The Philanthropy Outlook 2017 & Marts & Lundy. Indiana University Lilly Family School of Philanthropy PRESENTED BY RESEARCHED A N D WRITTEN BY

The Philanthropy Outlook 2017 & 2018 PRESENTED BY Marts & Lundy RESEARCHED A N D WRITTEN BY Indiana University Lilly Family School of Philanthropy JANUARY 2017

THE RESEARCH TEAM Indiana University Purdue University Indianapolis David Bivin, PhD LEAD STATISTICIAN Professor of Economics Una Osili, PhD PRINCIPAL INVESTIGATOR Director of Research, Indiana University Lilly Family School of Philanthropy Professor of Economics and Philanthropic Studies Melanie McKitrick, MA, MPA, MSW PROJECT MANAGER AND WRITER Indiana University Lilly Family School of Philanthropy Jonathan Bergdoll, MS STATISTICIAN Indiana University Lilly Family School of Philanthropy Mallory St. Claire, BS RESEARCH ASSOCIATE Indiana University Lilly Family School of Philanthropy ACKNOWLEDGMENTS Indiana University Lilly Family School of Philanthropy developed this report with financial support from Marts & Lundy, a leading fundraising consulting firm dedicated to advancing philanthropy and philanthropic research and strengthening nonprofit leadership. The research team would like to thank the following people from Marts & Lundy for their input and guidance during the development of The Philanthropy Outlook 2017 & 2018: Phil Hills, President and CEO, Senior Consultant and Principal; Sarah Williams, Leader of Analytical Solutions, Senior Consultant and Principal; and Alison L. Rane, Associate Consultant, Analytical Solutions. The research team also thanks Vidhura S.B.W. Tennekoon, PhD, for reviewing the methodology used to develop The Philanthropy Outlook. The Indiana University Lilly Family School of Philanthropy and Marts & Lundy also acknowledge Giving USA Foundation for publishing Giving USA: The Annual Report on Philanthropy. For more than 60 years, Giving USA has been publishing timely estimates for U.S. charitable giving. Giving USA: The Annual Report on Philanthropy is the authoritative source on American philanthropy.

Preface Philanthropy continues to expand in its visibility, both as a means of meeting the broad needs of our global society and to test innovative solutions for complex problems. Today s philanthropy involves high-profile donors and social causes featured as trending topics on social media feeds. Corporations are partnering with charities to provide consumers with daily opportunities to make social impact. Investors are leveraging their resources to make large-scale change in creating a better tomorrow for entire populations. Individuals from all walks of life are taking advantage of multiple means of engagement with charities to give back and pay it forward. Translating the social value of philanthropic engagement into hard data, organizational revenue within the charitable sector is now approaching $2 trillion annually or 5.4% of U.S. gross domestic product (GDP). 1 Moreover, growth in staffing and wages within the sector outpaced those in the public and corporate sectors over a recent 10-year period. 2 However, despite this growth, more than half of nonprofits recently reported that they have been unable to meet the demand placed on them. 3 Driven by competition for financial resources and an increased need for understanding the sector, interest in real-time philanthropic data continues to grow for nonprofit leaders, fundraisers, and practitioners. Such data is often elusive, an outcome of the complexity of constructing models that produce accurate predictions, as well as the fast-paced evolvement of our global economic landscape. In this third annual edition of The Philanthropy Outlook, we project national philanthropic giving for 2017 and 2018 by all donor types and giving to three recipient subsectors: education, health, and public-society benefit. Each of these noted subsectors has experienced unique changes and challenges in recent years. Recent research reveals that: 4 The education subsector has seen relatively large yearover-year gains in philanthropic giving in the last several years. Giving to institutions of higher education and private schools has been particularly strong, especially via online methods. Billion-dollar university campaigns have been numerous and successful, for both public and private institutions. Fundraising in the health subsector has produced mixed results in recent years. Support of organizations that research and treat specific diseases has realized moderate increases, but hospital fundraising appears to have grown more slowly. Online giving to health organizations has also realized slower growth as compared to other types of organizations, and peer-to-peer fundraising initiatives have seen declines. The public-society benefit subsector has continued to realize varied fundraising results by organizational type. Giving to national donor-advised funds has risen by large margins in recent years, but giving to support federated funds has generally been less positive. Nevertheless, many organizations focused on civic and human rights have seen important gains. The addition of the outlooks for health and public-society benefit to this edition of The Philanthropy Outlook provides practitioners across the nonprofit sector with additional information they need to make informed decisions about fundraising strategy, finances, and staffing. Overall, the U.S. should expect continued philanthropic growth for the years 2017 and 2018: The total giving rate is expected to rise above the 5-year annualized average for total giving, but will be below the 10-year and 25-year annualized averages. 5 All sources of giving are projected to increase their contributions in 2017 and 2018. Giving by foundations will see the largest increases in both years, followed by giving by bequest. Increases in contributions from individuals/households will be higher than the increases for gifts made by corporations. Among the recipient subsectors, giving to health will increase the most in both years. In 2017 and 2018, the health subsector will be the only one among those analyzed that will see giving rise above 10-year, 25-year, and 40-year historical trends. Giving to public-society benefit will exceed two of these noted historical trends, while giving to education will exceed one of these historical trends. We are pleased to report a positive philanthropy outlook for the years 2017 and 2018, and we hope that you can use this information to make important decisions that benefit your organization.

TABLE OF CONTENTS Introduction.... 7 The Philanthropy Outlook 2017 & 2018.... 8 Total Giving... 8 Giving by Individuals/Households.... 10 Giving by Foundations....11 Giving by Estates.... 12 Giving by Corporations... 13 TABLES AND FIGURES Figure 1: Distribution of Total Giving by Source for the Years 2017 and 2018.... 9 Figure 2: Average Rates of Change for Giving, Selected Time Periods, 1977-2017.... 9 Figure 3: Average Rates of Change for Giving, Selected Time Periods, 1978-2018.... 9 Table 1: Historical Annualized Averages for Giving... 17 Giving to Education... 14 Giving to Health.... 15 Giving to Public-Society Benefit... 16 Implications.... 18 For more detailed information about the methodology used in The Philanthropy Outlook, locate the Outlook s Technical Appendix at www.philanthropyoutlook.com. Conditions That May Affect the Outlook for Giving.... 22 Methodological Overview.... 26 Variable Definitions and Sources.... 28 Limitations... 31

The Philanthropy Outlook provides critical information to nonprofit practitioners specifically, projected philanthropic contributions by donor source and to the recipient subsectors. This information can be used to guide decision-making in the areas of budgeting, staffing, fundraising, programming, and nonprofit development. This information can also be used to inform the public about the importance and impact of the philanthropic sector. The Philanthropy Outlook provides data and analysis on future giving trends that are rigorous in their development, transparent, and informative. This edition of The Philanthropy Outlook projects giving for the years 2017 and 2018 in relationship to the year 2016. 6 Within this report, we explain how various economic factors will affect giving by source and subsector in 2017 and 2018 and provide other information to give context for these predicted trends. We have also included information about how certain economic and political conditions may alter our projections for giving. In the final section of this report, we note important implications concerning the data and recommendations to be used by practitioners in the course of their daily work.

Introduction As technological, social, and economic forces continue to evolve at the global level, philanthropy and nonprofit organizations continue to play an important role in creating sustainable and equitable communities at the local level. Today s philanthropy is driven by varying needs across populations and geographies, as well as increasingly complex societal problems. In the prior edition of The Philanthropy Outlook, we detailed how changing U.S. demographics will affect philanthropy in the future. Specifically, we noted that younger generations consider philanthropy to be an investment and that their giving is an extension of their own personal mission. We further discussed how shifts in the economic and political environments have differentially affected U.S. household finances and have produced questions about policy implications for philanthropy. Finally, we discussed how technological innovations have expanded the donor-nonprofit relationship by raising nonprofit transparency and providing the means for real-time engagement with stakeholders. We concluded that these changes provide both challenges and opportunities for nonprofits in terms of developing fundraising programs and strengthening overall revenue. We continue to believe that these noted changes are opportunities for nonprofit leaders to think creatively about revenue generation in the years to come. Innovation will be critical as competition for philanthropic resources heightens and the philanthropic relationship becomes more donor-focused, whether that relationship is with a corporation, foundation, other nonprofit, or an individual. 7 While all sources of contributions are important to the philanthropic sector, more than 7 in every 10 philanthropic dollars that the sector receives is contributed by individuals/households ; this donor type continues to hold real power in the donor-nonprofit relationship. 8 Today s donors want more control over their giving and to understand the impact they are making philanthropically. They want to be a partner, and the organizations to which they give must seek to leverage their philanthropic gifts through whatever means necessary, such as through collaboration with other organizations. Today s donors also demand that nonprofits are trustworthy, transparent, and accountable and that they communicate as much. 9 While reading the results of The Philanthropy Outlook 2017 & 2018, keep these elements in mind as you reflect and then project on what you can do within your own fundraising program. THE PHILANTHROPY OUTLOOK 2017 & 2018 7

Total Giving 2017 3.6 % 2018 3.8 % Total giving is predicted to increase by 3.6% in 2017 and by 3.8% in 2018. * In 2017 and 2018, total giving is expected to be lower than the historical 25-year and 40-year average rates of growth. Total giving in both years will be higher than the 10-year average growth rate of 0.5%. 10 Specific factors that will significantly and positively influence total giving in 2017 and 2018 include: Average to above-average growth in the S&P 500 in preceding and projected years, 11 Average to above-average growth in personal income, and Average to above-average growth in preceding years GDP. Year-over-year growth in the current year s S&P 500 influences individuals/household giving for the subsequent year, especially giving by those with median and higher levels of income. Further, in general, average growth in personal income for all types of households will positively impact total giving for 2017 and 2018. In fact, growth in personal income will have the largest influence on total giving for these years. Average to above-average growth in GDP for preceding years will have more impact in 2017 and 2018 than predicted in previous years of the Outlook. Other factors that will positively influence total giving in 2017 and 2018 include slightly above-average growth in household and nonprofit net worth 12 and an increase in the number of households that itemize deductions on their taxes. * All growth rates are based on predictions for giving in inflation-adjusted 2015 dollars using 2016 as the base year. The Philanthropy Outlook projects the growth rates of variables into 2017 and 2018; predicted growth rates are compared with the variables historical 10-, 25-, and 40-year annualized means. See Table 1 for these data. 8

