U.S. charitable giving reached a record $484.85 billion in 2021, inspired by enduring pandemic-related need, economic growth, and a strong stock market. According to findings in Giving USA 2022: The Annual Report on Philanthropy for the Year 2021 published this week, donors continued to give more to charity than before the pandemic. The increase however did not keep pace with inflation.
Individuals remain the largest source of giving. Combined with bequests, individuals account for 76% of all giving. Individual donors are increasingly interested in smarter, more strategic ways to give back. Today’s fastest-growing charitable giving vehicle is the donor-advised fund. According to the National Philanthropic Trust 2021 DAF report, the number of donor-advised funds grew from 290,111 in 2016 to over a million in 2020. Some of the largest donations made in 2021 from mega-donors such as MacKenzie Scott, Elon Musk and Jack Dorsey, went to donor-advised funds.
Robust economic growth translated to strong performance by institutional sources of philanthropy. Corporations had the largest increase in giving, 23.8% over 2020. This is understandable as businesses reopened and began to recover from the shutdowns early in the pandemic. Foundation giving also grew by 3.4% over 2020.
In 2021, many donors returned to their favored causes. Giving in eight of nine key sectors increased or remained even. Support for arts and culture groups rebounded significantly, and public-benefit organizations, which include civil rights and voting groups as well as donor-advised funds, climbed by 23.5% over 2020. Only education saw a decline.
Nonprofits acknowledge that 2020 and 2021 marked a critical moment in time and there is no going back. In this ever evolving and dynamic philanthropic environment, they must work harder and smarter so they don’t lose ground to rising inflation and they must continue to innovate and adapt, reaching donors in creative ways.
The Giving USA 2022: The Annual Report on Philanthropy for the Year 2020 is a publication of Giving USAFoundation, researched and written by the Indiana University Lilly Family School of Philanthropy.