We are happy to share with you the latest findings from the 2023 Giving USA report published this week and offer our insight on the implications for nonprofits like yours.
Following two years of record generosity, charitable giving in the U.S. dropped for only the fourth time in 40 years. Total giving fell 3.4% in 2022 to $499.3 billion in current dollars, a decline of 10.5% when adjusted for inflation.
Four economic conditions challenged giving, especially by individuals:
- A four-decade-high inflation rate,
- Flat growth in disposable personal income,
- Steep declines in the stock market at year-end when charitable giving is prevalent, and
- An overall 19.4% drop in the S&P 500, prompting high-net-worth households and foundations reliant on investments to take a more cautious approach to giving.
“Drops in the stock market and high inflation caused many households to make tough decisions about their charitable giving for the year,” said Josh Birkholz, Chair of Giving USA Foundation. “But despite uncertain economic times, Americans demonstrated how essential they view the nonprofit sector and its ability to solve big problems—by still giving nearly half a trillion dollars in 2022.”
A deeper look at the sources of giving offers signs of concern as well as opportunity for nonprofits. While corporations and foundations posted positive two-year gains even adjusted for inflation, individual giving to charities has been declining as a share of total giving for years. Individual giving accounted for 64% of total giving, down from 70% five years ago.
- For the second year in a row, mega-gifts by some of the wealthiest Americans represented nearly 5% of individual giving. Six individuals and couples gave $13.96 billion.
- People are still generous, but are opting for other vehicles for philanthropic giving. High-net-worth individuals increasingly use DAFs and family foundations, while younger donors embrace crowdfunding or direct giving.
Measured in current dollars, giving grew in five of the nine categories of nonprofits that receive charitable contributions, although this growth largely did not keep pace with the 8% inflation rate.
As you can see from this report, high inflation can have a significant impact on charitable giving. It can also reduce the value of a gift or grant pledged to your organization but not yet paid. For example, if your organization received a $250,000 pledge to be paid over the next five years, the gift will continue to lose value if inflation remains high. "NGA works closely with all our clients to factor in these unexpected costs before we embark on any major fundraising campaign," assures Jay Grigsby, NGA Principal and CEO.
The Giving USA 2023: The Annual Report on Philanthropy for the Year 2022 is a publication of Giving USA Foundation, researched and written by the Indiana University Lilly Family School of Philanthropy.