Charitable Giving Declined, Post Covid

From the Associated Press, June 20, 2023:

NEW YORK (AP) — Charitable giving in the United States declined in 2022 — only the fourth time in four decades that donations did not increase year over year — according to the Giving USA report released Tuesday.  Total giving fell 3.4% in 2022 to $499.3 billion in current dollars, a drop of 10.5% when adjusted for inflation. The decline comes at a time when many nonprofits, especially ones providing services to those in need, report an increase in requests for help.

However, Josh Birkholz, chairman of the Giving USA Foundation, which publishes the report and provides data and insights about donation trends, said the results are actually much better than they could have been considering the tough economic climate of late 2022.  “I go back and forth on whether it’s encouraging or discouraging,” Birkholz told The Associated Press in an interview. “There was a 20 to 25% decline in the stock market and an 8% inflation rate, but Americans still gave nearly a half trillion dollars.”

The report is available on the Giving US website for about $70.   But here is a cool interactive from the report:

Although the report is available only for purchase, the IU Lilly Family School of Philanthropy did the hard research and IU’s website has some excerpted insights. Here are some of them:

DIVING DEEPER

Giving in 2022 occurred amid tough economic conditions – especially for giving by individuals.  Challenging economic conditions included:

• A 19.4% drop in the S&P 500 (-25.4% adjusted for inflation), the first double-digit decrease since the Great Recession in 2008, creating economic uncertainty for high-net-worth households and foundations which are likely to be invested in the stock market

• Flat growth in disposable personal income (-0.1% in current dollars or -7.5% adjusted for inflation)

• 40-year-high inflation rate of 8.0%

• The S&P 500 experienced steep declines toward the end of the year, when a large share of charitable giving takes place

“Despite the downturn in financial markets in 2022, there were some bright spots in the economy thanks to a strong labor market and 9 percent growth in GDP,” said Una Osili, Ph.D., Associate Dean for Research and International Programs at the Lilly Family School of Philanthropy. “The economic picture that emerges suggests that many households were stable—we did not see job losses or an increase in unemployment the way we did in the Great Recession. However, households tend to give when they are financially and economically secure – and the inflationary pressures meant that fewer households had extra to give. In addition, donors may not have been as compelled to respond to immediate needs as they had been during the early days of the COVID-19 pandemic or during the Great Recession.”

darryll k. jones