Figure 1 DISTRIBUTION OF TOTAL GIVING, BY SOURCE, FOR THE YEARS 2017 AND 2018 5.0% 5.0% 8.7% 15.6% 8.9% 15.9% Figure 1 shows the proportion of total giving by each source for the years 2017 and 2018. In 2017, 70.7% of total giving is expected to derive from individuals/households, followed by 15.6% from foundations, 8.7% from estates, and 5.0% from corporations. In 2018, the proportion of giving from individuals/households will decline slightly, while the proportion of giving from estates and foundations will rise slightly. The proportion of giving from corporations will remain steady between 2017 and 2018. All four components of giving are expected to grow in 2017 and 2018. 70.7% 70.3% 2017 2018 GIVING BY: Individuals and Households Foundations Estates Corporations Figures 2 and 3 show the average rates of change for total giving in 10-year segments over the 40-year periods ending in 2017 and 2018. Both figures reveal that the rates of growth for giving in these years 3.6% in 2017 and 3.8% in 2018 are higher than the average rates of growth in the most recent 10-year periods ending in 2017 (1.2%) and 2018 (2.6%). 2007 to 2017 1997 to 2007 1987 to 1997 1977 to 1987 1.2% 2.6% 2008 to 2018 4.8% 2.8% 1998 to 2008 4.0% 4.5% 1988 to 1998 2.5% 2.6% 1978 to 1988 0% 1% 2% 3% 4% 5% 0% 1% 2% 3% 4% 5% Figure 2 AVERAGE RATES OF CHANGE FOR GIVING, SELECTED TIME PERIODS, 1977-2017 (Data are in 2015 dollars) Figure 3 AVERAGE RATES OF CHANGE FOR GIVING, SELECTED TIME PERIODS, 1978-2018 (Data are in 2015 dollars) Figure 2 shows that the estimated average annual rate of growth for giving in the period 2007-2017 is the lowest in the last four decades, at 1.2%. 13 The period 1997-2007 saw the highest rate of growth in total giving, at 4.8%, mirroring the economic boom of the 1990s. In the year 1997, giving grew an unprecedented 14.3%. Growth in total giving in the 2007-2017 period was considerably impacted by declines in giving during the Great Recession (2008 and 2009). Figure 3 shows the average annual rate of growth for giving in 10-year periods, 1978 to 2018. Giving in all periods except 1988-1998 are comparable. 14 The second most-recent 10-year period (1998-2008) incorporates the sharp decline seen in inflation-adjusted giving in 2008 from 2007 (-7.2%). As compared with Figure 2, the last 10-year period, 2008-2018, appears to demonstrate that total giving will be returning to long-term historical norms following the Great Recession. THE PHILANTHROPY OUTLOOK 2017 & 2018 9

Giving by 3.0 % 3.2 % Individuals/Households 2017 2018 Giving by individuals/households includes cash and non-cash donations contributed by all U.S. individuals and households including those who itemize their charitable contributions on their income taxes and those who do not to U.S. charities. Giving by American individuals/households is predicted to increase by 3.0% in 2017 and by 3.2% in 2018. * The current projections for giving by individuals/households for the years 2017 and 2018 are below the historical 25-year and 40-year average rates of growth for giving of this type. Individual/household giving for both years is expected to rise above the flat rate of change seen for the prior 10-year period. 15 Contributions from itemizing households and non-itemizing households are included in the forecasts for individual/ household giving for the years 2017 and 2018. 16 Specific factors that will significantly and positively influence individual/household giving in 2017 and 2018 include: Average to above-average growth in personal income, Close-to-average growth in household and nonprofit net worth, and A large body of work demonstrates, with few exceptions, the link between philanthropic giving and both household income and wealth. 17 In general, as income and wealth increase, so do the amounts that households give to charity. An increase in the number of households that itemize deductions on their taxes suggests that median U.S. household income and wealth are growing. The positive relationship between nonprofit net worth and giving likely reflects a linkage between household giving and the financial health of charities. As charities grow, they are better able to invest in fundraising programs that are proven to drive household giving at the same time that households are in a better financial position to give. An increase in the number of households that itemize deductions on their taxes. * All growth rates are based on predictions for giving in inflation-adjusted 2015 dollars using 2016 as the base year. The Philanthropy Outlook projects the growth rates of variables into 2017 and 2018; predicted growth rates are compared with the variables historical 10-, 25-, and 40-year annualized means. See Table 1 for these data. 10

Giving by Foundations 2017 5.9 % 2018 6.0 % Giving by foundations includes grants made by all U.S. foundations to U.S. charities. The foundation types included in this prediction include community, private (including family), and operating foundations.* Giving by foundations is predicted to increase by 5.9% in 2017 and by 6.0% in 2018. ** The current projections for giving by foundations (grantmaking) for the years 2017 and 2018 are above the historical 10-year average rate of growth of 4.9%, but well below the 25-year and 40-year average double-digit rates of growth. 18 Specific factors that will significantly and positively influence foundation giving in 2017 and 2018 include: Average to above-average growth in the S&P 500 in preceding years, 19 and Average to above-average growth in preceding years GDP. The above two factors will account for most of the predicted growth in giving by foundations in these years. As foundations typically budget their giving based on asset growth, trends in the prior year s S&P 500 will impact giving in the current year. Average to above-average predicted growth in the S&P 500 in 2016 and 2017 will influence strong foundation giving in 2017 and 2018. The majority of the increase in projected foundation giving for the years 2017 and 2018 will be influenced by average to above-average growth in prior years GDP. However, growth in giving positively influenced by rising GDP will be tempered by the projected rise in household and nonprofit net worth in current and preceding years. This result may be due to foundations restraining giving in positive economic periods to save grant funding for economic downturns. 20 * This prediction does not explicitly break out projected rates of growth for each foundation type. * * All growth rates are based on predictions for giving in inflation-adjusted 2015 dollars using 2016 as the base year. The Philanthropy Outlook projects the growth rates of variables into 2017 and 2018; predicted growth rates are compared with the variables historical 10-, 25-, and 40-year annualized means. See Table 1 for these data. THE PHILANTHROPY OUTLOOK 2017 & 2018 11

Giving by Estates 2017 5.4 % 2018 5.2 % Giving by estates includes cash and non-cash donations (bequests) contributed by all U.S. estates including those that itemize their charitable contributions on their estate taxes and those that do not to U.S. charities. Giving by estates is predicted to increase by 5.4% in 2017 and by 5.2% in 2018. * The amount that an estate bequeaths significantly depends on asset health at the time of the donor s passing. If the growth in assets held by estates slows, less will be given in the form of bequests. The current projections for giving by estates for the years 2017 and 2018 are below the historical 25-year and 40-year average rates of growth for giving of this type, but above the 10-year average rate of growth of 0.9%. 21 The factors that will most significantly and positively influence estate giving in 2017 and 2018 will be: The prior two factors will account for the majority of the predicted growth in giving by estates in these years. Giving by estates can shift substantially from year to year. This volatility is mostly due to very large bequests made by a few estates in a given year. Therefore, a large increase in one year will suppress the growth rate in giving the following year. The projected increases in bequest giving in 2017 and 2018 will hold unless substantially large gifts are made in 2016 or 2017. Above-average growth in the S&P 500, and Close-to-average growth in household and nonprofit net worth in preceding years. 22 * All growth rates are based on predictions for giving in inflation-adjusted 2015 dollars using 2016 as the base year. The Philanthropy Outlook projects the growth rates of variables into 2017 and 2018; predicted growth rates are compared with the variables historical 10-, 25-, and 40-year annualized means. See Table 1 for these data. 12

Giving by Corporations 2.4 % 2017 2018 2.7 % Giving by corporations includes all IRS itemized cash and non-cash donations contributed by all U.S. corporations and businesses and their foundations to U.S. charities. Giving by corporations is predicted to increase by 2.4% in 2017 and by 2.7% in 2018.* The current projections for giving by corporations for the Declines in consumer sentiment for preceding and projected years 2017 and 2018 are lower than the 25-year and 40-year years may soften the positive results expected for corporate historical averages for giving of this type, but higher giving in 2017 and 2018, as will increases in corporate than the flat rate of change seen, on average, during the profit for these years.24 As a general rule, corporate giving prior 10-year period.23 is associated with corporate pre-tax profits. The negative Specific factors that will significantly and positively influence corporate giving in 2017 and 2018 include: Average growth in GDP, and Above-average growth in corporate saving. influence of current-year corporate profits on corporate giving may reflect a reduced need to use philanthropy as a marketing tool and increased current-year production costs that tap into the same company resources used for philanthropic initiatives.25 Or, it could be that current-year profits coincide with increased current-year production The above two factors account for the majority of the costs that tap into the same company resources used for predicted growth in giving by corporations in these years. philanthropic initiatives. * All growth rates are based on predictions for giving in inflation-adjusted 2015 dollars using 2016 as the base year. The Philanthropy Outlook projects the growth rates of variables into 2017 and 2018; predicted growth rates are compared with the variables historical 10-, 25-, and 40-year annualized means. See Table 1 for these data. THE PHIL ANTHROPY OUTLOOK 2017 & 2018 13

Giving to Education 2017 6.3 % 2018 6.0 % Giving to education includes all cash and non-cash donations from itemizing and non-itemizing U.S. households to U.S. education charities, including institutions of higher education, private K-12 schools, vocational schools, libraries, educational research and policy, and many other types of organizations serving educational purposes. Giving to education is predicted to increase by 6.3% in 2017 and by 6.0% in 2018. * The current projections for giving to education for the years 2017 and 2018 are higher than the historical 10-year average rate of growth for giving of this type, but lower than the 25-year and 40-year historical annualized averages. 26 Specific factors that will significantly and positively influence education giving in 2017 and 2018 include: Above-average growth in GDP, Above-average growth in consumer spending on education services in preceding and projected years, 27 and Growth in consumer spending on health. The above three factors account for the majority of the predicted growth in giving to education in these years. Projected above-average growth in the S&P 500, growth in nonprofit services in concurrent and prior years, above-average consumer spending on community school services, and growth specifically in individual/household philanthropic giving will also have a positive effect on giving to education in 2017 and 2018. Reflecting the continued steady growth of education giving are the growing number of billion-dollar campaigns among institutions of higher education in recent years. Research has substantiated that the presence of fundraising campaigns and opportunities to give has a positive correlation with giving education giving included. 28 These billion-dollar campaigns are expected to continue into 2017 and 2018, helping to boost overall education giving. 29 Moreover, donations of very large gifts are likely to impact giving to this subsector, mirroring the trend seen in the last several years. 30 * All growth rates are based on predictions for giving in inflation-adjusted 2015 dollars using 2016 as the base year. The Philanthropy Outlook projects the growth rates of variables into 2017 and 2018; predicted growth rates are compared with the variables historical 10-, 25-, and 40-year annualized means. See Table 1 for these data. 14

