Charitable giving in the United States remained strong in 2021, as Americans gave an estimated $484.85 billion to U.S. charities, according to Giving USA 2022: The Annual Report on Philanthropy for the Year 2021.
This marks a 4% increase in total charitable giving in 2021, following record-setting numbers in 2020, when Americans responded to the COVID-19 pandemic and economic turmoil by donating $466.23 billion to charity. However, while giving increased in current dollars, it remained flat (-0.7%) after adjusting for inflation. Philanthropy Roundtable celebrates this continued generosity to U.S. charities, which is vital for our free society and improves people’s lives, while recognizing that inflation and market conditions may impact charitable giving in future years.
“The story of charitable giving in 2021 is closely tied to the events of 2020, a historic year that included a global pandemic, economic crisis and recovery, efforts to advance racial justice and an unprecedented philanthropic response,” said Laura MacDonald, chair of Giving USA Foundation and principal and founder of Benefactor Group. “In 2021, Americans continued giving more generously than before the pandemic. However, the growth in giving did not keep pace with inflation, causing challenges for many nonprofits. In 2021, many donors returned to their favored causes, with many of the sectors that struggled in 2020 making a recovery in 2021.”
With gifts by the country’s largest donors, including MacKenzie Scott and Elon Musk, attracting global attention, the report reveals that mega gifts, defined as gifts of $450 million or more, reached a total of nearly $15 billion in 2021 – representing about 5% of all individual giving last year. Though these mega gifts are significant, smaller scale philanthropy by individual Americans of all socioeconomic levels represented a significant 70% of total giving to U.S. charities.
Below are some highlights from the report, published by Giving USA Foundation and researched and written by the Indiana University Lilly Family School of Philanthropy at IUPUI:
- “Giving by individuals totaled an estimated $326.87 billion, rising 4.9% (staying flat at 0.2%, adjusted for inflation).1
- Giving by foundations grew 3.4%, to an estimated $90.88 billion (-1.2%, adjusted for inflation). Giving by foundations, which has grown in 10 of the last 11 years, represented 19% of total giving in 2021, its largest share on record. This year’s giving is the second-highest dollar amount on record when adjusted for inflation.
- Giving to religion grew by 5.4% with an estimated $135.78 billion in contributions (flat at 0.7% adjusted for inflation).”
- Of note: Given the pandemic-related shutdowns and many religious communities unable to worship in person for periods throughout 2021, this increase (flat with inflation) giving pattern is worth noting. With recent reports showing stagnation and/or decline in religious participation across America, religious giving trends will continue to be important datapoints to track year over year as predictions are this giving may potentially be in decline.
- “Giving to human services increased by an estimated 2.2% totaling $65.33 billion (-2.4%, adjusted for inflation).”
- Of note: Though the stock market and GDP grew significantly in 2021, not all sectors in the economy experienced growth. Given employment concerns and ongoing pandemic related issues, this continued investment in human services marks the continued recognition of community needs by the funding community.
- “Giving to arts, culture and humanities is estimated to have increased 27.5% to $23.50 billion (21.8%, adjusted for inflation).”
- Of note: With emergency and crisis needs subsiding as the pandemic waned, rebound for funding to arts, culture and humanities is significant. As the U.S. and the world recover from the trauma and impact of the pandemic, funding for these areas will likely increase in scope and importance.
- “Giving to education is estimated to have declined 2.8% to $70.79 billion (-7.2% adjusted for inflation). Education giving includes contributions to K-12 schools, higher education and libraries.”
- Of note: With increased scrutiny of schools, leadership and curriculum in recent years, this decline in funding to education is important. Contributing factors could include changes in higher education giving with alumni evolving their giving patterns due to donor intent and academic freedom concerns as well as trends such as micro-schooling, homeschooling and other innovations in education which may also have impacted education related funding.
Source: Giving USA Foundation and Indiana University Lilly Family School of Philanthropy at IUPUI
Given the evolution of giving vehicles Americans use to support charity, this year’s report includes a new chapter dedicated to understanding giving patterns of donor-advised funds and their donors. “Giving to public-society benefit organizations has grown in 11 of the last 12 years and is one of the few sectors that grew in both 2020 and 2021,” said Patrick M. Rooney, Ph.D., executive associate dean for academic programs at the Lilly Family School of Philanthropy. “Growth in this subsector aligns with increased support for legal rights and voting nonprofits, but it is most strongly driven by giving to national donor-advised funds (DAFs). Some of America’s wealthiest individuals have announced major gifts to national DAFs, and the growth in the stock market more generally in the past two years has helped to bolster this subsector.”
Nevertheless, inflation and other economic conditions last year exerted pressure on the philanthropic sector. Una Osili, Ph.D., associate dean for research and international programs at the Lilly Family School of Philanthropy said, “While the stock market performed well in 2021, there were some economic factors that may have affected nonprofits’ operations, such as labor shortages, supply chain interruptions and ongoing high demand for services. The growth that we see for most of the subsectors in 2021 is a reminder of the resilience and innovation that help to drive the philanthropic sector.”
Indeed, as concerns about a potential recession continue to rise, we believe economic conditions could affect future charitable giving. Yet we also agree with Dr. Osili’s assertion that “resilience and innovation … help to drive the philanthropic sector.” We look forward to continuing to witness the generous American spirit that helps uplift communities throughout our country and world.
For more information, please visit Giving USA.