The newest version of Giving USA’s annual report on philanthropy was released in late June 2022. For more than forty years, Giving USA has been providing fundraisers, nonprofit leaders, donors, and other individuals with comprehensive charitable giving data that helps inform decisions, strategies, and fund allocations.
Coming off of a turbulent 2020, Americans remained generous, forward-focused, and committed to doing good in 2021. The full Giving USA 2022 report is packed with dozens of pages of insightful data and statistics (behind a paywall!), so LSC has highlighted the most notable trends from this year’s report for you. Let’s get into it!
#1 To Contribute is to Be American, Even in Turbulent Times
In good times and bad, philanthropy at large is resilient. GivingUSA’s 2022 report proved that there was no “compassion fatigue” among Americans in 2021, even after a year of record generosity in 2020. Thanks to a strong year for the stock market and GDP, charitable giving in 2021 kept pace with 2020’s record highs. While total charitable giving in 2021 grew by 4.0%, when adjusted for inflation, giving levels essentially stayed flat with 0.2% growth.
What to consider: We are more than halfway through 2022 and words like “recession” and “inflation” seem to be the buzzwords of the summer. Though Americans have maintained a strong tradition of generosity; however, we must acknowledge that charitable giving slumped during the Great Recession of 2008 and took about three years to rebound back above pre-2008 levels.
The nonprofit sector was pleasantly surprised when giving grew during the height of COVID-19 in 2020, and many unprepared nonprofit organizations narrowly escaped trouble. As we barrel toward an ambiguous future, does your organization have a plan? Now is the time to have conversations about endowments, rainy day funds, and general reserves. Americans are generous, but times are unprecedented. You can use the turbulent times to your advantage by communicating clear calls to action.
People want to see their passion and priorities fulfilled through charity. They want to see your Theory of Change activated with their dollars. Supporting your mission through funding, volunteering, advocating and more is a way you give a donor the opportunity to make a difference in a time when current events can feel paralyzing. Invite us to give in meaningful and specific ways and show us the impact of our money put to work!
#2 Mega Donors Reign Supreme
Giving by individuals came to 67% of total giving in 2021—due largely in part to “mega-gifts” from High Net Worth Individual (HNWI) donors. These very large gifts totaled over $15 Billion last year and represented about 5% of all individual giving in 2021.
Major philanthropists like Mackenzie Scott are causing major shakeups. Foundations are giving increasingly unrestricted gifts and simplifying their application processes. This is great news all-around, as foundations are progressively ceding power and attention to organizations doing the work. If Scott’s grants have taught us anything, it’s that trust-based and relationship-based philanthropy have the highest impact. Nurture your relationships in the good times and the bad.
What to consider: While this isn’t bad news, it does raise the concern that average American households have started to see philanthropy as something for the wealthy to take care of. Though 50% of all American households give $2,581 on average, it’s on the decline. That is a problem. Nonprofit leaders must carefully consider how they can strategize their outreach to ensure more families feel compelled to contribute, know how to contribute, and—most importantly—want to contribute.
Mega Gifts in 2020 were $10.1 billion compared to $14.9 billion in 2021. During the same time, the increase in the number of billionaires was 107 between 2020 (2,668) and 2021 (2,755). In 2021, total giving as a percentage of GDP decreased from (2.3% in 2020 to 2.1 in 2021), but nearly $5 billion more in gifts were attributed as mega-gifts. We conclude that UHNW continued to play an increasingly larger role in 2021. Mathematically speaking, $4.8 billion less was contributed by non-UHNW individuals. With an average gift of $131 for non-UHNW individuals, this equates to over 34.8 million less charitable gift transactions given by individuals in 2021 alone.*
If you aren’t sure where to start, LSC recommends paying attention to your most influential caliber of donors. Ask those donors to clearly articulate their support and specifically ask others to contribute as well. Activating testimony is critical in these socially motivated times. (The four “Ts” are: Time, Talent, Treasure, and Testimony.)
Furthermore, don’t make decisions for your donors. Present opportunities for impact delivery through philanthropy. Don’t assume that since a donor gave less last year they won’t give more this year or that because they are upset about something that happened at your organization that they don’t still believe in your mission and want to fund it writ-large. Be bold, set the vision, make the ask, and then let your prospects (no matter their wealth!) make their own decisions.
