Stelter’s Senior Gift Planning Consultant, Lynn Gaumer, J.D., gives us her analysis of Giving USA’s 2022 numbers.
It was yet another unprecedented year. Some may even describe 2021 as a transitional year. We saw COVID variants, economic and political shifts and social justice efforts. We turned events hybrid and suffered Zoom fatigue. Some businesses are back in person; some may never return to a building.
Yet through all this, giving remained strong. With a boost from a strong stock market and gross domestic product (GDP), the latest report from Giving USA shows that individuals continued their generosity.
Let’s take a deeper dive to see how and where Americans gave in 2021. Plus, with the first half of 2022 behind us (and the stock market and GDP not looking as promising), read on for recommendations on navigating the latter half of 2022.
The Big Picture
The new numbers say that after considering individual donations, corporate donations, bequests and foundation giving, Americans gave $484.85 billion in 2021—a 4% increase in current dollars. When adjusted for inflation, total giving changed by -0.7%, staying relatively flat with 2020.
This equates to more than $1.32 billion per day.
If you combine the individual and bequest numbers, individuals contributed about 76% of all dollars given to charity in 2021. These are key numbers to use when trying to make your case to start or expand your planned giving program.
Who Is Giving?
To get a complete picture of who is giving, we need to look at overall growth through the last couple of years rather than simply compare numbers from 2021 to 2020.
Individuals continue to be the backbone. They gave $326.87 billion and represented 67% of all charitable giving. The cumulative change in giving by individuals between 2019 and 2021 is 11%. A response to the pandemic, economic need, racial and social justice movements along with the extension of the CARES Act, a strong economy, GDP and stock market (the S&P 500 grew by 27%) likely contributed. It is important to note that mega-gifts totaled $15 billion in 2021 (like those from MacKenzie Scott) and represented about 5% of all giving by individuals.
Giving by foundations amounted to 19% of all contributions made in 2021. The cumulative change in giving by foundations between 2019 and 2021 is 20.1%, perhaps due to a robust economic environment.
Over $46 billion was given via bequests, a cumulative change of 21% from 2019 to 2021. This is the most volatile form of giving. The amount tends to fluctuate based on the estates of high-net-worth donors and is less influenced by economic factors. You should continue to promote bequests, as they provide a solid foundation for any planned giving program.
The data shows that corporate giving led the way in 2021 and represented a rebound from 2020 with 23.8% growth. Significant growth in pre-tax profit (37.4%)and GDP (10.1%) aided this area.
Where Are Charitable Dollars Going?
The last two years have been, well, unusual. Giving to human services, for example, was up in 2020 as Americans donated to food banks and other related causes in response to the pandemic. In addition, international affairs and education enjoyed a strong 2020. After reaching those record highs, we saw a return to normal.
Meanwhile, arts and culture organizations, like museums and theaters, shut down in 2020 and these organizations lost significant sources of revenue. With the help of a strong stock market and a return to in-person activities, giving to arts and culture (27.5%) and health (7.5%) rebounded.
If we look at cumulative changes in giving from 2019 to 2021, all nine charitable sectors saw growth. Public-society benefit (42.9%), environment/animals (22.8%) and arts and culture (20.3%) led the way. Not far behind were foundations (16.9%), education (13.2%), international affairs (12.3%) and human services (11.7%). Religion (5.3%) and health (1.5%) experienced a nice rebound in 2021.
Get the Report
To learn more about the sources and uses of charitable donations this past year, read Giving USA’s press release.
You can see the numbers in our infographic below.
A Look Ahead
A strong economic climate helped motivate giving in 2021; the mid-year economic outlook for 2022 is not as promising. A combination of high inflation, gas and food prices, along with a declining GDP and stock market may hinder giving this year.
Historic data from Giving USA shows that during years of economic growth, average giving has increased by 4.7%. During the years marked by economic downturns, average giving decreased by 0.5%.
So, what can you do to help spur giving during the second half of 2022? Here are five recommendations:
- Promote gifts after a donor’s lifetime. Donors who are concerned about the impact of inflation or the stock market on their current budgets and the economic environment may be more open to gifts after their lifetimes like gifts in a will or beneficiary designations. Encourage percentage giving. A fixed sum does not allow for changes in the estate’s value or inflation.
- Encourage gifts from donor advised funds. During rising inflation or economic uncertainty, donors may wish to use funds that have already been set aside. According to the National Philanthropic Trust 2021 DAF Report, there is an estimated $160 billion in donor advised funds.
- Engage your donors online. Online giving now represents about 12% of total giving according to the most recent report from Blackbaud Institute. In addition, hybrid events are here to stay, and a majority of people are on social media. We are seeing double-digit percentage growth in social media usage (between 2018 and 2021 it jumped from 3.2 billion to 4.2 billion). According to Pew Research Group, 7 in 10 U.S. adults use Facebook.
Tip: Make it easy for donors to use their phones, tablets and computers to make donations, recommend a grant from a donor advised fund or, for those 70½ and older, request a qualified charitable distribution from their IRA.
- Retain new donors. Many nonprofits enjoyed an influx of new donors over the last couple of years. Donor retention is key. Find new and creative ways to keep them. (We have a few tips on how you can retain donors.)
- Build trust. A recent survey by Morning Consult and highlighted in the Chronicle of Philanthropy says that 43% of Americans have lost trust in a nonprofit at some point in time. You can build trust several ways.
Where Planned Giving Fits In
These Giving USA 2021 numbers show that planned giving is a critical component of your fundraising efforts. It is vital to stay the course with planned giving outreach in a tough economic climate. If your organization does not have a planned giving program or it’s time to expand or relaunch, use this latest data to garner support from your board of directors.