by Yasmin Hariri, Strategist
As 2022 comes to a close, troubling economic conditions shaped by a myriad of economic and geopolitical factors are complicating the outlook for end of year giving, with varying predictions as to how they will shape philanthropic giving over the next several months.
Though fewer Americans have given to charity over the last two decades, the amount of money going to charity in the United States continues to grow, exceeding $484 billion in 2021 following the record-setting giving of 2020 amid the global pandemic. Against the backdrop of roughly 1.8 million nonprofit organizations in the United States alone, countless issues competing for investment locally and globally, and evolving methods of donor engagement, capturing donor dollars continues to be a challenge.
While there are gaps in the existing research on philanthropic giving — with few sources that take a wholly representative approach to sampling and data discrepancies due to the rise of direct giving — there are a few key trends to help make sense of the state of giving today and future opportunities as philanthropic organizations look ahead.
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The majority of giving comes from individuals
Of the $484 billion dollars given to charity in 2021, individuals contributed 67%, followed by foundations (19%), bequests (9%), and corporations (4%). This underscores that it is crucial for organizations to invest in understanding who their individual donors are, what motivates their donors to give, and which communities they have yet to reach. With this information comes an opportunity to personalize and humanize donor communications with relevant stories and impact statistics that will inspire donation.
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Religion continues to get the largest share of dollars
In 2021, 27% of charitable giving went toward religion, followed by 14% education, 13% human services, 13% gifts to grantmaking foundations, and 11% public-society benefit. Public-society benefit saw the largest year-over-year growth between 2019-2021 (42.9%), followed by environmental/animal causes (22.8%) and arts/culture/humanities (20.3%). There is opportunity to tap into aligned values to bring active donors to a cause and illustrate the intersectionality of issues they care about and outcomes.
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Donation matching is an effective multiplier
According to a study of $1 billion raised from over 9.4 million donations, campaigns that leveraged donation matching (i.e. with corporate partners) raised 3 to 5 times more than those that do not. Identifying ways to collaborate with values-aligned partners can both increase reach with access to their networks and motivate donors to give more when presented with the promise of a donation match.
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A rise in the reliance on digital tools to serve up giving opportunities
The nature of giving continues to evolve as more donors use digital tools and platforms to determine causes to support or make transactions — such as workplace giving platform Benevity— and turn to alternative forms of philanthropy like crowdfunding and direct cash transfers. According to a 2022 study by Independent Sector, 57% of Gen Z believe that giving directly has more impact than giving to nonprofits. Together, these trends demonstrate the importance of growing an organization’s digital maturity to reach online donors effectively, and externally showcasing the tangible results of dollars donated.
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The giving potential of next generation donors is growing
The largest-ever study on millennials found that they are overwhelmingly interested in causes and social issues relevant to quality of life for everyone and willing to follow through with action. When asked which actions they take to support a cause or social interest, ‘giving’ ranked third just after ‘voting’ and ‘a change in purchasing.’ Next generation donors (including Millennials and Gen Z) are also vehicles of awareness and peer-to-peer sharing — one study found they were 3 times as likely to advocate on an organization’s behalf compared to older donors. While older donors tend to have more disposable income to donate and comprise the majority of high net-worth donors, prioritizing next generation donors is key to ensuring sustained support into the future and building long-term mission amplifiers.
Across generations and community identities, we are witnessing heightened interest to be an active participant in advancing positive social change, equity, and climate justice — through both dollars and action. While there are still missing pieces in the data on the state of giving in the US today, it is crucial for philanthropic organizations to keep an eye on evolving trends and continue to uncover who their active donors are, optimize methods to reach them, and illustrate real-world stories and results to build a loyal and empowered donor community.
