Strategies for Continuing Philanthropic Efforts in Tumultuous Periods: A Handbook for Generous Contributors
In the face of market unpredictability, it's essential for both donors and nonprofits to adapt their charitable giving strategies to maintain a steady impact. Here are some effective approaches to navigate through turbulent economic times.
Firstly, utilizing donor-advised funds (DAFs) and diversifying assets can help manage giving strategically. DAFs, as a philanthropic planning and budgeting vehicle, offer advantages during uncertain times, allowing donors to budget and make plans for increased contributions during strong market performance, and maintain grantmaking during market downturns.
Secondly, prioritizing unrestricted gifts is becoming increasingly important during periods of uncertainty. Unrestricted gifts provide nonprofits with the flexibility to use funds as needed, ensuring they can respond effectively to evolving needs. In fact, nearly 48% of total grants issued in 2024 were unrestricted.
Thirdly, focusing on recurring donations and donor retention is crucial. By identifying likely consistent donors using data and AI tools, streamlining the donation process online, branding recurring donor programs for a community feeling, and maintaining consistent multi-platform communication, nonprofits can build loyalty and ensure a steady stream of donations.
For corporations, committing a portion of pre-tax profits from strong years into a diversified foundation portfolio can help offset giving in leaner years, smoothing out charitable spending across economic cycles.
As new tax incentives come into effect in 2026, such as permanent above-the-line deductions for non-itemizers, nonprofits should emphasize impact, transparency, and ease of giving to attract and convert donors, especially small-dollar and middle-income households.
Diversifying income streams beyond just donations—including grants, earned income, membership fees, and events—helps provide organizational stability during downturns. Additionally, investing in trust-building with donors through transparency, impact storytelling, and feedback loops strengthens long-term relationships.
Consistency in donations ensures nonprofits benefit from regular, recurring contributions, offering donors the flexibility to adjust their giving to respond to specific needs. A recoverable grant can be used by a nonprofit to maintain cash flow during uncertain times, but its repayment or repurposing depends on the specific situation and the donor's preferences.
In summary, during market fluctuations or a downturn, the need for strategic charitable giving is greater than ever. Drastic changes to a charitable giving plan are rarely necessary nor effective. Staying the course and trusting a well-designed charitable giving plan and investment strategy is advisable during market unpredictability. Many charitable causes are seeing an increased need for their work, and these strategies help donors and nonprofits maintain or even increase charitable impact during economic uncertainty by promoting flexibility, sustained giving, diversified funding, and deep donor engagement.
[1] Source: [Link to the original research or article] [2] Source: [Link to the original research or article] [3] Source: [Link to the original research or article] [4] Source: [Link to the original research or article]
Investing in donor-advised funds (DAFs) and diversifying assets can be beneficial for personal-finance, as they offer advantages during uncertain economic times, allowing donors to manage their giving strategically and maintain steady contributions regardless of market performance.
In times of uncertainty, prioritizing unrestricted gifts in personal-finance can provide nonprofits with the flexibility they need to respond effectively to evolving needs, ensuring a higher impact in their charitable work.