Giving to Health 2017 8.5 % 2018 7.9 % Giving to health includes cash and non-cash donations from itemizing and non-itemizing U.S. households to U.S. health charities, including nonprofit community health centers, hospitals, and nursing homes; organizations focused on the treatment and/or cure of specific diseases; emergency medical services; wellness and health promotion; mental healthcare; health research; and other types of health organizations. Giving to health is predicted to increase by 8.5% in 2017 and by 7.9% in 2018. * The current projections for giving to health for the years 2017 and 2018 are higher than the historical 10-year, 25-year, and 40-year average rates of growth for giving of this type. 31 Specific factors that will significantly and positively influence health giving in 2017 and 2018 include: Average growth in GDP, Average to above-average growth in household and nonprofit net worth, and Growth in consumer expenditures on healthcare services, nursery school to high school education (above average), and education services (above average). 32 The above factors account for the majority of the predicted growth in giving to health in these years. The positive relationship between health and education spending and giving to health is complicated. There have been no significant statistical differences found between giving to health and giving to education among different age groups. 33 Moreover, research has demonstrated that neither health nor education are top giving priorities for particular age groups among the general population. Nonetheless, spending on health and education comprises relatively large percentages of households annual budgets, depending on the age of the household head or household composition. The higher level of household expenditures on health and education may influence household gifts to organizations within these subsectors. The amount that consumers spend on out-of-pocket healthcare costs rises with age. 34 The oldest age groups (65 and older) spend five-to-one the average amount that the youngest group (under 25) spends on healthcare. In addition, more than 12% of annual household expenditures, on average, among those older households goes to healthcare. Conversely, younger households with children under the age of 18 spend an average of 18% of total child-rearing expenses on childcare and education. 35 It may be, then, that each of these types of households responds similarly during more positive economic times both in terms of their educational and health spending, respectively, and their philanthropy. * All growth rates are based on predictions for giving in inflation-adjusted 2015 dollars using 2016 as the base year. The Philanthropy Outlook projects the growth rates of variables into 2017 and 2018; predicted growth rates are compared with the variables historical 10-, 25-, and 40-year annualized means. See Table 1 for these data. THE PHILANTHROPY OUTLOOK 2017 & 2018 15

Giving to 5.2 % 5.4 % Public-Society Benefit 2017 2018 Giving to public-society benefit includes cash and non-cash donations from itemizing and non-itemizing U.S. households to U.S. public-society benefit charities, including independent research facilities, community development organizations, human and civil rights organizations, philanthropy associations, national donor-advised funds, United Ways, federated charities, and other types of organizations. Giving to public-society benefit is predicted to increase by 5.2% in 2017 and by 5.4% in 2018. * The current projections for giving to public-society benefit for the years 2017 and 2018 are higher than the historical 10-year and 25-year average rates of growth for giving of this type, but lower than the 40-year annualized average rate of growth. 36 Specific factors that will significantly and positively influence public-society benefit giving in 2017 and 2018 include: Above-average growth in the S&P 500, Above-average growth in total giving, and Growth in consumer expenditures on foreign travel. 37 The above three factors account for the majority of the predicted growth in giving to public-society benefit in these years. As these results reveal, giving to the public-society benefit subsector is sensitive to giving on the donor side of the giving equation. This should be no surprise, as several different types of giving vehicles are included within this subsector, including donor-advised funds, United Ways, and federated charities. The public-benefit subsector, in particular, has seen growth in recent years in the use of innovative mechanisms that foster social impact, including impact investing and highly focused funding approaches. 38 Growth in giving to the public-society benefit subsector also appears to be positively influenced by economic environments that are conducive to the growth of luxury expenditures, such as foreign travel. This outcome implies that this particular subsector may not be as resistant to economic downturns as than other areas of giving. In addition, giving to public-society benefit tends to be affected by trends that influence consumer behavior among highincome households. * All growth rates are based on predictions for giving in inflation-adjusted 2015 dollars using 2016 as the base year. The Philanthropy Outlook projects the growth rates of variables into 2017 and 2018; predicted growth rates are compared with the variables historical 10-, 25-, and 40-year annualized means. See Table 1 for these data. 16

Table 1 HISTORICAL ANNUALIZED AVERAGES FOR GIVING 10-Year Average 25-Year Average 40-Year Average TOTAL GIVING 0.5% 4.4% 4.9% Giving by - 0.1% 3.4% 3.9% INDIVIDUALS/HOUSEHOLDS Giving by 4.9% 13.8% 17.6% FOUNDATIONS Giving by 0.9% 6.3% 5.6% ESTATES Giving by 0.0% 3.5% 6.6% CORPORATIONS Giving to 3.5% 6.7% 7.7% EDUCATION Giving to 2.1% 4.5% 2.1% HEALTH Giving to 0.7% 5.1% 10.0% PUBLIC-SOCIETY BENEFIT These data are drawn from historical giving data found in Giving USA 2016: The Annual Report on Philanthropy for the Year 2015. Data are adjusted for inflation to 2015 dollars. THE PHILANTHROPY OUTLOOK 2017 & 2018 17

Implications American donors of all types contributed an estimated $373.3 billion to approximately 1.2 million U.S. charities in 2015, 39 amounting to 2.1% of U.S. GDP. 40 American philanthropy is estimated to have grown 18.7% between 2011 and 2015, or at an average rate of 4.7% each of those years. 41 The peak of giving in this time span was in 2012 when total giving rose 9.2% over 2011. Projected growth in total giving in the years 2017 and 2018 is likely to continue to outpace predicted growth in U.S. GDP. 42 These increases mean that philanthropy will continue to stake a larger share of the U.S. economic landscape in years to come. Average annual giving is expected to increase $15.34 billion per year between 2014 and 2018, much larger than the average increase of $1.70 billion seen during the years 2009 to 2013. 43 Nearly $30 billion in inflation-adjusted dollars will be raised by charities in 2017 and 2018 beyond the 2016 total. In 2017 and 2018, giving by individuals/households and estates will comprise 79% of total giving. Giving by individuals/households will maintain its share of giving at 71% of the total in 2017, as compared with the years 2014 to 2016, but will drop to 70% of the total in 2018. Estate giving will also remain consistent with prior years, at 9% of the total share of giving for the years 2017 and 2018. Between the years 2014 and 2016, giving by foundations is estimated to have shifted between 15% and 16% of total giving. Foundation giving is expected to comprise 16% of giving in both 2017 and 2018. Corporate giving will maintain its share of 5% of total giving for these years. Education giving is expected to grow as a percentage of total giving, from an estimated 15% in 2014 to 17% in 2018. During this same period, giving to health will remain stable at 8% of total giving through 2017 and will grow to 9% of total giving in 2018. The share of giving to publicsociety benefit is also expected to grow, from 7% in 2014, 2015, and 2016, to 8% in 2017 and 2018. As discussed earlier in this report, today s donor environment is one in which donors are seeking more control and engagement in their philanthropy. This trend demands a donor-centric fundraising approach. Specific areas of the philanthropic environment that have helped to cultivate increased donor-centric behavior, and therefore contributions are outlined in the following sections. Understanding what drives today s donor can help nonprofit organizations of all types ensure a strong relationship with current and prospective donors and proactively plan for the years ahead. 18

THE RISING ROLE AND VISIBILITY OF DONOR-ADVISED FUNDS Donor-advised funds * have gained rapid traction in recent years for donors of varying financial means. In just one 5-year period, contributions to the largest donor-advised fund provider grew nearly 200%. 44 During that same time, total philanthropic giving grew just 21%. 45 In recent years, the average amounts donors have held within both community foundation and national-sponsor accounts have grown substantially: 71% and 116%, respectively. 46 In general, these funds provide donors with more flexibility, as compared with contributing directly through foundations or other types of giving vehicles. 47 As an example, donoradvised funds allow donors to grow the funds tax-free while simultaneously allowing for immediate grantmaking by the fund sponsor. Moreover, donors are able to contribute a wide variety of assets to these funds and to take an immediate tax deduction on their fund contributions. While donors do not have ultimate legal control over their funds, they do have the right to make suggestions about where and when grants are made. Donor-advised funds have become so popular that Fidelity Charitable Gift Fund claimed the top spot on The Chronicle of Philanthropy s annual Philanthropy 400 list for the year 2015 and is now the second-leading grantmaker of all types (just behind the Bill & Melinda Gates Foundation). 48 Reporting $4.6 billion in charitable revenue, the fund raised nearly $1 billion more than the second-ranked United Way. The ease with which donors can make donations through Fidelity s online platform has been identified as one top reason why the fund has grown so large. 49 Nonprofit organizations should view DAFs as friends, not enemies, says one nonprofit advisor. 50 Whether or not your charity sponsors donor-advised funds, you can encourage donors to utilize these funds to support your organization. Be explicit about the fact that your organization will accept grants made from donoradvised funds and educate donors about the flexibility of giving to these funds. * Within The Philanthropy Outlook, contributions to donor-advised funds are implicitly counted on the donor side under individuals/households and foundations (for those contributions granted by community foundations), as well as the recipient side under public-society benefit (for national/commercial funds) or under the recipient categories (for sponsoring charities). The Philanthropy Outlook does not separate contributions on either the donor side of giving or the recipient side of giving. THE PHILANTHROPY OUTLOOK 2017 & 2018 19

