Giving USA released their 2023 Report which covers charitable giving in the United States in 2022. Don’t worry, the sky isn’t falling, and nonprofits are doing fine.
Let’s not bury the lead. There was almost half a trillion dollars ($499.33 billion) in philanthropic giving in 2022. That is truly amazing!
People gave 64% of the half trillion in 2022. In 2021 it was 67% of $516.75 billion. Giving by generous individuals ($319.04b) continues to be more than foundations and corporations combined. However, the analysis is on the decline in giving by individual donors because this marks the fourth year that giving by individuals is below 70%. This is troubling because it may indicate a decline in smaller donations.
On the positive side there was a 9% increase in bequests, $45.66 billion. These bequests are from the “Great Generation,” who most likely planned decades ago to make this type of donation to their favorite charities. It will be interesting to see what the succeeding generations do.
We also saw an increase in 2021 of giving by private and family foundations and from corporations. Foundations gave 2.5% more ($105.21b) and corporations gave3.4% more ($21.8b)
Here are some of the trends we’ve notice from this report:
There is a shift from income-based giving to wealth-based giving.
Bigger donations from fewer donors.
Giving is from “stored” wealth: foundations and bequests, not household income.
We’ve lost traction in smaller donations.
Bequests, wealth-based giving, are predicted to be larger than individual giving in the next five years.
The nonprofit sectors that saw an increase in giving were religion, foundations, health, international affairs, arts/culture. Religion-based organizations continue to receive two and three times more dollars than any other sector.
The sectors where giving decreased were human services, education, public society, and environment/animals.
Nonprofit organizations need diverse revenue sources. We need support from our neighbors, friends, and families. We need support for high-wealth individuals, as well as companies, corporations, and foundations. It is our job to remind our donors and others that we not only need support from their discretionary income, but also their asset income. And we need to remind them to make that final gift, a bequest in their will. People give when they are asked, we need to remember to ask in more than one way and for more than one thing.
Michelle Crim, CFRE
Dynamic Development Strategies can help. We offer coaching, grant writing, and fundraising services for our nonprofit clients. We specialize in small to mid-size organizations because we understand your challenges. Please contact us for more information.