As Americans review the findings of the most recent Giving USA annual report, we hope to provide further context to this data, published by the Giving USA Foundation and researched and written by the Indiana University Lilly Family School of Philanthropy. I recently sat down with David P. King, the Karen Lake Buttrey director of the Lake Institute on Faith & Giving, as well as an associate professor of philanthropic studies at the Indiana University Lilly Family School of Philanthropy.
As a religious historian, his research interests broadly include exploring the practices of 20th and 21st century American and global faith communities as well as more specifically investigating how the religious identity of faith-based nonprofits shapes their motivations, rhetoric and practice.
Given King’s unique expertise on faith and philanthropy, our interview largely focuses on the religious giving data in the Giving USA report. As the nation’s longest running, most comprehensive report on philanthropy, it provides in-depth examination of themes, trends and findings on total charitable giving, giving by sources and giving to major recipient categories – including religion, which comprises the largest percentage of giving in each report that has been released.
The below interview has been edited for length and clarity.
Q: The most recent Giving USA report shows giving declined by 3.4% in 2022, with total giving at an estimated $499.33 billion. When adjusted for inflation, giving declined by 10.5%. What do these findings mean for the overall state of philanthropic giving in America?
King: With rising inflation, drops in the stock market and shrinking disposable income, Americans faced significant headwinds to their charitable giving in 2022. While the decline affected the majority of sources of giving as well as the sectors receiving funding, perhaps most significant has been a continued decline in giving by individuals. As fewer individuals are giving overall, mega-gifts by some of the wealthiest Americans make up higher percentages of overall giving. While I believe Americans’ high levels of giving and volunteering are vital and distinctive aspects of our civil society, we are seeing some significant shifts in the landscape of giving to nonprofit institutions.
It does appear that individuals are giving less or at least perhaps in different ways than we have traditionally tracked, yet I’m still quite positive that Americans are a generous people. It has always been the case that charitable giving has bounded back from each previous decline, and there is also growing attention to the ways that we are generous that have often not been tracked previously.
Q: While overall giving declined, giving in some major categories grew, including giving to religion, which was up 5.2%, though down 2.6% when adjusted for inflation. In all, religious giving represents 27% of total contributions received by charities. Can you highlight the nuance with this number and what we should consider as we think through its implications?
King: While giving to religion decreased slightly after adjusting for inflation, it has remained the largest subsector throughout the history of tracking charitable giving. Keep in mind that giving to religion includes giving to congregations, religious media and missions, but it does not include a number of other religiously motivated or inspired organizations. Even through this narrow definition, it’s clear that giving to religion, particularly congregations, remains foundational to the giving landscape. Even though it is the case that religious affiliation, attendance and membership is shrinking, giving to religion remains strong.
Q: With religion being the largest giving subsector in the report, religious giving is a vital data point for us to track, measure and understand. Why is religious giving so consistently strong in America?
King: Even as religious giving has shrunk as an overall percentage of charitable giving over the last few decades, it remains by far the largest in total donations. We also know that people of faith give more to both religious and secular causes and give more often. For many religious Americans, the traditions and practices passed on through their families and faith communities instill in them habits of giving. While giving is always a free choice, for many religious givers, it also carries deep aspects of a regular faith practice where giving has often first gone to one’s religious community. That may be changing a bit, but it still resonates strongly for many. High religious giving also demonstrates the vital role that congregations and other religious nonprofits play in our local communities and larger civil society.
Q: Though religion remains the strongest category of giving in the report, many philanthropists are interested in innovative ways to further spur religious giving and overall religious engagement in America. Any thoughts on specific funding areas which you see as key levers to sustain generosity in the religion sector?
King: In our work with congregations specifically, we see a lot of interest in reimagining their revenue models. While overwhelmingly reliant on individual contributions, some congregations are rethinking how to sell, rent or use their property in innovative ways. Others are spinning off 501(c)(3)s, social enterprises or even for-profit entities to sustain their work as well. As we are seeing seismic shifts in religious affiliation and practice in America, many religious leaders have realized they too must be open to change. In traditional mission agencies, many are turning to marketplace models or are looking to self-sustaining enterprises that are not reliant solely on annual fundraising. These models also align with a focus on empowering local voices as well as the expertise of the laity and not just religious leaders.
Q: In 2020, 15% of donor-advised fund grant dollars were directed to religion. Do you see DAF related giving impacting religious giving? If so, how?
King: While it is still difficult to track DAF distributions, there is a lot of current and ongoing research that will continue to help us know more. I imagine that a minority of DAF dollars will continue to be directed to religion, but it is an underdeveloped area. Many religious givers utilizing DAFs are savvy donors, and religious leaders need to be aware of how they can make giving through these vehicles an easy option. For those DAF holders who are less savvy, philanthropic advisors, financial planners or community foundations often do not have the knowledge or relationships with religious organizations to suggest them as viable and vital options for a donor’s gifts. Greater knowledge, exposure and relationship building between donors, the advising community and religious leaders would help further unlock the power of DAF giving to religious organizations.
Q: Anything else from the report that you’d like to specifically address?
King: It’s worth noting again that while giving to religion remains the largest subsector of charitable giving (27%), that does not represent the full picture of giving to religious organizations. There are so many education, social services and international affairs nonprofits that count their religious identity and/or activity as essential to their mission. Even while, by some measures, individuals’ religious affiliation, attendance and charitable activity may be shrinking or changing, this is only one thread in a large tapestry. Paying attention to this important area is vital to our overall giving landscape.
If you are interested in learning more about funding faith and community related initiatives, please contact Esther Larson, Program Director at Philanthropy Roundtable.