MAKING GIVING PERSONAL Research consistently demonstrates that donors give because of the values they share with recipient organizations and the mutual desire to solve a specific problem. According to the 2016 Donor Loyalty Study, released by the Association of Fundraising Professionals (AFP), surveyed donors were most likely to give because they were passionate about the cause. 51 Other top reasons that donors give include the perception that organizations depend on them and knowing someone specifically affected by the organization s cause. Stepping beyond shared values, today s donor expects you to know them. 52 As consumers in the larger world of commerce have become accustomed to personalized experiences, such as through the development of consumer-generated content and technology, donors expect the same. 53 According to Jay Ferro, chief information officer at the American Cancer Society, The capability to truly understand your constituent from a 360 view, build lasting relationships and effectively communicate mission impact that is important to them will set many nonprofits apart. 54 Be sure to incorporate elements in solicitation materials that speak to the shared values held by your organization and constituents. Also, consider how your organization can get to know current and potential constituents through various personal and technological mediums in developing more meaningful and impactful relationships with supporters. For current supporters, consider personalizing communications in ways that recognize the specific contributions your constituents have already made to your organization using those communication channels in which constituents are most likely to positively respond. CONNECTING DIGITALLY Digital media has become a primary means in which people connect with one another and with organizations, such as through social media and websites. Moreover, the online environment has sped up the delivery and retrieval of communication, whether in the form of informational content or direct person-to-person communication. Today, nearly 90% of Americans engage in online activity such as social media, commerce, and managing personal accounts and two-thirds of all Americans own a smart phone. 55 Taken together, roughly 60% of all online activity is conducted using smartphones (or, what are alternatively called handheld computers ). 56 While most Americans are online, many nonprofits struggle to stay ahead of the tech curve. Research indicates that nearly 8 in 10 nonprofits could improve their technology in the area of fundraising. 57 Further, when it comes to technology, many organizations struggle with staffing and budget shortfalls. While a 2016 study estimated that online giving through charity via smartphones increased 80% between 2013 and 2015, more than 80% of donors have not used this method. 58 Conspicuously, 80% of fundraising webpages have not been optimized for smartphone viewing. 59 Despite the relatively slow adaptation into the online environment by many nonprofits, trends suggest that online giving is consistently growing. 60 In 2015, 7% of all nonprofit revenue was estimated to have been given through online methods. 61 Among all online donations, 14% were estimated to have been given through mobile devices. Evidence suggests that larger organizations and those organizations that were strategic about enhancing digital fundraising were the most successful in generating increased online revenue in 2015. 20

A donate now button simply is no longer sufficient in capturing online donations. Invest in upgrading your organization s website and online giving environment, ensuring that the website is modern and mobile friendly. Consider how your organization is not only initially drawing donors to your online site, but how it is keeping donors engaged over the long term. Small- and medium-sized organizations might consider modeling their online giving programs after their more successful large-sized peers. PEER-TO-PEER FUNDRAISING: CROWDFUNDING Beyond giving to organizations via their websites or fundraising platforms where most online donations are generated donors are increasingly turning to crowdfunding to support people and causes. Crowdfunding refers to the act of raising contributions, typically cash, from a large number of people to fund a specific cause, project, or venture. Crowdfunding is largely conducted online through specific fundraising webpages and portals. Current estimates suggest that crowdfunding reached between $17 billion and $34 billion in 2015. 62 The majority of funds that cycle through crowdfunds are made for investments in for-profit startups or person-to-person lending. However, not insignificant are the roughly $6 billion in contributions made to individuals or organizations for cause purposes. A 2016 Pew Research Center survey found that 22% of Americans have contributed to a crowdfunding campaign on such sites as GoFundMe, Kickstarter, or YouCaring. 63 The vast majority of individuals who have contributed to a crowdfunding campaign have given to five or fewer campaigns and $50 or less. More than two-thirds of donors supporting crowdfunds have given to a specific person in need, while a third have supported a school. Nearly 9 in 10 crowdfunding contributors reported that crowdfunds help people to feel more connected to the causes they support. Crowdfunding has likely been exceptional in raising funds for individual causes because of the emotional appeal behind the stories told. 64 Crowdfunding may or may not be appropriate for your organization; 65 however, you can harness the power of storytelling to invoke within potential donors recognition of the values that you share with them. INSTANTANEOUS AND FLEXIBLE COLLABORATION Today s consumers have become accustomed to instantaneous results and seamless service. As a result, the on-demand economy requires that donations to nonprofits be friction free. 66 Yet while donors want giving opportunities to be effortless and smooth, they do not want to engage passively with the nonprofits they support. Rather, flexible collaboration is what they seek flexibility around all of the demands for attention and time that today s fast-paced world places on them. Today s donors, especially within the younger set, crave opportunities to make change. They seek to integrate social impact into the broader scope of their lives, whether it is through fitness, consumer purchases, work and career, or socializing. 67 Consider how you can provide supporters more opportunities to give and interact with your organization in friction-free yet meaningful ways. Options to give on the spot, such as through texting, point-of-sale donations, one-click giving, and other methods may be ideal. 68 To facilitate meaningful connection with others, provide donors with the option to share their experience of giving with others via a number of social media platforms. 69 THE PHILANTHROPY OUTLOOK 2017 & 2018 21

Conditions That May Affect the Outlook for Giving In late November 2016, the Organization for Economic Cooperation and Development (OECD) projected 3.3% growth in the global economic climate for the year 2017 and 3.6% for the year 2018. 70 OECD cited that policy changes to induce fiscal recovery and improve trade will help grow the near-future economy. The Philanthropy Outlook projects U.S. GDP to be close to 3.0% for both 2017 and 2018, 71 in line with OECD s U.S. projections. 72 These projections for GDP, as well as other projections of macro-economic figures developed for this outlook, are likely to hold unless the U.S. experiences a financial shock in 2017 and 2018. 73 Specific trends that are expected to impact U.S. GDP and the financial stability of U.S. households in 2017 and 2018 include: In December 2015, the Federal Reserve raised the Federal Funds rate from 0.25% to 0.50%. 74 In December 2016, the Federal Reserve raised the Federal Funds rate again, by 0.25%. 75 This increase brought the target Federal Funds rate to between 0.50% and 0.75%. 76 The Federal Reserve s outlook for 2017 includes three quarter point increases. 77 Oil prices remained low in 2016 at about half the price per 2014 barrel. 78 Between mid-october and mid- November 2016 alone, oil prices dropped 20%. 79 Later in November 2016, oil prices began to grow as OPEC member nations signaled potential oil production cuts. 80 Such cuts would bring increased costs to consumers, cutting into consumers discretionary spending budgets. While increased U.S. production could result in sustained low prices for U.S. consumers, 81 forecasters estimate that the average cost for oil will rise gradually into 2017 and 2018. 82 The U.S. sustained a near 5% unemployment rate through 2016, similar to year-end 2015. The unemployment rate has declined steadily since its most recent peak of 10% in fall 2009 83 and is forecasted to decline to a low of 4.6% in 2018. 84 The Consumer Price Index, which measures the change in price for a basket of goods over time, is expected to gradually increase from late 2016 into 2018. 85 THE PRESIDENTIAL ELECTION The outcome of the U.S. presidential election on policies that affect nonprofits and philanthropic contributions is an unknown factor as the year 2017 begins. Immediately after the election, U.S. advocacy nonprofits that work in the areas of civil and human rights, the environment, and support of minority groups saw a surge of donations. 86 Some of these organizations have seen unprecedented levels of support. 87 What may be most striking is that many of these organizations received an influx of unsolicited donations generated through grassroots efforts. This raises two questions: 1.) Are organizations ready for unexpected donations? 2.) Are organizations prepared for both the positive and negative outcomes of the political and economic environments? While these noted factors may influence the nonprofit sector s growth, the new president-elect s policies are likely to be a boon to the general financial sector. The new administration s plans to cut taxes are expected to expand both public spending and infrastructure. 88 These potential policy trends may help to boost philanthropic giving from corporations, foundations, and wealthy donors, in particular. 22

Below are statements concerning the stability of the variables used in The Philanthropy Outlook model. These variables all significantly influence giving and tend to have the same type of influence year after year. Some factors are more stable than others. More stable factors increase the confidence of these predictions, while less stable factors decrease confidence levels. For more detailed information about these variables, see the Technical Appendix at www.philanthropyoutlook.com. For a definition of these variables and their sources, see the Variable Definitions and Sources list following the Methodological Overview section in this document or the Technical Appendix. Stability of the Variables CONSUMER SENTIMENT Consumer sentiment affects giving by corporations. This variable is generally an unstable economic indicator, meaning the likelihood that the growth rate for this variable will be considerably different than predicted is high. 89 CORPORATE SAVING AND CORPORATE PROFITS While these variables have significant influence on corporate giving, they are unstable economic indicators. The likelihood that the growth rates for these variables will be considerably different than predicted is high. 90 EMPLOYMENT The employment rate is a stable indicator of giving, meaning the projected growth rate is not likely to differ significantly from what was predicted in this outlook. Therefore, its predicted impact on giving by corporations is deemed highly reliable. 91 GROSS DOMESTIC PRODUCT (GDP) GDP is generally a stable indicator of giving, meaning the projected growth rate is not likely to differ significantly from what was predicted in this outlook. Therefore, its predicted impact on giving by foundations and corporations is deemed highly reliable. 92 However, GDP may fall if the U.S. economic environment experiences an exogenous shock as a result of recession, disaster, war, or other severe situations. HOUSEHOLD AND NONPROFIT NET WORTH Household and nonprofit net worth is a stable indicator of giving, meaning the projected growth rate is not likely to differ significantly from what was predicted in this outlook. Therefore, its predicted impact on giving by individuals/households, foundations, and estates is deemed highly reliable. 93 INTEREST RATE FOR GOVERNMENTAL SECURITIES The interest rate for governmental securities has significant influence on estate giving, in particular. This variable is a stable economic indicator. Therefore, its predicted impact on giving by estates is deemed highly reliable. 94 This variable plays an overall small role in our predictions, otherwise. PERSONAL INCOME Personal income is a stable indicator of giving, meaning the projected growth rate is not likely to differ significantly from what was predicted in this outlook. Therefore, its predicted impact on giving by individuals/ households is deemed highly reliable. 95 THE PHILANTHROPY OUTLOOK 2017 & 2018 23

PERSONAL CONSUMPTION Personal consumption affects giving to education. This variable is generally a stable economic indicator, meaning the projected growth rate is not likely to differ significantly from what was predicted in this outlook. 96 PERSONAL CONSUMPTION EXPENDITURES Personal consumption expenditures affect giving to education, health, and public-society benefit. There are many different types of personal consumption expenditures, and the majority are stable economic indicators. This means that for most of these indicators, the projected growth rates are not likely to differ significantly from what were predicted in this outlook. 97 PERSONAL SAVING RATE The personal saving rate affects giving to public-society benefit. This variable is generally an unstable economic indicator, meaning the likelihood the growth rate for this variable will be considerably different than predicted is high. 98 THE S&P 500 While the S&P 500 has significant influence on corporate, individual/household, and foundation giving, this variable is an unstable economic indicator. The likelihood that the growth rate for this variable will be considerably different than predicted is high. 99 Conditions That May Impact the Giving Predictions Within each Philanthropy Outlook component presented in the main sections of this report, we provided an explanation for those economic factors that will likely have the greatest impact on giving. In the following section, we provide explanations for those conditions that may impact the giving predictions. 100 We focus on those factors that will have the greatest bearing on giving. For more detailed information about these variables, see the Technical Appendix at www.philanthropyoutlook.com. PREDICTED TOTAL GIVING AND GIVING BY DONOR TYPE WILL BE LOWER UNDER THE FOLLOWING CONDITIONS: S&P 500 grows less than 4.0% in 2016, 4.6% in 2017, and 5.2% in 2018 Consumer sentiment declines more than 1.9% in 2016, 2.1% in 2017, and 0.7% in 2018 Household and nonprofit net worth grows less than 3.6% in 2016, 3.6% in 2017, and 3.7% in 2018 Personal income grows less than 3.4% in 2017 and 3.3% in 2018 Corporate saving grows less than 3.2% in 2017 and 4.6% in 2018 Corporate profits increase more than 2.7% in 2017 and 3.9% in 2018 The number of tax itemizers grows more than 1.6% in 2016, 1.8% in 2017, and 1.9% in 2018 GDP grows less than 3.6% in 2016, 3.0% in 2017, and 3.1% in 2018 24

