Giving USA released its annual data on charitable giving within the United States for 2021, providing valuable insight as to the trajectory of giving in today’s landscape.

Giving USA released its annual data on charitable giving within the United States for 2021, providing valuable insight as to the trajectory of giving in today’s landscape. The findings are significant as much for the clues they provide about where charitable giving may be heading in 2022 and beyond as well as what it meant for 2021.

Giving in 2020 hit an all-time high of $471 billion, driven by the unique and expected impacts of the global COVID-19 pandemic. While initial expectations indicated that giving would plummet in 2020, donors responded in unexpected ways. Generous government programs and a lack of opportunities to spend discretionary funds resulted in individuals increased monetary support of their favorite causes during an extremely challenging time.

The big question on everyone’s mind was – was this a COVID-19 induced bubble, or would giving continue to increase in 2021? In the data we partially got our answer:

  • Giving in 2021 reached a high of $484.85 billion (about $1,500 per person in the US); this number, however, shows no substantial increase when adjusted for inflation. 
  • Giving continues to be driven by three main factors: COVID-19 response, racial and social justice and economic growth.

In 2021, nonprofits were able to exhale a bit as the increase in individual giving was sustained through 2021- meaning that most organizations were lucky enough to avoid a big drop in giving. The data also indicates that COVID-19, racial justice, and economic growth were not a one-year phenomenon, but looking forward, how long will these factors continue to drive giving?

Interestingly, most nonprofit sectors saw at least a 10% increase in giving over the past two years. An exception to this trend is contributions to religious nonprofits, which continue to make up the largest nonprofit sector but have seen their donations decline over five of the past seven years. This is significant because it means the growth in individual giving is diversified and not concentrated in areas such as disaster response or short term COVID-19 support.

This new data demonstrates that individuals (67%) remain the primary source of giving, followed by foundations (19%), bequests (9%) and corporations (4%). These trends have held true for the past several years. As vaccination rates increase, so do in-person events, which continue to be invaluable in  retaining existing as well as engaging new donors. Events can be utilized to strengthen these relationships. Specifically, arts and culture nonprofits can attribute much of their growth in 2021 to the return of in-person events.

Additionally, the prevalence of large donations continues to rise while the number of overall donors decreases. As wealth, and by extension, giving, continues to concentrate there is increased competition for donations. It also means that economic factors, such as inflation, a bear market and recession could significantly impact giving in the next several years.

Addressing the elephant in the room – inflation. It is undeniable that the United States is facing the highest levels of inflation in over 40 years, and it is impacting all aspects of everyday life. While some economists are predicting an economic recession (the stock market has already reached bear territory), it is hard to imagine a world where these trends do not impact giving in 2022. It is important to note that while giving held steady in 2021, it did not increase when adjusted for inflation. With inflation at an all-time high, nonprofits may be in for a challenging year.

Global Impact is here to assist you navigate this ever-evolving landscape and to ensure that your nonprofit is in the optimal position for success. Our robust services offer ideas, tips and resources that make it easy to maximize sources of giving and provide philanthropic insight for your organization. We are here to help!