New ‘Giving USA’ Report Signals Turbulence Ahead for Fundraisers

By Laurence A. Pagnoni, MPA

The pre-eminent source of annual data about giving and philanthropy in the United States — Giving USA Foundation — this week released its 2021 report.

This year’s edition offers a mixed bag of news for fundraisers and sends a few warning signals about what we can expect in the balance of 2022.

But before the warnings, some good news:

Charitable giving totaled a near-record $484.9 billion in 2021, which was flat when compared to 2020. That’s considered a win, especially since COVID-19 sparked an 8.1% annual increase in giving in 2020, and many observers feared that giving would retreat in 2021.

Giving was especially strong among foundations, which increased their giving by 3.4%, to $90.9 billion, and corporations, which jumped by 23.8%, to $21.1 billion.

Buried in this year’s Giving USA results are some concerning trends —  all of which are important for fundraisers to note as they set expectations and refine their strategies for the year’s second half.

Signs of Concern

In a Giving USA webinar that previewed the results, a panel of fundraising experts and nonprofit leaders warned that mounting inflation, a declining stock market, and growing concerns about a recession are likely to chill donors’ willingness to give this year.

Nathan Dietz, senior researcher for the Do Good Institute at the University of Maryland, notes that these economic conditions are likely to affect giving significantly — in ways we haven’t seen since the 2008 recession.

He also expressed concern about another trend: the decline in the percentage of households that contribute to charitable causes. While giving totals have been rising in recent years, that growth has been fueled by wealthy megadonors, who are making up a larger share of the overall giving pie. Mega-gifts by individuals totaled $15 billion in 2021, representing about 5% of all giving by individuals, according to the Giving USA data.

That may seem like a small share overall — but it’s been growing significantly in recent years, and as the mega-rich continue to get richer, it signals a troubling shift in power.

Mary Dana Hinton, the president of Hollins University, says this is a significant trend, since it means that fewer individual donors are making annual gifts — the contributions that sustain many nonprofits over the long term.

Annual givers are also more likely to make planned gifts — so a smaller pipeline of annual supporters could lead to fewer transformational legacy gifts down the line.

It’s worth noting that bequest giving dropped by 11.4% in 2021 when adjusted for inflation — accounting for about $46 billion in gifts. Bequests are known to be especially volatile from year to year. But this drop, coupled with the decline in the share of donors, bears continued attention.

Other Trends to Watch

Other trends worth mentioning from this year’s report:

  • Giving to environment, public-society benefit organizations, and foundations grew by 15% or more over each of the past two years. Environmental nonprofits remain the smallest category of organizations, but they have shown consistent and robust growth over time — suggesting that they’ll continue to grow their share.
  • While arts-and-culture and health organizations struggled in 2020, both categories rebounded in 2021 — bolstered by a strong stock market and a return to in-person activities.
  • Although giving by foundations and corporations grew in 2021, individuals still drive the lion’s share of charitable giving in the United States. Giving by individuals accounted for two-thirds of all contributions in 2021 — totaling $326.9 billion.

“Giving USA” is researched and written by the Indiana University Lilly Family School of Philanthropy and is led by the Giving USA Foundation. The full report will be available in July at www.givingusa.org.

How does your experience match these takeaways? Please share this post with a colleague who may appreciate it.

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