PREDICTED GIVING TO EDUCATION WILL BE LOWER UNDER THE FOLLOWING CONDITIONS: S&P 500 grows less than 4.6% in 2017 and 5.2% in 2018 GDP grows less than 3.6% in 2016, 3.0% in 2017, and 3.1% in 2018 Personal consumption grows more than 3.3% in 2017 and 3.4% in 2018 Giving by individuals/households grows less than 3.0% in 2017 and 3.2% in 2018 Personal consumption expenditures on healthcare services grows more than 5.3% in 2017 and 5.4% in 2018 Personal consumption expenditures on education services grows less than 6.4% in 2016, 6.1% in 2017, and 6.0% in 2018 Personal consumption expenditures on nonprofit gross service output grows more than 4.6% in 2017 and 4.7% in 2018 Personal consumption expenditures on health grows less than 5.4% in 2017 and 5.5% in 2018 Personal consumption expenditures on recreation services grows more than 4.4% in 2016 and 4.2% in 2017 Personal consumption expenditures on education grows more than 6.2% in 2016 and 6.0% in 2017 Personal consumption expenditures on community school services grows less than 5.7% in 2016 and 5.1% in 2017 PREDICTED GIVING TO HEALTH WILL BE LOWER UNDER THE FOLLOWING CONDITIONS: GDP grows less than 3.6% in 2016, 3.0% in 2017, and 3.1% in 2018 Household and nonprofit net worth grows less than 3.6% in 2016, 3.6% in 2017, and 3.7% in 2018 Total giving grows more than 3.6% in 2017 and 3.7% in 2018 Personal consumption expenditures on healthcare services grows less than 5.3% in 2017 and 5.4% in 2018 Personal consumption expenditures on nursery school to high school grows less than 5.0% in 2017 and 4.9% in 2018 Personal consumption expenditures on clothing grows more than 1.4% in 2017 and 1.5% in 2018 Personal consumption expenditures on nonprofit sales grows more than 4.7% in 2016, 4.8% in 2017, and 4.9% in 2018 Personal consumption expenditures on pharmaceuticals grows more than 6.8% in 2017 and 6.6% in 2018 Personal consumption expenditures on education services grows less than 6.4% in 2016 and 6.1% in 2017 Personal consumption expenditures on foreign travel grows more than 5.2% in 2016 and 4.5% in 2017 PREDICTED GIVING TO PUBLIC-SOCIETY BENEFIT WILL BE LOWER UNDER THE FOLLOWING CONDITIONS: S&P 500 grows less than 4.6% in 2017 and 5.2% in 2018. Total giving grows less than 3.6% in 2017 and 3.7% in 2018 The personal saving rate grows less than 0% in 2016 and 2017 Personal saving grows more than 3.1% in 2016 and 3.5% in 2017 Personal consumption expenditures on foreign travel grows less than 4.5% in 2017 and 4.6% in 2018 THE PHILANTHROPY OUTLOOK 2017 & 2018 25

Methodological Overview To review our complete methodology, please view our Technical Appendix at www.philanthropyoutlook.com. The Philanthropy Outlook produces forecasts for the annual growth rates and levels of individual/household, foundation, estate, and corporate giving and giving to education, health, and public society benefit for the years 2015 through 2018. 101 The forecast for total giving is produced as the sum of the four donor components. Collectively, 25 different variables, plus lagged values for many of these variables, were incorporated into the final models for giving by donor and recipient subsectors. In the initial stages of methodological development, all possible combinations of variables were compared, resulting in more than 100,000 regressions for individual/household giving alone. Fewer regressions were needed for the three remaining components. For each component, the best model was selected by first considering its explanatory power through 2015. Those models with the best explanatory power were then re-estimated through 2003. One-year-ahead forecasts were constructed through 2015 for these models, and the best model was selected as the one with the lowest root-mean squared error. 102 We relied on historical data from Giving USA: The Annual Report on Philanthropy and available IRS data. See Figure 1 in the Technical Appendix for a comparison of actual versus predicted growth rates for total giving for the years 2015 to 2018 and also the section titled, Variable Definitions and Sources, for a list of the candidate variables. We know that sometimes an event can have a delayed effect on giving. For that reason, we considered previous-year and contemporaneous values of the explanatory variables as well as previous-year values of the dependent variables (i.e., historical giving values). For the individual/household and corporate giving models, it is not practical to test all of the variables at the same time. Instead, we adopted a three-step approach. In the first step, only the current values of the candidate variables were included in the regression. The best model within this set is referred to as the base model. The selection procedure was implemented over all possible combinations of the lagged variables added to the base model. The best model following this step is the revised model. In the third step, the 26

selection procedure was run over all possible combinations of variables in the revised model. The result is the final model. The estate and foundation models were estimated in a single step, because the number of candidate variables was small enough that the previous and current values of the variables could be evaluated in one program. The models for estimating giving to the recipient subsectors were developed using a modified version of the aforementioned individual/household and corporate giving models. In general, giving to the recipient subsectors is difficult to predict, as each of the subsectors experiences unique conditions that affect giving. Moreover, because there are several subsectors that receive gifts from the four major donor types, the subsectors experience more variance in their giving on a year-to-year basis than do the sources of giving. To adjust for these factors, additional steps were added to the original three-step approach. When using the first-step base model approach, we tested all combinations of a set of subsector-specific variables. These additional variables were derived from the different types of personal consumer expenditures, which allowed us to evaluate variables more specific to each particular subsector. The variables were then tested with the lag of all personal giving variables, and that resultant list was then tested with the lag of all subsector-specific variables. This revised model was then tested against all possible permutations of itself, which results in the final model for each subsector. Tables 2 and 3 in the Technical Appendix describes the models for each source of giving and for giving to the recipient subsectors. Note that for each source of giving, with the exception of giving by estates, the adjusted R2s (coefficients of determination) are high. Moreover, the signs of the coefficients are generally consistent with the economic theory that giving responds positively to increases in the ability to give and general economic conditions. See Table 4 in the Technical Appendix to reference the ratio of root-mean-squared error to the standard deviation for each giving prediction. The forecasts of the different components were processed using the final version of each model. The forecasts covered 2015 to 2018. 103 Implementing the forecasts entailed auxiliary models for the explanatory variables (i.e., independent variables). These auxiliary models are described in the Technical Appendix. THE PHILANTHROPY OUTLOOK 2017 & 2018 27

Variable Definitions and Sources Independent Variables 104 CONSUMER SENTIMENT Consumer sentiment is an index computed based on monthly surveys covering personal finances, business conditions, and buying conditions. Data for consumer sentiment come from the Consumer Sentiment Index, Federal Reserve Bank of St. Louis (FRED), http://research.stlouisfed.org/ fred2/series/umcsent CORPORATE PROFITS Corporate profits are corporate income after subtracting expenses. Data for corporate profits come from the Bureau of Economic Analysis, U.S. Department of Commerce, http://www.bea.gov/national/index.htm CORPORATE SAVING Corporate saving is corporate profits that are left over after taxes and dividend payments. Data for corporate saving come from the Bureau of Economic Analysis, U.S. Department of Commerce, http://www.bea.gov/itable/index_nipa.cfm DISPOSABLE PERSONAL INCOME Disposable personal income refers to the amount of money that households have available for spending and saving after paying taxes. 105 Data for disposable personal income come from the Bureau of Economic Analysis, U.S. Department of Commerce, http://www. bea.gov/newsreleases/national/pi/pinewsrelease.htm GROSS DOMESTIC PRODUCT (GDP) GDP is the value of the production of goods and services in the United States, adjusted for price changes, according to the Bureau of Economic Analysis, U.S. Department of Commerce. Data for GDP come from Table 1.1.5 at the Bureau of Economic Analysis, U.S. Department of Commerce, http://www.bea.gov/itable/index_nipa.cfm HOUSEHOLD AND NONPROFIT NET WORTH Net worth for households and nonprofits is the net assets of households and nonprofits serving households after subtracting net liabilities. Data for the net worth of households and nonprofits come from the Federal Reserve Bank of St. Louis (FRED), http://research.stlouisfed.org/ fred2/series/hnonwra027n INDIVIDUAL/HOUSEHOLD ITEMIZERS AND NON-ITEMIZERS Itemizers refer to those taxpayers who can itemize certain expenses on their household taxes, as opposed to taking the standard deduction. Typically, those with higher incomes and/or those who own their homes are able to itemize. Data for the number of itemizers come from www.irs.gov/taxstats. Data for non-itemized giving come from the Philanthropy Panel Study, Indiana University Lilly Family School of Philanthropy, http://www.philanthropy.iupui.edu/research-and-news, and Giving USA 2016: The Annual Report on Philanthropy for the Year 2015, researched and written by Indiana University Lilly Family School of Philanthropy and published by Giving USA Foundation, www.givingusa.org INDIVIDUAL TAX RATE The individual tax rate is the top marginal tax rate for individuals and households. This information comes from https://www.irs.gov/pub/irs-pdf/i1040tt.pdf INTEREST RATE FOR GOVERNMENTAL SECURITIES The interest rate for governmental securities is the rate of return on an asset after removing the effect of inflation. Data for the interest rates of governmental securities come from the Federal Reserve Bank of St. Louis (FRED), http://research.stlouisfed.org/fred2/series/gs1 28 28

