“The greatness of a community is most accurately measured by the compassionate actions of its members.” – Coretta Scott King

Photo Source: Giving USA

June 20th marked the much-anticipated release of the Giving USA 2023: Perspectives on Philanthropy Report, the most common and longest-giving report on philanthropy, and we’re here for it! The report was presented by CCS Fundraising in partnership with the Indiana University Lilly Family School of Philanthropy. Dr. Una Osili, IU’s Associate Dean for Research and International Programs, was the driving force behind the report. The 2023 report includes the latest trends in U.S. philanthropy, valuable insights into the current and future state of charitable giving, as well as the significance and implications of the 2022 data.

The report details the extraordinary generosity of Americans of all different backgrounds during the very turbulent times of the pandemic, the war in Ukraine, economic challenges, and recent record levels of inflation. The biggest takeaway is the $499.3 billion in giving during 2022. People are inherently generous, and while that is a remarkable amount and higher than last year, due to inflation, it is actually a decline of 3.4 percent over the previous year – a notable decrease. Yet, we’re cautiously optimistic.

40-year trends and current allocations

Individual giving

Individual giving has always been the largest slice of American philanthropy accounting for 73 percent in 2022 (including bequests). However, giving trends are clearly linked to household economic conditions, incomes, the stock market, etc., and those trends are on the decline (-6.4 percent in current dollars / -13.4 percent in inflation-adjusted dollars).

In the big scheme of things, the primary focus for consumers is food, housing, clothing, etc., and then, maybe, philanthropy. Less than HALF of Americans give (a decline accelerated during the Great Economic Recession). Here is an example of that in action: Let’s say you were donating $100 every year to an organization, but then over the past year, you really felt the sting of inflation. You probably didn’t think to yourself, “Maybe I should give $108 (eight percent inflation). In fact, you probably instead thought, “Groceries are getting expensive and the economy is looking unstable, so maybe I should pause my giving this year and start again next year.” Yikes. 

The giving environment in 2022 had many challenges including inflation reaching a 40-year high, the stock market declining by 20 percent (when adjusted for inflation), increases in energy and food prices, and a decline in disposable income. Those challenges produced the need for new giving models, increased innovation, new leadership, and fresh mindsets, all resulting in renewed resilience. 

Thankfully, the United States is a diverse nation of givers (from a large swath of ethnicities, ages, religions, and backgrounds), and there were record levels of giving even during those challenging times. Additionally, our “giving economy” is more sophisticated than it’s ever been with a variety of giving vehicles available to donors today that weren’t available to donors forty years ago (i.e. online giving platforms and apps, crowd-funding, etc.). 

Corporate and foundation giving

Corporate and foundation giving saw a two-year growth. While corporate giving was at two percent in the 1970s, it is now below one percent, but charitable bequests are on the rise. Foundations have increased their payout rates and have made significant changes to their giving decisions. Their giving has increased over the years (especially during the 1990s), and currently comprises 21 percent of all giving.

Corporations stepped up their contributions during the pandemic and also became more innovative and strategic in how they invested and allocated funds, including pouring more into cause-based and workplace giving.

The share of giving by religious organizations has declined significantly to under 30 percent however they still play a significant role. Human services and the educational sub-sectors were hugely impacted by the economy in 2022 and understandably, each saw increases in giving during the pandemic. Environmental giving and donations to animal causes remained steady (though it’s difficult to show 40-year-trends since they weren’t tracked back in the 1950s-60s). Additionally, giving in the international affairs subsector ranks at six percent of all giving, yet it wasn’t tracked until 1987.

How and where to engage

 While donors may be down, dollars are up! And with the lion’s share of American philanthropy coming from individuals, nonprofits need to engage “individual” donors of all different backgrounds (age, race, ethnicity, etc.), as they represent the most diverse segment of giving. Keep in mind too that individuals are more likely to give when they have a high degree of confidence in whom or what they are giving to. 

Did you know that only five percent of Americans can share that they know the value of nonprofits? That is a sad number. But with many Americans expressing a declining trust in state and local governments and large organizations, nonprofits have the opportunity to move into a more trusted capacity. Nonprofits can grow their confidence by doing a better job at sharing their missions and how they impact their communities both locally and globally. Being authentic and engaging will help them build trust. 

Click here to learn how to deepen your relationships with donors by better understanding their perspectives, motivations, and priorities.

Corporations also need to make significant changes in how they give. The old go-to was through foundations or direct contributions but they need to focus on being more strategic in their philanthropy. They should continue exploring the new range of giving vehicles available to them such as LLCs (i.e. direct grants to small businesses and black/brown entrepreneurs), cause marketing (see Tom’s Shoes One-for-One Impact as an example), and nonprofit marketing-related sponsorships. 

Additionally, corporations need to meet donors where they are–engaging them in spaces where they are already. For example, younger Americans buy from certain companies (conscious consumption) as part of their giving. Listen here to learn how millennials use community engagement and philanthropy to drive their goals and social activities.

Another often-overlooked solution to philanthropy is volunteerism. In a future blog, we’ll address how volunteering is a great way to get donors to feel the impact of an organization’s work. It can also be a great anecdote to the disconnect so many of us felt during the pandemic. Shout out to our friends at VolunteerMatch.org for 25 years of leadership in this space.  

The future looks bright

There is a lot to celebrate in the nonprofit resiliency that was developed during the past few years of the pandemic. For example the increase in online giving, crowd-funding (especially with the younger generation), and building the future pipeline of donors. The notion of philanthropy has also expanded to donors sharing their voices more, using their platforms, and giving testimonies to their causes.  

Here are the findings from Giving USA’s 2022 report and 2021 report. Other research about global philanthropy indices can be found here.

LSC is a bespoke consulting firm serving nonprofits across the country as they embark on transformational change. From the master mindset of a 10-figure fundraiser to the operations of a harmonious fundraising team. We offer executive coaching, board retreats, annual planning, capital campaign management, and major gifts donor engagement strategies. We can help you interpret the report and activate an approach.

Get started by following me on LinkedIn! In addition to consulting nonprofits on best fundraising and management practices, I also serve as a keynote speaker at conferences, board retreats, and seminars. You can find me on Spotify, Instagram, Facebook, Clubhouse, or my website.