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U.S. philanthropic donations take $17B nosedive
Written on Jun 30, 2023
Giving to nonprofits in the United States plummeted during 2022, led by the disappearance of individual donors. Giving dropped to an estimated $499.33 billion – down 3.4% in current dollars and 10.5% after adjusting for inflation from a revised total of $516.65 billion in 2021.
Giving also declined as a percentage of the nation’s gross domestic product, to 1.9% from 2.2%.
Inflation, economic uncertainty, individuals returning to previous giving levels after the pandemic surge and the decline in the number of donors are the key culprits in the drop, according to researchers for Giving USA 2023: The Annual Report on Philanthropy for the Year 2022.
Donations by individuals declined significantly as a portion of overall giving, to 64% from 66% during 2021. Individuals provided $319.04 billion in support, a decline of 6.4% in 2022 and 13.4%, when adjusted for inflation. In current dollars that’s $319.04 billion during 2022 versus $340.97 billion in 2021.
Foundation giving was $105.21 billion, up 2.5% but down 5% in inflation-adjusted dollars. It made up 21% of all giving. Bequests hit $45.60 billion, up 2.3% but down 5.3% in inflation-adjusted dollars. It made up 9% of all giving. Corporations gave $29.48 billion, up 3.4% but down 4.2% after adjusting for inflation. It was 6% of all giving.
In current dollars, total charitable giving increased 6.2% between 2020 and 2021 and decreased 3.4% between 2021 and 2022. The cumulative change in current-dollar total giving between 2020 and 2022 was 2.7%, according to the new data.
As usual, giving to religion took the top spot at $143.57 billion (27% of total amount donated), followed by:
Human services – $71.98 billion (14%)
Education – $70.07 billion (13%)
Gifts to grant making foundations – $56.84 billion (11%)
Health – $51.08 billion (10%)
Public-Society Benefits – $46.86 billion (9%)
International Affairs – $33.71 billion (6%)
Arts, Culture & Humanities – $24.67 billion (5%)
Environmental/Animals – $16.10 billion (3%)
Giving To Individuals – $12.98 billion (2%)
Seven of the nine sector-related categories declined when inflation-adjust dollars were calculated. Only international affairs (up 2.7%) and foundations (1.95%) were in positive territory. Unallocated giving was negative $28.54 billion in 2022. This amount is the difference between giving by source and use (who received it) in a particular year. This amount includes the difference between itemized deductions by individuals (and households) carried over from previous years. The tax year in which a gift is claimed by the donor (carried over) and the year when the recipient organization reports revenue (the year in which it is received) might be different.
Public-society benefit got hit hardest. Giving to public-society benefit increased 11.8% in inflation-adjusted dollars between 2020 and 2021. Between 2021 and 2022, inflation-adjusted giving to public-society benefit declined by 15.2%. The cumulative change in giving to public-society benefit between 2020 and 2022 is negative 5.1% in inflation-adjusted dollars.
The total estimate for giving by individuals in 2022 included itemized and non-itemized charitable contributions. Contributions included gifts of cash, securities and property. Mega-giving from six individuals, such as MacKenzie Scott, and couples totaled $13.96 billion during 2022.
According to the most recent data from the National Philanthropic Trust, $72.67 billion was deposited into DAFs and $45.74 billion was granted during 2021. The average DAF account was $183,842.
Americans continued remembering charities in their wills. Giving by bequest has captured between 7% and 9% of total giving during the past 40 years, with high points in the five-year periods beginning in 1993, 1998, 2013 and 2018, the data show. Giving by bequest saw its largest period of growth during the five-year period beginning in 1998, with an increase of 40.7%.
Data shows two-thirds of American households gave. By 2018, that percentage had fallen to less than half of households. A coalition of nonprofits and others are working to reverse this trend by asking Congress to allow all taxpayers who donate to deduct those gifts from their taxes.