The newest version of Giving USA’s Annual Report on Philanthropy was released on June 25, 2024. For over 60 years, nonprofit professionals have counted on Giving USA to collect and share definitive data about charitable giving trends that provide insight and intrigue to this most American of traditions. This year’s report is packed with hundreds of pages of insightful data and statistics related to the $557.16 billion that was donated in 2023. The LSC team has highlighted the most notable trends from this year’s report for you and provided some considerations for you to make.
The past five years have seen more turbulence than anyone could have imagined: a worldwide pandemic, a long overdue reckoning for racial justice, a recession, a higher-than-average increase in inflation, and the list goes on and on. Yet, one thing has remained constant throughout this time: Americans are continuing their time-honored tradition of philanthropy and supporting charitable organizations that are the backbone of our society.
Following are five highlights from this year’s report geared for nonprofit leadership:
#1 Individual Giving: Individuals Remain the Drivers of American Philanthropy
Gifts from individuals remain a cornerstone of philanthropy, emphasizing that they continue to be the primary drivers of the sector. While the proportion of overall support from individuals was 67% in 2023 (down from 82% in 1983), individuals still represent the largest slice of the pie as charitable donors. In fact, giving by individuals over the last five years totaled a staggering $1.9 trillion! Furthermore, Donor-Advised Funds (DAFs) continue to show solid growth, allowing individual donors to make impactful contributions with flexibility and strategic focus.
What to consider:
The total chunk of the pie might be smaller, but Individual donorship is still where the majority of funds originate. Focusing on building strong cultivation and stewardship practices deepen donor relationships and build a sense of ownership over shared wins and losses.
#2 Growing the Pipeline: Foundations and Multigenerational Philanthropy
Building a robust community of prospective donors (donor pipeline) is essential for sustainable philanthropy and charitable impact. Family foundations and families that engage their younger generations in philanthropy continue to extend the reach of individual giving, playing a critical role in the nonprofit sector. Some of the downturn in individual giving could be attributed to an increase in family foundations, a reflection of the growing wealth of older adults, which has increased by 30% since 2019.
What to consider:
Younger donors are particularly motivated by social movements, making it important for nonprofits to clearly communicate how their mission is intertwined with a tapestry of social, environmental, and humanitarian causes that resonate deeply with donors’ passions. Additionally, engaging younger generations with their older relatives early on can ensure a steady stream of support for years to come. It takes a broad community of supporters offering the fuel of resources, influence, money, tech, and testimony to advance impact driven organizations. Consider building a “Decision Tree” to streamline engagement opportunities at all ages and giving capacities.
#3 Planned Giving: Long-Range Conversations
Planned giving represents a significant opportunity for nonprofits. These gifts can be larger than annual donations and often provide a stable and predictable source of funding for organizations once a planned giving program has been fully established. It’s no surprise that with the overall wealth of the older generation increasing, bequests accounted for 8% of giving in 2023, with expectations for even more growth in the coming years. Initiating conversations with donors around planned giving can also help open the door to encouraging the next generation to get involved.
What to consider:
Some of your most loyal annual donors are also some of your best planned giving prospects. Mine your database and focus on stewarding relationships with existing donors to transform them into planned giving donors, leveraging their long-term commitment to maximize impact.
If you aren’t sure where to start, LSC recommends having deeper conversations with your most passionate leadership-level supporters. Ask these donors to clearly articulate their support and specifically ask them what they want to see as their philanthropic legacy. Don’t be afraid to have bold and direct conversations. Use transitional phrases and permission-based questions to guide you into more and more authentic and direct conversations. (Check out our blog on High Value Questions, HVQs or contact LSC directly for a short tutorial.)
Furthermore, don’t make decisions for your donors. Present opportunities for impact through philanthropy. Be bold, set the vision, make the ask, and then let your prospects (no matter their wealth!) make their own decisions.
#4 Sectors on the Rise: What’s Up in 2024
Giving to most recipient categories grew in 2024 when inflation-adjusted:
- Environment: Environmental causes continue to grow in popularity, reflecting increased awareness and urgency around environmental and climate issues. This category of giving didn’t even exist in 1983, and now it represents 4% of all charitable gifts in 2023.
- Human Services: This sector has seen growth in three out of the past four years. Typically, interest in Human Services spikes during moments of great need, and then is followed by a sharp decline. No such decline has been seen in recent years. Behavioral health, a new sub-category that was not even tracked several years ago, is particularly gaining attention.
- Education: The education sector reached a new high in 2023 and continues to be the strongest sector, attracting several transformational/mega gifts.
- Religion: Giving to religious institutions has experienced the sharpest decline over the last 40 years, from 63% of all charitable giving in 1983 to 24% currently. Despite this decline, we still see that religious values influence giving, with many donors supporting causes aligned with their beliefs.
What to consider:
Staying committed to your mission is powerful. In a world where trends constantly evolve, focusing on your long-term goals is vital. Donors value organizations that demonstrate consistency and a clear vision for the future. Remember, many of today’s popular causes didn’t even exist 30 years ago. Enduring missions have the strength to weather changes in trends and priorities.
By staying true to your mission and regularly communicating its long-term impact, you build trust and loyalty among your supporters. Donors appreciate the foresight and stability that come with a ambitious yet achievable goals. As you continue to seek donations from supporters, be sure to highlight the many ways in which their support drives lasting change for your organization. Consistency and dedication to your mission will ensure continued support and meaningful impact.
#5 Innovation and Experimentation: Embracing the New
Innovation is driving philanthropy forward in a variety of ways. Donors are increasingly open to experimenting with new ways of giving. Foundations, in particular, are starting to provide more flexible funds that allow for greater innovation, responding to a decade-long push for less restrictive giving. Some organizations are starting to experiment with AI in their donor engagement. While not particularly new, online giving continues to be an increasingly popular way for donors to make their gifts: 10% of all charitable revenue in 2023 was received online.
What to consider:
Leverage this innovation trend by thinking outside of the box and presenting bold, innovative ideas that inspire donors. Corporations are also exploring new avenues for support beyond their traditional philanthropic buckets. For example, securing event sponsorships, providing volunteer opportunities for employee engagement, and establishing cause-marketing partnerships are some great ways to engage corporations beyond outright donations. Diversifying fundraising strategies can open up new opportunities for nonprofits.
Online, peer-to-peer fundraising is also gaining traction, particularly among the Millennial and GenZ cohorts. This approach diversifies fundraising strategies and taps into the personal connections and passions that drive giving. Technology continues to reshape the nonprofit sector, making it easier for donors to give in a variety of ways. Online giving is on the rise, with nonprofits now accepting payments through platforms like Venmo, PayPal, credit cards, and even cash transfers. Leveraging technology to stay connected with donors, share impact stories, and celebrate wins can enhance donor engagement and retention.
This year’s Giving USA report underscores the enduring resilience and adaptability of the nonprofit sector. Charitable organizations have demonstrated unwavering commitment to their missions, leveraging innovation and embracing new opportunities for engagement. Let us remain focused on our long-term goals, cultivate meaningful relationships with donors, and embrace innovation to drive lasting impact in our communities. We can continue to make a difference and build a brighter future through collective effort and dedication.
Are you ready to elevate your team, increase your funds, and watch your program grow?
At LSC, we are committed to empowering the nonprofit community to unleash its full potential. Through board and staff training, executive coaching, and leadership development, we equip organizations with the tools and strategies they need to thrive in a rapidly changing world. The capital campaigns we direct increase cash flow 2-10x what the organizations are raising annually. Reach out to start a conversation and discover how we can partner with you to make magic happen in your organization today.
