Giving by individuals powered $484.85 billion in giving to charities during 2021, the total growing 4% compared to 2020, but a negative 0.7% when inflation is factored in. Giving dipped as a percentage of gross domestic product (GDP), from 2.2% to 2.1%.
The economic data is from Giving USA 2022, published annually by the Giving USA Foundation with research from the Lilly Family School of Philanthropy at Indiana University.
Individuals made up 67% of all giving ($326.87 billion), followed by foundations at 19% ($90.88 billion), bequests at 9% ($46 billion) and corporations at 4% ($21.08 billion). Donations to religion topped the list at 27%, followed by human services and then grant making foundations both at 13%. The religious giving number is down significantly from years past as a percentage of all giving. For example, it was 33% of all giving in 2000.
And for all of the headlines of billionaires writing checks for millions of dollars, Megagifts made by some of America’s wealthiest donors totaled nearly $15 billion, representing about 5% of all giving by individuals in 2021.
It was a year in which those organizations with leaders who could pivot quickly on program were able to realize additional revenue. Several types of nonprofits that struggled in 2020, such as health and the arts, experienced a recovery in 2021. Conversely, some types of nonprofits that had strong growth in 2020, such as education and human services, did not fare as well in 2021.
Total charitable giving has increased or stayed flat in current dollars every year since 1981, with the exception of three recession years (1987, 2008, and 2009).
In current dollars, total charitable giving increased 9.4% between 2019 and 2020, and increased 4% between 2020 and 2021. The cumulative change in current-dollar total giving between 2019 and 2021 is 13.8%, according to the Giving USA 2022 data.
If there is one word to describe how giving to nonprofits increased by $18.6 billion during the depths of a global pandemic in 2021, that word is “flexible.” Another word choice could be “pivot.” Leaders at nonprofits needed to go to Plans B and Plan C in a hurry, which included going digital for everything from concert performances to health information to religious services.
Organizations that already had a digital presence were able to get to donors and patrons much faster than those where staff had to scramble to get online. The fact that giving increased given building inflation and job losses was heartening to researchers. The previous year had serious flashpoint of social justice and uncertainty.
“Americans responded to the pandemic in 2020 on economic need but also the racial social justice environment,” said Una Osili, Ph.D., professor of philanthropy and economics at Indiana University’s Lilly Family School of Philanthropy. “And some of those same factors persisted in 2021. So, 2021 continued to show that same kind of continued generosity but we had some additional factors that made this a more complex story,” said Osili, who is also the university’s associate dean for Research and International Programs.
In current dollars, total charitable giving increased 9.4% between 2019 and 2020, and increased 4% percent between 2020 and 2021. The cumulative change in current-dollar total giving between 2019 and 2021 is 13.8%, the data shows. Giving by individuals increased 5.8% in current dollars between 2019 and 2020 and 4.9% between 2020 and 2021. The cumulative change in giving by individuals between 2019 and 2021 is 11% percent in current dollars.
Current-dollar grantmaking by independent, community, and operating foundations increased 16.1% between 2019 and 2020. Between 2020 and 2021, foundation giving increased 3.4% in current dollars with the cumulative change in current-dollar giving by foundations between 2019 and 2021 sitting at 20.1%
In current dollars, giving by corporations declined 4.9% between 2019 and 2020, and increased 23.8% between 2020 and 2021. The cumulative change in current-dollar giving by corporations between 2019 and 2021 is 17.8%.
An interesting statistic is that giving by bequests grew 30.5% in current dollars between 2019 and 2020 but declined 7.3% between 2020 and 2021. The cumulative change in current-dollar bequest giving between 2019 and 2021 is 21%. According to statistics from the Centers for Disease Control & Prevention (CDC), there were 3,458,697 deaths in the United States during 2021 compared with 3,383,729 deaths in 2020. The CDC statistics show 460,000 COVID deaths during 2021. Remove COVID deaths from the 2021 count and there still were more deaths during 2021 than 2020, yet the bequest giving dropped. It was still the second largest number all-time at $46.01 billion.
Jon Bergdoll, an applied statistician at the Lilly School, explained that there were more bequests but that in some years very large bequests skew the numbers for the following year. “Bequests are historically a really volatile series, in part because they are more prone than anything to big shifts caused by one or two very large gifts and that’s basically what seemed to have happened,” said Bergdoll. “In 2020, there were some extremely wealthy bequests out there that caused enormous growth.” The 2020 growth in bequests was almost 31%, he said.
“COVID and mortality got people thinking more about bequests,” Osili said. “It’s also true that COVID provided more of an external shock for many Americans to think about their own mortality, which nonprofits have an opportunity to have conversations around much more,” she said.
Kim Goldsmith-N’Diaye, director of development for Doctors Without Borders/Medecins Sans Frontieres, headquartered in New York City, said charitable giving was up 15% in 2021 for the three decades-old humanitarian relief organization when compared to 2020. Revenue this year is outpacing expectations largely due to an international outpouring of support for Ukraine after its invasion by Russia, she said.
“Last year we continued to receive tremendous, generous support from donors. This year we have a huge emergency (the invasion) that has escalated our revenue quite a bit. We also ask donors to give to all relief emergencies in other countries. We are doing quite well above our projections so far,” Goldsmith-N’Diaye said.