#3 Corporate Giving is Growing, but is it Growing Fast Enough?
Corporate giving showed the strongest growth (~4%) of the four categories (individual, corporate, foundations, bequests) in 2021 upon first glance. Yet, when we take into consideration that GDP increased 10.1% and corporate pre-tax profits increased 37.4%, it becomes clear that corporate giving is actually at a low point compared to the overall profits the for-profit sector is experiencing.
What to consider: Corporations fared well as they bounced back from the shock of COVID-19 and their pre-tax profits grew in 2021, but organizations rushing to put all of their eggs into this basket mustn’t forget how quickly corporate giving dried up when the market went south in 2020. Beyond the volatility of this giving source, it’s also important to keep in mind that corporate giving, when it does come, comes with a good amount of red tape.
In fact, American Charities reported that 33% of corporate employees do not give through their employer because the causes and organizations they are most passionate about are not included in their company’s giving programs. As we move into the future, nonprofits should use these data points to continue to push for adequate corporate giving while also prioritizing connections with individuals at the companies, not just their C-Suite representatives. Volunteer engagements for swaths of employees is becoming a preliminary norm for funding to follow; however, be sure that you’re not letting the tail wag the dog. Prioritize your mission, then generating funds for it, and then corporate social responsibility volunteer engagement opportunities catered to those mega donors.
#4 Seven Out of Ten Sub Sectors Grew More Than 5% in the Last Two Years
While a number of sub sectors that experienced a decline in 2020 were able to rebound in 2021, the inverse was also true as several sub-sectors that experienced strong growth in 2020. Education and human services did not fare as well in 2021. However, over a two-year period, the majority of nonprofit subsectors grew by over 5%, even when adjusting for inflation. Here’s some 2021 quick stats:
- Environment, public-society benefit, and foundations grew over 15% each over the course of 2020 and 2021. In fact, giving to public-society benefit organizations has grown in 11 of the last 12 years.
- Giving to arts, culture, and humanities had a strong recovery from low 2020 levels and is estimated to have increased 27.5% in 2021— back to pre-pandemic levels.
- Giving to health increased 7.7% from a slow 2020.
- Giving to religion gained moderate growth after a decline in 2020.
- Education, international affairs, and human services each experienced low growth or declines in 2021. Still, their two year growth was strong (11% or higher for each).
What to consider: There is a power in staying focused. We will undoubtedly continue to be inundated with news around the pandemic, economy, politics, war, etc. Stay focused on your mission. Don’t get caught up in the anticipation and speculation around decreasing giving and economic downturn. If you stay the course with clear and frequent communication about the impact of giving – and you continue to ask for contributions – you will see more funds flowing to you. As Lindsay’s mom always says, “Plan your work, and work your plan!” Remember that donors favor the prepared and the courageous. Share your bold vision with conviction!
#5 The Times They Are A-Changin’ (Permanently)
More than anything, GivingUSA’s 2022 report shows us that the nonprofit sector is changing and, if you want to be successful, you’ve got to keep up! For the first time, online giving represents 12% of all giving. It’s abundantly clear that technology will continue to play a key role as hybrid-models become commonplace and electronic ways of giving – text to give, click to give, cryptocurrency, and recurring-giving – grow more popular.
What to consider: Get to know your data. Audit online donation tools and processes to be sure that people can easily give online at any level within THREE minutes or less. Then, use technology to share impact, acknowledge giving, celebrate wins, and stay in touch. Customize your automated mail to resonate with the human behind the technology – most CRM tech these days has tools for this! Speaking of automation, get those recurring gifts (and pledges) automated. Recurring giving programs have record high retention rates ranging between 80-90%!!
Challenges and changes from 2020 are continuing to shape the nonprofit sector—staffing challenges, supply chain issues, elevated demand, hybrid workplaces, the list goes on. In order to stay with-the-times, nonprofits absolutely must maintain a sense of flexibility and innovation. Encourage your community to volunteer, contribute, and speak up. Leave no stone unturned. Out with the old and in with the new!
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.
* Thank you, Nathan Chappell, co-author of the Generosity Crisis for your study of national giving, sharing those findings, and offering guidance to our community about the importance in developing meaningful connections with donors to combat the decline of giving from the average American.