Nearly 500 organizations representing all 50 states and the District of Columbia joined the letter. Dean says more than 100 Tennessee nonprofits, including many Memphis-based organizations, signed the letter.

They included, among others, ArtsMemphis, Boys & Girls Clubs of Greater Memphis, Kindred Place, Mid-South Food Bank, and Shelby Farms Park Conservancy.

‘Care and feeding’ of donors is vital

Twenty years ago, Dean says there was a “mentoring” season in charitable giving to nonprofits. Then there was an “equity” season. Now, there is a “systems change” season.

“We talk a lot about different types of giving, like giving for an immediate need would be relief giving — like after a tornado or to the food bank,” Mora said. “Giving for social reform is more long-term investment.”

All of it is more complicated than it once was.

Individual donations are down, while outsized philanthropic giving is up. An example of the latter is MacKenzie Scott, who said on social media that she gave $2.1 billion this past year to what Dean described as “systems change” missions. Scott’s donations were largely aimed at affordable housing, helping children, and educational and health programs.

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Dean says many Memphis nonprofits tend to put a lot of emphasis on “scaling up,” but that is not always the best move.

“Sometimes scaling down or staying where you are is the right move.”

Beyond that, any presidential election year has the potential to add layers of difficulty.

“There’s a thing called ‘spite philanthropy,’” Dean said, citing an example: “A few years ago, there were people giving money to Planned Parenthood in Vice President Pence’s name.”

In sum, it drives political, ideological, giving.

“It’s a tricky world to navigate because you have to be nonpartisan,” Dean said. “There are unintended consequences of being in the limelight of politics, whichever side you’re on.

“And nonprofits keep getting roped into these conversations and it’s not a place where anybody wants to be.”

Where they want to be, he says, is in a place of stability with an eye on growth, but a foot ready to pump the brakes when that’s a wiser decision in the moment.

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It all gets back to working strategically, but also understanding today’s present is tomorrow’s past.

“The care and feeding of your donors, that’s important,” Dean said. “But you also want to bring in new donors.

“There’s a lot of nonprofits in Memphis and they’re all asking for money at the same time.”