PERSONAL CONSUMPTION Personal consumption is a measure of personal consumption expenditure, a measure of goods and services purchased by U.S. residents according to the Bureau of Economic Analysis, U.S. Department of Commerce, http://www.bea. gov/national/pdf/nipaguid.pdf. Data for personal consumption come from the Federal Reserve Bank of St. Louis (FRED), https://research.stlouisfed.org/fred2/series/pce PERSONAL CONSUMPTION EXPENDITURES Personal consumption expenditures is the primary measure of consumer spending on goods and services in the U.S. economy. It accounts for about two-thirds of domestic final spending, and thus it is the primary engine that drives future economic growth. PCE shows how much of the income earned by households is being spent on current consumption as opposed to how much is being saved for future consumption. 106 Data on consumer expenditures come from https://fred.stlouisfed.org/series/pce PERSONAL INCOME Personal income is the income received by persons from participation in production, government and business transfers, and government interest, according to www.bls.gov/bls/ fesacp1061104.pdf. Data for personal income come from Table 2.1 at Bureau of Economic Analysis, U.S. Department of Commerce, http://www.bea.gov/itable/index_nipa.cfm PERSONAL SAVING Personal saving refers to the amount of income that individuals/households save, as opposed to what households spend. 107 Data for personal saving come from https://fred.stlouisfed.org/series/psave/ PERSONAL SAVING RATE The personal saving rate is the percentage of disposable personal income that is used for saving. Data for the personal saving rate come from the Federal Reserve Bank of St. Louis (FRED), https://research.stlouisfed.org/fred2/series/psavert THE S&P 500 The S&P 500 is the value of the Standard & Poor s 500 Index on December 31 of a given year. Data for the S&P 500 come from Federal Reserve Bank of St. Louis (FRED), https://research.stlouisfed.org/fred2/series/sp500 Dependent Variables GROWTH RATE FOR INDIVIDUAL/HOUSEHOLD GIVING The growth rate for individual/household giving includes cash and non-cash donations contributed by all U.S. individuals and households (including those who itemize their charitable contributions on their income taxes and those who do not) to U.S. charities. Historical data for the growth rate in individual/household giving were derived from Giving USA 2016: The Annual Report on Philanthropy for the Year 2015, researched and written by the Indiana University Lilly Family School of Philanthropy and published by Giving USA Foundation, www.givingusa.org GROWTH RATE FOR FOUNDATION GIVING The growth rate for foundation giving includes grants made by all U.S foundations to U.S. charities. Historical data for the growth rate in foundation giving were derived from Giving USA 2016: The Annual Report on Philanthropy for the Year 2015, researched and written by the Indiana University Lilly Family School of Philanthropy and published by Giving USA Foundation, www.givingusa.org. Foundation giving data in Giving USA are based on estimates produced by the Foundation Center (www.foundationcenter.org) and include grants from community, private (including family), and corporate foundations. THE PHILANTHROPY OUTLOOK 2017 & 2018 29 THE PHILANTHROPY OUTLOOK 2017 & 2018 29

GROWTH RATE FOR ESTATE GIVING The growth rate for estate giving includes cash and non-cash donations (bequests) contributed by all U.S. estates (including those who itemize their charitable contributions on their estate taxes and those who do not) to U.S. charities. Historical data for the growth rate in estate giving were derived from Giving USA 2016: The Annual Report on Philanthropy for the Year 2015, researched and written by the Indiana University Lilly Family School of Philanthropy and published by Giving USA Foundation, www.givingusa.org GROWTH RATE FOR CORPORATE GIVING The growth rate for corporate giving includes cash and non-cash IRS itemized donations contributed by all U.S. corporations and corporate foundations to U.S. charities. Historical data for the growth rate in corporate giving were derived from Giving USA 2016: The Annual Report on Philanthropy for the Year 2015, researched and written by the Indiana University Lilly Family School of Philanthropy and published by Giving USA Foundation, www.givingusa.org GROWTH RATE FOR EDUCATION GIVING The growth rate for education giving includes cash and non-cash donations from itemizing and non-itemizing U.S. households to U.S. educational charities, including institutions of higher education, private K-12 schools, vocational schools, libraries, educational research and policy, and many other types of organizations serving educational purposes. Historical data for the growth rate in education giving were derived from Giving USA 2016: The Annual Report on Philanthropy for the Year 2015, researched and written by the Indiana University Lilly Family School of Philanthropy and published by Giving USA Foundation, www.givingusa.org GROWTH RATE FOR HEALTH GIVING The growth rate for education giving includes cash and non-cash donations from itemizing and non-itemizing U.S. households to U.S. health charities, including nonprofit community health centers, hospitals, and nursing homes; organizations focused on the treatment and/or cure of specific diseases; emergency medical services; wellness and health promotion; mental healthcare; health research; and other types of health organizations. Historical data for the growth rate in health giving were derived from Giving USA 2016: The Annual Report on Philanthropy for the Year 2015, researched and written by the Indiana University Lilly Family School of Philanthropy and published by Giving USA Foundation, www.givingusa.org GROWTH RATE FOR PUBLIC-SOCIETY BENEFIT GIVING The growth rate for public-society benefit giving includes cash and non-cash donations from itemizing and nonitemizing U.S. households to U.S. public-society benefit charities, including independent research facilities, community development organizations, human and civil rights organizations, philanthropy associations, national donor-advised funds, United Ways, federated charities, and other types of organizations. Historical data for the growth rate in public-society benefit giving were derived from Giving USA 2016: The Annual Report on Philanthropy for the Year 2015, researched and written by the Indiana University Lilly Family School of Philanthropy and published by Giving USA Foundation, www.givingusa.org 30 30

Limitations The Philanthropy Outlook was developed using wellestablished econometric methods. The models selected for producing each component of The Philanthropy Outlook are composed of a linear combination of the growth rates (or 1-year differences) of key indicators. The produced results point toward linkages between specific economic variables and philanthropic giving. These linkages can be positive or negative (inverse), as well as direct or indirect. With these results, we cannot say that a particular variable caused philanthropy to rise or fall. However, the results presented in The Philanthropy Outlook do point us toward what is likely to happen and why. The Philanthropy Outlook is meant to be informational. Indiana University Lilly Family School of Philanthropy and Marts & Lundy make no guarantees about the accuracy of The Philanthropy Outlook. Similar to other types of predictions, it is impossible to know ahead all of those factors that will affect giving into the future. While The Philanthropy Outlook is based on scientific methodology, there are limits to the use of such methodology to predict future outcomes. THE PHILANTHROPY OUTLOOK 2017 & 2018 31

Citations 1 Rebecca Koenig, Nonprofits Saw Healthy Growth in the Past Decade, The Chronicle of Philanthropy, Oct. 24, 2016, www.philanthropy.com; Brice McKeever, The Nonprofit Sector in Brief 2015: Public Charities, Giving, and Volunteering, Oct. 29, 2015, Urban Institute, www.urban.org 2 Between 2003 and 2013, according to: Brice McKeever, The Nonprofit Sector in Brief 2015: Public Charities, Giving, and Volunteering, Oct. 29, 2015, Urban Institute, www.urban.org 3 2015 State of the Nonprofit Sector, Nonprofit Finance Fund, 2016, www.nonprofitfinancefund.org 4 Giving USA 2016: The Annual Report on Philanthropy for the Year 2015, researched and written by the Indiana University Lilly Family School of Philanthropy and published by Giving USA Foundation, www.givingusa.org 5 Comparison data are drawn from Giving USA 2016: The Annual Report on Philanthropy for the Year 2015, researched and written by the Indiana University Lilly Family School of Philanthropy and published by Giving USA Foundation, www.givingusa.org. The figures are all in inflation-adjusted dollars. The 10-year, 25-year, and 40-year averages are shown in Table 1 of this report. 6 The rate of change for the year 2017 is relative to the year 2016. The rate of change for the year 2018 is relative to the year 2017. 7 Amy Sample Ward, Technology and the Shift to Donor-Centric Fundraising, npengage, July 29, 2016, www.npengage.com 8 Comparison data are drawn from Giving USA 2016: The Annual Report on Philanthropy for the Year 2015, researched and written by the Indiana University Lilly Family School of Philanthropy and published by Giving USA Foundation, www.givingusa.org. 9 New Study: Americans Misinformed Before Donating to Charities, BBB Wise Giving Alliance, Oct. 28, 2014, www.give.org; Cynthia Gibson and William Dietel, What Do Donors Want?, Nonprofit Quarterly, Sep. 22, 2010, www.nonprofitquarterly.org; Why Transparency Matters Part 3: How Does One Be Transparent?, InterAction [blog], Sep. 25, 2014, https:// www.interaction.org/blog/why-transparencymatters-part-3-how-does-one-be-transparent; Andy Segedin, Nonprofits Effectiveness, Transparency Impacting Donors, The Nonprofit Times, Oct. 5, 2016, www.thenonprofittimes.com; Sean Norris, 80 Nonprofit Trends for 2016, Nonprofit Pro, Feb. 9, 2016, www.nonprofitpro.com 10 Historical averages reported in The Philanthropy Outlook are in comparison to a national charitable dataset going back to 1975, as published by Giving USA 2016: The Annual Report on Philanthropy for the Year 2015, researched and written by the Indiana University Lilly Family School of Philanthropy and published by Giving USA Foundation, www.givingusa.org. The figures are all in inflation-adjusted dollars (2015). Prior-year projections are not included in this report. 11 Year-to-year growth in charitable giving is often driven by prior-year growth of specific economic variables. For total giving, this is true of the S&P 500, consumer sentiment, GDP, number of itemizing households, and net worth of households and nonprofits. 12 The relationship between nonprofit net worth and total giving likely reflects a symbiotic relationship between the health of nonprofits that receive personal contributions and giving levels. It could be, as well, that nonprofits with growing assets are more likely to employ sophisticated fundraising programs that positively impact giving by individuals and households. 13 Data for years prior to 2016 come from Giving USA 2016: The Annual Report on Philanthropy for the Year 2015, researched and written by the Indiana University Lilly Family School of Philanthropy and published by Giving USA Foundation, www.givingusa.org 14 Data for years prior to 2016 come from Giving USA 2016: The Annual Report on Philanthropy for the Year 2015, researched and written by the Indiana University Lilly Family School of Philanthropy and published by Giving USA Foundation, www.givingusa.org 15 Prior-year projections are not included in this report. Data for years prior to 2016 come from Giving USA 2016: The Annual Report on Philanthropy for the Year 2015, researched and written by the Indiana University Lilly Family School of Philanthropy and published by Giving USA Foundation, www.givingusa.org 16 Data for non-itemized giving come from the Philanthropy Panel Study, the Indiana University Lilly Family School of Philanthropy, http://www.philanthropy.iupui. edu/research-and-news, and Giving USA 2016: The Annual Report on Philanthropy for the Year 2015, researched and written by the Indiana University Lilly Family School of Philanthropy and published by Giving USA Foundation, www.givingusa.org 17 John J. Havens, Mary A. O Herlihy, and Paul G. Schervish, Charitable Giving: How Much, by Whom, to What, and How, The Nonprofit Sector: A Research Handbook, Edition 2, 2006, 542-567; Pamela Wiepking and René Bekkers, Who Gives? A Literature Review of Predictors of Charitable Giving, Part Two, Voluntary Sector Review, 3(2), 2012, 217-245; Russell N. James and Deanna L. Sharpe, The Nature and Causes of the U-Shaped Charitable Giving Profile, Nonprofit and Voluntary Sector Quarterly, 36(2), 2007, 218-238; The Philanthropy Panel Studies, Indiana University Lilly Family School of Philanthropy, 2010, 2012, www.philanthropy.iupui.edu 32

