Once again, the charitable sector in the United States is looking healthy. That was the big-picture message to come out of Giving USA 2022: The Annual Report on Philanthropy for the Year 2021.
In a briefing on the report hosted this summer by Lighthouse Counsel, Dr. Anna Pruitt, a Giving USA lead researcher, talked about the most recent report, which was released in June.
The top finding was that overall charitable giving in the United States totaled $484.8 billion in 2021 – a 4 percent increase over 2020 in real dollars. Adjusted for inflation, total giving remained just about flat from 2020.
But that’s good news, Pruitt said, because 2020 saw record levels of giving in response to the COVID-19 pandemic and the racial justice movement, as well as the recession that happened that year.
“So, staying close to those 2020 levels is truly impressive,” she said. “The other important thing to remember here is that we are still well above pre-pandemic giving levels.”
Where those donations came from
According to the report, giving by individuals comprised 67% of total giving in 2021 at $326.87 billion. Following that, that largest share was given by foundations.
“It’s important to remember that this includes grants made by private foundations, community foundations and operating foundations,” Pruitt said. “And that total amounted to 19% of all gifts made in 2021 for a total of $90.88 billion.”
The next largest share came from bequest giving, accounting for 9% of all gifts made in 2021 for a total of more than $46 billion.
The smallest share of total giving came from corporations, at about 4% of the total.
“And again,” Pruitt said, “even the smallest share is over $21 billion.”
Where the money went
The nine major types of giving according to recipient organizations were religion at 27% percent and over $135 billion; education; human services organizations; grant-making foundations; and public society benefit organizations.
“Public society benefit deserves a little bit more explanation,” Pruitt said. “People don’t usually know what it means right away. It includes a lot of pass-through organizations like the United Way, Jewish Federation and community development organizations. It also includes civil rights and legal aid organizations.
“So, for instance, the NAACP Legal Defense Fund is located here, as well as many independent research organizations,” she said. “And then finally, of course, national donor-advised funds are also housed here in public society benefit. So, it’s really a bit of a catch all.”
The sixth largest subsector was health, followed by international affairs, arts, culture and humanities. And finally, environment and animals, which was the smallest subsector and received 3% of the total.
“And it still represents $16.32 billion,” Pruitt said.
Other key findings include
“In 2021, we know that there were all kinds of new challenges, like the increasing inflation rate, and all kinds of events that happened during that year, including staffing challenges, the great resignation that impacted nonprofits all over the place, supply issues and elevated levels of demand,” Pruitt said.
She added that she recently heard from the leader of a food bank who said the levels of demand it experienced in 2021 actually exceeded what they were at the height of the pandemic and 2020.
“So, we know that the need is continuing,” Pruitt said. “We also know that there are lots of new ways of giving that are increasingly popular. So, donors want to leverage all of their assets. And they might want to do that in lots of different ways, including giving through donor-advised funds.
Pruitt stressed that the new Giving USA report contains a new chapter on giving by and to donor-advised funds.
“I highly recommend that you check that out,” she said. “There is unique research in that chapter that gives a very full picture of what we’re seeing across the field. And it presents some really interesting information about where grants from donor-advised funds are going. That’s not an information you can get anywhere else.”
Looking ahead, Pruitt said, in order to hold giving steady or, ideally, increase it in 2022 and beyond, nonprofits must continue to invest in technology to expand options for the way people give; they must remain resilient in facing ongoing challenges; and they must remain flexible.
Genuine commitment to increasing diversity, equity and inclusion within organizations will become increasingly important, as well, she said.
Finally, organizations will be wise to keep open the lines of communications with donors because while data is important, communication is even more so.
“Something that’s really important to remember when you’re looking at all of this data is that I would hope you would be data informed and not data driven. You actually have to put the meaning into the data yourself,” she said.
Pruitt used high inflation rates and their effect on giving as an example. Higher inflation rates make people feel uncertain, and uncertainty isn’t good for charitable giving, she said. But, she added, in some years with high inflation rates giving actually goes up.
“What we typically find is that if we see periods of high inflation for a longer period of time, that can have a longer impact on charitable giving,” she said. “But it really has to do with how individuals are feeling about these different factors in the environment and in the economic environment.
“So, as always,” she concluded, “It’s really important to be speaking with your donors and listening to them and hearing what they’re most concerned with.”
To view the video of this special briefing, sponsored by Lighthouse Counsel in the spirit of philanthropy, go to https://youtu.be/VFKIhbuCWzI
Lighthouse Counsel is a proud member of The Giving Institute, which publishes Giving USA. To learn more about The Giving Institute and get a copy of the 2022 Giving USA report, go to https://www.givinginstitute.org/page/GivingUSA
Coming up: Look for a Lighthouse Counsel blog post on the panel discussion that took place after Pruitt shared the Giving USA 2022 report findings.