According to the 2023 Giving USA Report, the longest running and most comprehensive report on the sources and uses of charitable giving in America, charitable giving levels reached $499.33 billion in 2022 – a decline of 3.4%.

But that number requires some explanation.

“To place these numbers in context, 2022 did represent a decline given that the pandemic years 2020 and 2021 were record years for giving,” explains Dr. Una Osili, associate dean for research and international programs at Indiana University’s Lilly Family School of Philanthropy.

Osili, one of the lead researchers for the report, outlined this year’s key finding in a webinar presented in July by Lighthouse Counsel and Virtuous. After her presentation, a panel of nonprofit professionals led by Lighthouse Counsel Senior Consultant Susan Hosbach and Virtuous’ Erik Tomalis unpacked the findings and their implications for nonprofits. 

You can view the recorded webcast here.

Lighthouse Counsel and Virtuous both are members of The Giving Institute, which produces the Giving USA Report each year.

Osili explained that this year’s research also looked at big-picture giving trends from the 1950s through to the latest report.

The big headline from this year’s report is that individuals still make up the lion’s share of American philanthropy at 64%. 

“But when we rewind the tape and look back in the 1980s – which was a very interesting time because, as we know, the ‘80s also had quite a bit of economic uncertainty – individual giving was 81 percent, and if we looked further back in the ‘50s and ‘60s, individual giving was even higher at 85 percent and almost 90 percent,” she said.

“So, the big news, what’s changed is that individuals are a smaller slice of the pie, but they still remain the lion’s share of American philanthropy,” Osili said. “The takeaway for everyone joining us today is success relies on developing relationships with individuals.” 

What’s changed since the ‘50s, and the ‘60s and even the ‘70s and ‘80s is the foundation slice of the pie. In the 1980s, a time of high inflation, foundations occupied just 5% of American philanthropy. Today, foundations make up the largestslice they’ve ever had on record at 21% of American philanthropy. 

‘I want to emphasize also that half of the foundation segment is made up of family foundations,” Osili said. “Family foundations are important to note because they tend to be small, tend to be relatively low on the staffing with maybe one staff member and are mostly run by family members. 

“So, in some ways, building relationships with family foundations is very similar to dealing with individuals,” she said. “Charitable bequests now make up 9 percent of all giving; that’s very similar to their share in the 1980s. As we look at the United States population, and the demographic trends that are taking place, we also note that we have an aging demographic – many of our seniors are reaching their peak giving years, and they’re also beginning to plan for legacy gifts.”

The takeaway is that if you add the individual segment, half of the foundation segment and all the bequests, 85 percent of all giving is attributed to individuals, whether living or deceased.

Numbers around corporate giving, Osili said, have remained stable since the ‘80s, but the complexion of corporate giving is changing, with more businesses responding to crises at the community, local and global level.

The shift, she said, started with the pandemic and continues, with a major example being the war in Ukraine and how corporate donors have stepped up to aid the people of that country.

“It’s also worth noting that corporate giving, while it looks very similar between the 1980s and today’s numbers at 5 percent, 6 percent of all giving, is an area of change,” Osili said. “Corporations have become more strategic in their philanthropy. They’re also using new tools and vehicles. We’re seeing many corporations lean into sponsorships and marketing, and some of those dollars fall outside of our traditional corporate philanthropy. With corporate giving, while those numbers look relatively stable, there has been tremendous change over time.”

The 2023 Giving USA report also showed that giving by individuals has grown at about a 5% annualized rate over the last 40 years. But the rate of growth for foundations has been double that at 9.2%. 

“So, one important message is the role that individuals play,” Osili said. “But also understanding that individuals today have several vehicles that they can use. They can certainly give through their own personal pocketbooks or checkbooks; they can give through their foundation dollars. Bequests are an important part of that picture. And then some individuals may work within corporations where corporate dollars especially those matching dollars, become quite significant.”

That leads to the second big picture finding from the report: The map of giving is shifting. Religious congregations are still the largest destination. Human services, while consistently in the lead as far as destination areas, has now reached the second largest recipient category for at 14%. Education, which used to be number two, has fallen slightly because human services received increasing numbers of both large gifts and small gifts during the pandemic era. 

Osili pointed out that two of the subsectors that are studied today – the environment and international affairs – didn’t even exist in the ‘50s and ‘60s.

“The environment as a subsector was so small that it wasn’t characterized until 1987. Similarly, giving to international affairs, which has received a lot of attention with the war in Ukraine and now makes up 6 percent of charitable giving, was not a separate subsector in the ‘50s and ‘60s because Americans did not give on the whole as much as they do today to international causes.”

The pandemic, she said, brought more awareness about human services, about basic needs and about the needs of the most vulnerable in our society – a trend that is supported by the latest data.

Top findings from the 2023 Giving USA Report. (You can hear the details in the recorded webinar here.)

1. Charitable giving levels reached $499.33 billion in 2022 – a decline of 3.4%.
2. The giving landscape is shifting following the pandemic era.
3. Giving trends are closely linked with economic conditions.
4. Economic challenges influenced giving in 2022.
5. Sources of giving had mixed results.
6. Individuals remain the largest segment of giving, but giving by individuals declined following a period of record giving.
7. Giving by corporations showed relative strength.
8. Giving by individuals over the last 40 years has grown at about a 5% annualized rate. But the rate of growth for foundations has been double that at 9.2%. 
9. By far the biggest opportunity remains individual giving, so nonprofits need to look at their data and ensure that they’re building the most inclusive and diverse donor segments they can. 
10. The resilience and innovation developed in the pandemic era will continue to serve nonprofits.

Up next: two posts recapping the panel discussion around the practical implications of the 2023 Giving USA Report findings.