18 Prior-year projections are not included in this report. Data for years prior to 2016 come from Giving USA 2016: The Annual Report on Philanthropy for the Year 2015, researched and written by the Indiana University Lilly Family School of Philanthropy and published by Giving USA Foundation, www.givingusa.org 19 Growth in charitable giving is often driven by prior-year growth of specific economic variables. For foundation giving, this is true for GDP, the S&P 500, consumer sentiment, and net worth of households and nonprofits. 20 This is one hypothesis. Foundations will adopt various strategies given various funding priorities. 21 Prior-year projections are not included in this report. Data for years prior to 2016 come from Giving USA 2016: The Annual Report on Philanthropy for the Year 2015, researched and written by the Indiana University Lilly Family School of Philanthropy and published by Giving USA Foundation, www.givingusa.org 22 Growth in charitable giving is often driven by prior-year growth of specific economic variables. For estate giving, this is true for individual/ household net worth. 23 Prior-year projections are not included in this report. Data for years prior to 2016 come from Giving USA 2016: The Annual Report on Philanthropy for the Year 2015, researched and written by the Indiana University Lilly Family School of Philanthropy and published by Giving USA Foundation, www.givingusa.org 24 Growth in charitable giving is often driven by prior-year growth of specific economic variables. For corporate giving, this is true for consumer sentiment. 25 Note that these are generalizations based on national-level data and are not necessarily indicative of a single corporation s philanthropy program and strategy. 26 Prior-year projections are not included in this report. Data for years prior to 2016 come from Giving USA 2016: The Annual Report on Philanthropy for the Year 2015, researched and written by the Indiana University Lilly Family School of Philanthropy and published by Giving USA Foundation, www.givingusa.org 27 Other factors that will affect education giving, both positively and negatively, include personal consumption expenditures on education, recreation services, nonprofit service output, healthcare services, and rate of consumption. Growth in charitable giving is often driven by prior-year growth of specific economic variables. For giving to education, this is true for personal consumption expenditures on education services, nonprofit service output, recreation services, education, and community school services. 28 René Bekkers and Pamela Wiepking, A Literature Review of Empirical Studies of Philanthropy: Eight Mechanisms That Drive Charitable Giving, Nonprofit and Voluntary Sector Quarterly, 2010, http://nvs.sagepub.com/content/ early/2010/09/10/0899764010380927.full.pdf 29 Giving USA 2016: The Annual Report on Philanthropy for the Year 2015, researched and written by the Indiana University Lilly Family School of Philanthropy and published by Giving USA Foundation, www.givingusa.org 30 The projected increases in giving to education in 2017 and 2018 will hold unless substantially large gifts were made in 2016 or will be made in 2017 but not in subsequent years. Information about large gifts comes from Giving USA 2016: The Annual Report on Philanthropy for the Year 2015, researched and written by the Indiana University Lilly Family School of Philanthropy and published by Giving USA Foundation, www.givingusa.org 31 Prior-year projections are not included in this report. Data for years prior to 2016 come from Giving USA 2016: The Annual Report on Philanthropy for the Year 2015, researched and written by the Indiana University Lilly Family School of Philanthropy and published by Giving USA Foundation, www.givingusa.org 32 Other factors that will affect health giving, both positively and negatively, include personal consumption expenditures on foreign travel, nonprofit sales, education services, pharmaceuticals, and clothing. Giving to health will also be negatively affected by total giving in the current year; giving to health appears to rise when giving to other subsectors is low. Growth in charitable giving is often driven by prior-year growth of specific economic variables. For giving to health, this is true for personal consumption expenditures on foreign travel, nonprofit sales, and education services. 33 Mark Rover, The Next Generation of American Giving: The Charitable Habits of Generations Y, X, Baby Boomers, and Matures, Blackbaud, 2013, www.blackbaud.com 34 Ann Foster, Consumer Expenditures Vary by Age, Bureau of Labor Statistics, Dec. 2015, www.bls.gov; Ann Foster, A Closer Look at Spending Patterns of Older Americans, Bureau of Labor Statistics, March 2016, http://www.bls.gov/opub/btn/volume-5/pdf/ spending-patterns-of-older-americans.pdf 35 This percentage reflects only those households that have that expense. Mark Lino, Expenditures on Children by Families, U.S. Department of Agriculture, 2013, https://www.cnpp.usda.gov/ sites/default/files/expenditures_on_children_by_ families/crc2013.pdf THE PHILANTHROPY OUTLOOK 2017 & 2018 33

36 Prior-year projections are not included in this report. Data for years prior to 2016 come from Giving USA 2016: The Annual Report on Philanthropy for the Year 2015, researched and written by the Indiana University Lilly Family School of Philanthropy and published by Giving USA Foundation, www.givingusa.org 37 Consumer expenditures on foreign travel is an indication of increases in luxury spending, in general. 38 Giving USA 2016: The Annual Report on Philanthropy for the Year 2015, researched and written by the Indiana University Lilly Family School of Philanthropy and published by Giving USA Foundation, www.givingusa.org 39 Giving USA 2016: The Annual Report on Philanthropy for the Year 2015, researched and written by the Indiana University Lilly Family School of Philanthropy and published by Giving USA Foundation, www.givingusa.org 40 Data are in inflation-adjusted (2015) dollars. 41 These figures are in inflation-adjusted dollars (2015) and derives from data in Giving USA 2016: The Annual Report on Philanthropy for the Year 2015, researched and written by the Indiana University Lilly Family School of Philanthropy and published by Giving USA Foundation, www.givingusa.org 42 This is according to historical data provided in Giving USA, compared with projected increases in the GDP and total giving in The Philanthropy Outlook. Giving USA 2016: The Annual Report on Philanthropy for the Year 2015, researched and written by the Indiana University Lilly Family School of Philanthropy and published by Giving USA Foundation, www.givingusa.org 43 Data for years prior to 2016 come from Giving USA 2016: The Annual Report on Philanthropy for the Year 2015, researched and written by the Indiana University Lilly Family School of Philanthropy and published by Giving USA Foundation, www.givingusa.org 44 Drew Lindsay, Peter Olsen-Phillips, and Eden Stiffman, Fidelity Overtakes United Way as New Charity Champion, The Chronicle of Philanthropy, Oct. 27, 2016, www.philanthropy.com 45 Giving USA 2016: The Annual Report on Philanthropy for the Year 2015, researched and written by the Indiana University Lilly Family School of Philanthropy and published by Giving USA Foundation, www.givingusa.org 46 Drew Lindsay, Joshua Hatch, and Brian O Leary, A New Way to Give: Inside the Donor-Advised Fund Explosion, The Chronicle of Philanthropy, Oct. 27, 2016, www.philanthropy.com 47 Donor-Advised Fund Q&A, DAF Direct, Retrieved Nov. 10, 2016, http://www.dafdirect. org/dafdirect/popups/donor-advised-funds- FAQs.pdf; DAF Advantages and Limitations, National Philanthropic Trust, Retrieved Nov. 10, 2016, www.nptrust.org; NPT Donor- Advised Funds: FAQ, National Philanthropic Trust, Retrieved Nov. 10, 2016, www.nptrust. org; What is a Donor-Advised Fund?, Fidelity Charitable, Retrieved Nov. 10, 2016, www.fidelitycharitable.org 48 Drew Lindsay, Peter Olsen-Phillips, and Eden Stiffman, Fidelity Overtakes United Way as New Charity Champion, The Chronicle of Philanthropy, Oct. 27, 2016, www.philanthropy.com; Drew Lindsay, Joshua Hatch, and Brian O Leary, A New Way to Give: Inside the Donor-Advised Fund Explosion, The Chronicle of Philanthropy, Oct. 27, 2016, www.philanthropy.com 49 Drew Lindsay, Peter Olsen-Phillips, and Eden Stiffman, Fidelity Overtakes United Way as New Charity Champion, The Chronicle of Philanthropy, Oct. 27, 2016, www.philanthropy.com 50 Ken Nopar, Donor-Advised Funds Are a Boon to Savvy Charities, The Chronicle of Philanthropy, Oct. 28, 2014, www.philanthropy.com, second-to-last paragraph 51 Krista Endsley, What Drives Donor Loyalty? Findings from the Latest Donor Research, Association of Fundraising Professionals [blog], June 11, 2016, www.afpfep.org 52 Sean Norris, 80 Nonprofit Trends for 2016, Nonprofit Pro, Feb. 9, 2016, www.nonprofitpro.com 53 Ray Gary, Crossing the Chasm: Nonprofit Fundraising Strategies and Systems Are All Wrong for This New World, Nonprofit Hub, Retrieved Nov. 10, 2016, www.nonprofithub.org; Sean Norris, 80 Nonprofit Trends for 2016, Nonprofit Pro, Feb. 9, 2016, www.nonprofitpro.com 54 Sean Norris, 80 Nonprofit Trends for 2016, Nonprofit Pro, Feb. 9, 2016, www.nonprofitpro.com, para. 7 55 Aaron Smith, U.S. Smartphone Use in 2015, Pew Research Center, April 1, 2015, www.pewinternet.org; Internet Use Over Time, Pew Research Center, retrieved Nov. 10, 2016, www.pewinternet.org 56 Ray Gary, Crossing the Chasm: Nonprofit Fundraising Strategies and Systems Are All Wrong for This New World, Nonprofit Hub, Retrieved Nov. 10, 2016, www.nonprofithub.org 57 Ray Gary, The Rise of the Connected Donor: Why Digital Matters More Than Ever, Top Nonprofits, Oct.13, 2016, www.topnonprofits.com 34

