Giving USA published their annual report on charitable giving in the United States. You can download a copy here. The research is conducted by Indiana University Lilly Family School of Philanthropy. The report studies national trends across sectors and compares approaches to giving. The full report is 377 pages, if you’re like me and want to geek out on the data, but an executive summary is also available. What were the key trends in 2023? Let’s break them down.
Overall, the research concluded that charitable giving rose in 2023 by 1.9% in current dollars but declined by 2.1% when adjusted for inflation. Adjusting for inflation is important because it takes into account the value of the dollar over time. Essentially, it is a norming factor that allows for equitable comparison. Given the higher inflation rates in 2023, many of the statistics that appear positive, actually represent a slight decline when adjusted for inflation.
The variance from positive to negative isn’t uncommon when the current dollar percentage is less than 3%. Giving by individuals, foundations, and corporations followed a similar trendline, all straddling the positive in current dollars and showing a slight negative when adjusted for inflation. While giving to religion, human services, and international affairs all hovered in the 3% range, giving to education, foundations, public-society benefit, arts, culture, and humanities all saw a double digit increase. So what does any of this mean?
If you evaluate where donor’s dollars went, giving to religion remains at the top of the leaderboard receiving 24% of total contributions. Human services and education tied for second, each receiving 14%. Human services slightly outperformed education when you evaluate dollars contributed, $88.84 versus $87.69 respectively. Individuals continue to be the primary source of contributions. They represent 67% of all contributions received while corporate giving only represents 7%.
In 2021, giving reached a high in the United States, even after being adjusted for inflation. In 2021, total contributions generated $621 billion in inflation-adjusted dollars. By comparison, 2023 saw $557 billion. The sharp rise in 2021 has been previously attributed to the COVID-19 pandemic by researchers. You can read more about that here. What happens when we remove the pandemic anomaly?
The same report by Giving USA and Indiana University Lilly Family School of Philanthropy reported that giving in 2019 totaled $517 billion when adjusted for inflation. The United States has seen a $40 billion increase since then when you both adjust for inflation and remove the pandemic variable. While you cannot remove the impact of the pandemic on donor behavior, it is a positive sign that charitable giving has risen by 7.7% over the four year period between 2019 and 2023.
One of my favorite aspects of the Giving USA study is the evaluation of giving vehicles and campaign approaches. Meeting donors where they are is important to help facilitate contributions. This report gives us statistical data to inform fundraising strategies. Building a donor-centered strategy is foundational for current and future success. I write about it often, click to read my latest. In 2023, there was growth in employee matching gift programs at corporations. If this expansion trend continues, it may result in either growth from the corporate giving sector or a shift in how corporations invest charitable dollars. It remains to be seen if corporations will give more overall or if they will simply change their approach to how they invest charitable dollars. Transactional gifts also increased with donors demonstrating a willingness to “round up” at the time of a point of sale purchase. While this trend likely won’t play a role in major gift fundraising, it is a marker of public sentiment and an overall willingness to participate in charitable giving. Building donor loyalty from this group is an important point to consider.
One trend that deserves discussion is the relationship between corporate volunteerism and job engagement. The report cites a survey conducted internally by Salesforce which found that 17% of employees participated in a company-sponsored volunteer activity and 87% of Salesforce volunteered in some way. Of the employees surveyed, 91% felt more engaged with their work, as a function of their volunteering. One important statistic the report omits is the sample size of participants in the Salesforce survey. It seems reasonable to believe the same employees who are willing to fill out the survey may also be the ones most likely to volunteer. The lack of data makes it difficult to evaluate the statistical significance but let’s take the data at face value to continue the discussion.
From my own experience over the past year with corporate donors, I have noticed increased conversations around employee volunteer opportunities. Some of the largest corporations that are giving in my sector are seeking ways for their teams to volunteer nationally. This trend dovetails with my experience in education as well. Alumni who volunteered in some capacity were among the institution’s top donors. This trend further aligns with an impact-based giving approach. Donors are looking for transparency in their giving. Designated giving allows donors choice in how their contributions are allocated and provides specific reporting on areas of interest based on how donors choose to designate their contributions. It makes sense that today’s donors want to invest their time to expand impact as well.
On the surface, Giving USA’s report provides a consistent trend line with modest peaks and valleys that will undoubtedly smooth out when evaluated in aggregate over time. What we can learn from that report is how donor behavior should be influencing our strategies. The report may provide confirmation that your organization or sector’s approach is generally working. For me, the report reveals a guideline for the future.
As nonprofit leaders, we need to continue to make giving tangible. We need to involve donors with our organizations and demonstrate the impact of their support. Building connections is essential. We need to weave together messaging about our needs with opportunities to be involved. It’s not novel, but it’s important. Even if charitable giving continues to rise over time, doing things the same way time and again may not be the right approach for today’s donors. It certainly won’t be the right approach for tomorrow’s donors. The summer is a great time to evaluate your program, consider your approaches for the second half of the year, or the start of a new fiscal year. Are your fundraising strategies aligned with the needs of the future?
