The State of Charitable Giving

The State of Charitable Giving

Jun 22, 2020 Madeline Fry Schultz

Philanthropic giving in the U.S. shot upward last year. In fact, it rose to its second highest level ever recorded, with donations from individuals, bequests, foundations, and corporations reaching $449.6 billion. According to the newly released Giving USA numbers, last year saw a 2.4 percent increase in giving after adjustment for inflation, and fell just shy of 2017’s all-time record for donations to charity.

“It’s certainly gratifying to see the individual giving number go up,” says Joanne Florino, vice president of philanthropic services at The Philanthropy Roundtable. However, there is one concerning trend. “The dollars are increasing, but they’re coming from fewer households. Wealthy households are giving a larger portion of that money, and those households typically give to different types of charities than do middle-class and low-income households.”

This could be a problem especially for religious charities. Middle- and lower-income givers are especially generous to religious causes. Donors from higher-income households are more likely to donate to the arts, education, and health care. While religious charities still motivate far more donations than any other sector, giving to religious causes grew just 0.5 percent last year after adjusting for inflation, while giving to education and the arts shot up more than 10 percent. 

One newly founded organization employs the resources of larger churches to help smaller religious congregations. Called Churches Helping Churches, it gathers donations for small, low-income churches hit hard by the coronavirus outbreak. Organizations like this may be even more important in the coming years. 

The most concerning trend in giving, though, is that fewer Americans are donating. Those who give are more generous than ever. But a rising fraction of the population doesn’t give at all. With 73 percent of the public donating in the past year, and 58 percent volunteering, rates of donating and volunteering have hit modern lows, according to Gallup. 

As Philanthropy Roundtable president emeritus Adam Meyerson recently noted in the Chronicle of Philanthropy, “Charitable giving is essential to our character as a people, and it’s essential to our greatness as a country. It’s never been just the province of the rich, but now we’re seeing that it’s becoming more dominated by the rich. That’s a problem for our country.”

The year 2020 will look different for charitable giving, but there won’t necessarily be a drop-off in giving. While the economy plummeted and the coronavirus pandemic wreaked havoc on the U.S. this year, donations appear to have remained relatively stable. The majority of donors plan to maintain or even increase their giving levels this year, according to Fidelity Charitable.

As Beth McCaw, a donor to the YWCA and other causes, says, “The storm is here.” Why wait to support American society at some future time when needs are dire now?  Americans trust private efforts to carry us through crises. They are likely to lean heavily on philanthropy to weather this year’s storms.