58 Dunham+Company Study: Explosive Growth in Donations Via Mobile Devices, Dunham+Company, March 23, 2016, www.dunhamandcompany.com 59 Ray Gary, 5 Things Nonprofits Need to Do to Move the Needle and Thrive, Philanthropy Journal News, Sep. 26, 2016, https://pj.news. chass.ncsu.edu/ 60 Giving USA 2014, Giving USA 2015, and Giving USA 2016, researched and written by the Indiana University Lilly Family School of Philanthropy and published by Giving USA Foundation, www.givingusa.org 61 2015 Blackbaud Charitable Giving Report, Blackbaud, 2015, www.blackbaud.com. Data excludes grants. 73 Shocks can develop as a result of global or regional conflict, inflation, economic downturns, or political upheaval. 74 Press Release, Board of Governors of the Federal Reserve System, Dec. 16, 2015, http://www.federalreserve.gov/newsevents/ press/monetary/20151216a.htm 75 Patrick Gillespie, Finally, Fed Raises Rates for the First Time in 2016, CNN Money, Dec. 15, 2016, www.money.cnn.com 76 Patrick Gillespie, Finally, Fed Raises Rates for the First Time in 2016, CNN Money, Dec. 15, 2016, www.money.cnn.com 77 Fed Raises Rates, Reuters, December 14, 2016, www.reuters.com, para. 1 62 Donald Drake, Crowdfunding Grows Up: 4 Trends That Will Shape and Shake 2015, The Huffington Post, Jan. 8, 2015, www.huffingtonpost.com; Crowdfunding Industry Statistics, 2015, 2016, Crowd Expert, Retrieved Nov. 10, 2016, www.crowdexpert.com 63 Aaron Smith, 4. Collaborative: Crowdfunding Platforms, Pew Research Center, May 19, 2016, /www.pewinternet.org 64 The Non-Profit Guide to Successful Crowdfunding, Ernest Barbaric, Retrieved Nov. 10, 2016, www.ernestbarbaric.com 65 Joe Garecht, How to Use Crowd-Funding Sites to Raise Money for Your Non-Profit, The Fundraising Authority, Retrieved Nov. 10, 2016, www.thefundraisingauthority.com; Crowdfunding for Nonprofits, National Council of Nonprofits, Retrieved Nov. 10, 2016, www.councilofnonprofits.org 68 Sean Norris, 80 Nonprofit Trends for 2016, Nonprofit Pro, Feb. 9, 2016, www.nonprofitpro.com 69 Sean Norris, 80 Nonprofit Trends for 2016, Nonprofit Pro, Feb. 9, 2016, www.nonprofitpro.com, (Pfeifer, Dale Nirvani); The 2013 Millennial Impact Report, Achieve, 2013, http://fi.fudwaca.com/ mi/files/2015/04/mir_2013.pdf 70 OECD Sees Resurgent US Growth Boosting Global Economy, Reuters, Nov. 28, 2016, www.cnbc.com 71 These figures are projections created for the purposes of The Philanthropy Outlook and are higher than the IMF projections. Other forecasts report similar trends: http://projects. wsj.com/econforecast/#ind=gdpa&r=10 72 OECD Sees Resurgent US Growth Boosting Global Economy, Reuters, Nov. 28, 2016, www.cnbc.com 66 Ray Gary, 5 Things Nonprofits Need to Do to Move the Needle and Thrive, Philanthropy Journal News, Sep. 26, 2016, https://pj.news. chass.ncsu.edu/ 67 Derrick Feldmann, Inspiring the Next Generation: The 2014 Millennial Impact Report, Achieve, 2014, http://fi.fudwaca.com/ mi/files/2015/04/mir_2014.pdf; The 2013 Millennial Impact Report, Achieve, 2013, http://fi.fudwaca.com/mi/files/2015/04/ MIR_2013.pdf; Millennial Running Study, Achieve, 2016, http://fi.fudwaca.com/ mi/files/2016/11/achieve-millennial- Running-Study-Phase-II.pdf; The 2006 Cone Millennial Cause Study, Cone Inc., 2006, http://www.centerforgiving.org/ Portals/0/2006%20Cone%20Millennial%20 Cause%20Study.pdf 78 Lydia O Neal, Oil Prices 2016: OPEC Members Shooting for up to $60 Per Barrel, Iran Minister Says, International Business Times, Nov. 21, 2016, www.ibtimes.com 79 Tyler Yell, Crude Oil Price Forecast: Crude Bounces on Hope OPEC Salvages Deal, Nasdaq, Nov. 15, 2016, www.nasdaq.com 80 Oil Price Surges to Highest Level in a Year, The Week, Dec. 2, 2016, www.theweek.co.uk 81 Timothy Puko, Reasons Why Oil Prices Could Fall Further, The Wall Street Journal [blog], Nov. 16, 2016, http://blogs.wsj.com/ briefly/2016/11/16/5-reasons-why-oil-pricescould-fall-further/ 82 World Bank Ups Its 2017 Oil Price Forecast to $55, Nasdaq, Oct. 25, 2016, www.nasdaq.com; Economic Forecasting Survey: Oil Prices, The Wall Street Journal, Retrieved Nov. 2016, www.wsj.com THE PHILANTHROPY OUTLOOK 2017 & 2018 35

83 Civilian Unemployment Rate, FRED, Economic Research, Dec. 2, 2016, https://fred.stlouisfed.org/series/unrate 84 Economic Forecasting Survey: Unemployment, The Wall Street Journal, Retrieved Nov. 2016, www.wsj.com 85 Economic Forecasting Survey: CPI, The Wall Street Journal, Retrieved Nov. 2016, www.wsj.com 86 Timothy Sandoval, Nonprofits See Unprecedented Support Following Trump s Win, The Chronicle of Philanthropy, Nov. 15, 2016, www.philanthropy.com 87 Timothy Sandoval, Nonprofits See Unprecedented Support Following Trump s Win, The Chronicle of Philanthropy, Nov. 15, 2016, www.philanthropy.com, para. 3 88 OECD Sees Resurgent US Growth Boosting Global Economy, Reuters, Nov. 28, 2016, www.cnbc.com 89 Data for consumer sentiment come from the Consumer Sentiment Index, Federal Reserve Bank of St. Louis (FRED), http://research. stlouisfed.org/fred2/series/umcsent. 90 Data for corporate saving come from Bureau of Economic Analysis, U.S. Department of Commerce, http://www.bea.gov/itable/ index_nipa.cfm; Data for corporate profits come from Bureau of Economic Analysis, U.S. Department of Commerce, http://www.bea. gov/national/index.htm 91 In The Philanthropy Outlook 2016, the predicted growth rate for employment in 2015 was 1.1%, while the preliminary actual growth rate was 2.1%. Final 2015 values were not yet available at the time this report was released. 92 In The Philanthropy Outlook 2016, the predicted growth rate for GDP in 2015 was 2.7%, while the preliminary actual growth rate was 2.6%. Final 2015 values were not yet available at the time this report was released. 93 The actual value of household and nonprofit net worth was not yet available for 2016 at the time this report was released. 94 Data for the interest rates of governmental securities come from Federal Reserve Bank of St. Louis (FRED), http://research.stlouisfed. org/fred2/series/gs1 95 In The Philanthropy Outlook 2016, the predicted growth rate for personal income in 2015 was 2.9%, while the preliminary actual growth rate was 3.9%. Final 2015 values were not yet available at the time this report was released. 96 This variable was not used comprehensively in prior Outlooks; therefore, cannot yet be tested for accuracy. 97 This variable was not used in prior Outlooks; therefore, cannot yet be tested for accuracy. The exceptions to stable personal consumption expenditure indicators are: K-12 education services, community school services, clothing, and foreign travel. 98 This variable was not used comprehensively in prior Outlooks; therefore, cannot yet be tested for accuracy. 99 In The Philanthropy Outlook 2016, the model predicted a 2015 growth rate for the S&P 500 of 6.3% while the realized value was -2.1%. This difference is well within expected variance. Final 2016 values were not yet available at the time this report was released. 100 Note that the predictions for 2016 economic data were made prior to the 2016 calendar year closing. Because the growth rates noted are predictions, these figures will vary from those publicly available at the time of release of this report. 101 Only the percentage changes for projected giving in 2017 and 2018 are reported in The Philanthropy Outlook 2017 & 2018. 102 The Root Mean-Squared Error (RMSE) is a standard measure of forecast quality with lower values of the RMSE indicating greater predictive ability. See the Technical Appendix at www.philanthropyoutlook.com for the formula. 103 Only the percentage changes for projected giving in 2017 and 2018 are reported in The Philanthropy Outlook 2017 & 2018. 104 Also referred to as the explanatory variables. 105 What is Disposable Income?, Investopedia, Retrieved Dec. 4, 2016, www.investopedia.com, para. 1 106 Chapter 5: Personal Consumption Expenditures, Bureau of Economic Analysis, Retrieved Dec. 4, 2016, https://www.bea.gov/ national/pdf/nipahandbookch5.pdf, para. 1 107 A Guide to the National Income and Product Accounts of the United States, Bureau of Economic Analysis, Retrieved Dec. 4, 2016, http://www.bea.gov/national/pdf/nipaguid.pdf 36

About Indiana University Lilly Family School of Philanthropy The Indiana University Lilly Family School of Philanthropy is dedicated to improving philanthropy to improve the world by training and empowering students and professionals to be innovators and leaders who create positive and lasting change. The School offers a comprehensive approach to philanthropy voluntary action for the public good through its academic, research and international programs and through The Fund Raising School, Lake Institute on Faith & Giving and the Women s Philanthropy Institute. For more information, visit www.philanthropy.iupui.edu Follow the school on Twitter @IUPhilanthropy or Like the school on Facebook at https://www.facebook.com/iuschoolofphilanthropy About Marts & Lundy Marts & Lundy has been the innovative leader in fundraising and philanthropy consulting for nearly 90 years. With nearly 40 full-time Senior Consultants and Analysts, Marts & Lundy offers clients an unparalleled depth of expertise and breadth of perspective on philanthropy. Since 1926 the firm has served thousands of clients, whose annual giving programs range from hundreds of thousands to millions of dollars and whose campaigns range from a few million to several billion. Founded in the belief that philanthropy has the power to transform not only institutions but, more importantly, the world in which we live, Marts & Lundy remains steadfastly committed to contributing innovative thinking and thought leadership to the profession of fundraising. You can find Marts & Lundy on Twitter @MrtsAndLndy and on LinkedIn and Facebook.