Consumer confidence bounces back in May to remain at 'historically strong levels.' Wages are up as economy grows. University of Michigan Consumer Sentiment measure rises while confidence in the future decreases slightly.

When consumer confidence grows, nonprofit giving naturally grows as well right? Not necessarily.

Studies have shown consumer confidence can be a good predictor of consumption and that often the US consumer confidence is a leading indicator to the Euro zone consumer confidence. There is also a link between media reporting and consumer confidence, reinforcing a consumer's personal experience with reporting in the media.

However, as Blackbaud found in the 2016 Charitable Giving Report, economic growth doesn't always equate to increased charitable giving. The Atlas Giving Report likewise has found no correlation between either the Consumer Confidence benchmark number or the UM Consumer Sentiment and giving.

I'm proposing these three theories for why giving has been soft despite -- or perhaps even because of -- strong consumer confidence and economic growth.

Lower Dollar Donors are Distracted by Summer Vacation

As US wages have grown, retail spending has increased as well. We only have complete numbers for May, but retail spending should continue growing throughout the summer. Many families forwent vacations in previous years or spent less on vacations. With a growth in wages and retail spending, as well as consumer confidence, people who have put off vacations will spend more to "catch up" from previous years. Increased retail spending and vacations will reduce philanthropy. Likewise, distraction for these summertime activities will reduce attention to nonprofit appeals.

Midlevel Donors are Increasingly Relying on Donor Advised Funds

In 2016, contributions to Donor Advised Funds (DAF) reached $23.27 billion in 2016 while grants reached only $15 billion. Assets under management reached $85 billion in 2016. That's a considerable amount of resources not in the hands of nonprofits.

Sophisticated donors like the ease of contributing to DAFs and managing distributions to nonprofits. With economy expansion, the sophisticated donor believes resources are better in his hands than the nonprofit. He can wait until he believes the economy is at a peak and then donate the assets to the nonprofit.

For this donor, giving is commensurate with personal wage growth and confidence, but is not yet in the hands of the nonprofit.

Politics and Media are Interfering with Optimistic Consumer Outlook

Though consumer optimism is growing for personal economics, continued international instability, a continuous disruptive political fight, and negative media is contributing to prospective donors "tuning out" and focusing on family, hobbies, and work. The distractions are causing donors to ignore nonprofit appeals.

Your appeals aren't getting read and aren't likely to until the fall.

What's the Good News?

These three factors are contributing to soft giving to nonprofits in the late spring and into the summer. The good news is many of these same factors could contribute to strong end of the year giving in 2018. As the distractions of the summer and back to school are behind us, and if consumer confidence continues to remain strong, donors should feel more generous at end of the year than in most recent years.

Last year, several disasters took a lot of giving out of traditional end of the year giving. If we have fewer disasters, this giving quarter should be stronger for most nonprofit organizations.