The only current fundraising concern, she said, is whether the stock market will stabilize or tumble further since the organization receives gifts of appreciated stock.
COVID captured headlines but so did social and racial justice issues and that led to greater financial attention to public-society benefit organizations, which saw a giving increase of 23.5% between 2020 and 2021 to $55.85 billion. Adjusted for inflation, giving to public-society benefit organizations grew 17.9%.
Giving also soared to arts, culture and humanities. Gifts are estimated to have increased 27.5% between 2020 and 2021 to $23.50 billion. Adjusted for inflation, giving to the arts, culture and humanities subsector increased 21.8%.
Michael Royce, executive director of the New York Foundation for the Arts (NYFA) in Brooklyn, N.Y., said he was heartened by the hefty increase in charitable giving to arts, culture and humanities but is troubled by the shaky economic forecast and believes other issues will take priority over the arts in the near future.
“I believe the number will go down because arts aren’t a priority in this country,” Royce said. “The world is changing.”
Giving to health-related costs grew by an estimated 7.7%, to $40.58 billion, but when adjusted for inflation amounted to a 2.9% increase.
Suzie Upton, Chief Operating Officer for the American Heart Association, said the AHA was dramatically impacted by COVID in the last quarter of fiscal year 2019-2020, which ended June 30, 2020. As thousands of grassroots community events and annual school campaigns to raise awareness and funds to fight heart disease were canceled across the country, the AHA pivoted, making sure donors were kept aware of AHA’s leadership in programs that provide access to care and nutrition.
Curtailed from its live fundraising events, AHA also funded COVID research grants, created programs like “Kick Cabin Fever to the Curb” for families home-schooling their children, and funded a patient registry for hospitals treating patients with COVID.
Field activities and some temporarily-stalled major gift-giving resumed in 2021 and the AHA anticipates ending this fiscal year, which spans July 1, 2021 to June 30, 2022, with a 10% growth in charitable gifts over the last fiscal year, Upton said.
“It is important that we demonstrate impact to donors. We came out of the hole regarding some of the loss and we’re in a positive place,” she said, emphasizing loyalty of donors and grassroots volunteers who helped organize digital walks and fundraising activities to temporarily replace live events.
Woodrow Rosenbaum, chief data officer for GivingTuesday, said the report shows fundraising practices have returned to pre-pandemic patterns and, in an unhealthy way, do not focus enough on garnering dollars from individual, grassroots donors.
“There’s a lot of incentive just to focus on the short-term dollar needs. Our concern is that when you do that at the cost of more broad engagement you’re left with a less resilient sector” said Rosenbaum. I think there’s been a lot of focus on large donor stewardship by organizations at the expense of acquisition and recapture of smaller donors. More dollars from fewer donors is the effect we would expect when we’re optimizing our practice for that outcome.”
But, Rosenbaum added, “We are back to a trend of fewer donors compared to 2020. That year was an outlier and our hope was we would see a capitalization on the opportunities presented by that outlier but that would require change in practice which is challenging for the nonprofit sector right now.”
Gift Transparency
There are many ways donors are transferring gifts to charities, and some might not be easy to trace. For example, MacKenzie Scott has given away more than $12 billion. While she has announced where many of the gifts went, there is no way of being absolutely sure because much of it went through a donor-advised fund or a through a corporate entity, rather than directly giving.
Osili said that researchers count mega giving by adding it on the sources side through individual giving. Bergdoll explained that when it comes to the Scott gifts, “we have a pretty good idea of where the money went and added it to recipients. For 2021, we know a little bit less (than 2020) but we still have some idea of the rough distribution,” he said.
“An ongoing theme in Giving USA, especially in these givers at the mega giving level, is that it’s getting harder and harder to get the information on how they’re making their gifts and through which vehicles, especially through the LLCs (limited liability corporations),” said Anna Pruitt, managing editor of Giving USA. Researchers make sure to not double count gifts made through donor-advised funds, since those are little more than pass-through entities.
“When an individual makes the gift through a donor-advised fund we count that on the sources side as giving by individuals. On uses side, it’s counted into subsector of whatever that donor-advised fund is located in,” said Pruitt.
The challenges with the various methods of giving is benchmarking from one year to the next. “We don’t know what it looked like in prior years. It’s hard to know the impact of the untrackable dollars,” said Mike Geiger, president & CEO of the Association of Fundraising Professionals (AFP). “You have to factor out the MacKenzie Scott-type of giving to get a sense of what real giving is like. There’s going to be a point when we have to adjust for the MacKenzie Scott gifts.”
Both Geiger and Michael Nilsen, AFP’s director of policy and communications, said Scott, her ex-husband Jeff Bezos and other mega-gift donors receive significant media attention for their impactful gifts but the average donor doesn’t occupy that kind of world. The fundraising world, they said, needs to focus on what Geiger called the “democratization of philanthropy.”
“We have to make philanthropy acceptable to everybody. The number of households engaged in philanthropy keeps dropping,” Geiger said.
“Two-thirds (of households) gave in 2000, down to 50 percent a few years ago. That’s a number that really concerns us. I think we’ll see that trend continue, especially with what’s going on with inflation,” said Geiger. “We’re going to see that impact the number of households as well as those who do give. They’ll give less because they’re putting basic staples like food on their tables, leaving less money to give to charity.”
