Stelter’s Senior Gift Planning Consultant, Lynn M. Gaumer, J.D., is in with her analysis of Giving USA’s 2023 numbers.
Despite a rocky economy, Americans still love to give. That’s the gist of the latest report from Giving USA about the nation’s generosity in 2022.
Did last year’s giving reach the same record highs we saw in 2020 and 2021? No. But donors still overcame stock market volatility, an inflation spike and other economic concerns to give almost $500 billion. “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,” said Josh Birkholtz, Chair of Giving USA Foundation.
That’s impressive. In 2020 and 2021, the pandemic, economic crisis and racial justice issues combined to galvanize givers, leading to the two best years on record for charitable giving. In 2021, giving surpassed $500 billion for the first time. Americans showed yet again that when there’s a crisis, they rise to the occasion.
Let’s take a deeper dive into how and where Americans gave in 2022. Then, as we approach the halfway point of 2023 (with the stock market looking more promising than it did a year ago), read our recommendations for navigating the latter half of this year.
The Big Picture
The new numbers say that after considering individual donations, corporate donations, bequests and foundation giving, Americans gave $499.33 billion in 2022—a 3.4% decline (and 10.5% when adjusted for inflation) in current dollars.
But still, this equates to more than $1.37 billion per day.
If you combine the individual and bequest numbers, individuals contributed about 73% of all dollars given to charity in 2022. These are key numbers to use when trying to make your case to start or expand your planned giving program.
Who Is Giving?
Individuals continue to be the backbone. They gave $319.04 billion in 2022 and represented 64% of all charitable giving. This 6.4% decline (13.4% adjusted for inflation) following two robust years of giving is attributed to a decline in the stock market and economic uncertainty. The S&P 500 declined 19.4% (25.4% adjusted for inflation), disposable personal income remained relatively flat and declined by 0.1% (7.5% adjusted for inflation) and inflation reached 8.0%, a 40-year high. Interestingly, mega-gifts by individuals—defined last year by Giving USA as gifts of $450 million or more—totaled $14 billion in 2022 and represented about 5% of all giving by individuals.
Giving by foundations is growing, amounting to $105.21 billion—21% of all contributions made in 2022. That’s a 2.5% increase over last year (though a 5.0% decline when adjusted for inflation). In fact, one dollar of every five given to charity was from foundations. Over the last 40 years, giving by foundations has grown by 9.2%.
More than $45 billion was given via gifts in a will or trust, an increase of 2.3% from 2021 (but a 5.3% decline when adjusted for inflation). Bequests are the most volatile form of giving. The yearly total 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 increased 3.4% from 2021 (but declined 4.2% when adjusted for inflation) and represented just over $21 billion. This is due, in part, to the gross domestic product (GDP) increasing 9.2% (1.1% adjusted for inflation) and pre-tax profits increasing 6.6%.
Where Are Charitable Dollars Going?
Giving to international affairs led the way in 2022, growing by 10.9% in response to world events such as the war in Ukraine. (When adjusted by inflation, it increased by 2.7%.) Giving to foundations also saw double-digit growth (10.1%, or 1.9% when adjusted for inflation). Both these subsectors reached the highest giving level on record when adjusted for inflation.
Other sectors that saw growth in current dollars were religion (5.2%), health (5.1%) and arts, culture and humanities (2.9%). However, it was not enough to outpace inflation.
Meanwhile, several subsectors struggled in 2022 after reaching record highs during the pandemic. This includes public/society benefit (-8.4%), education (-3.6%) environment/animals (-1.6%) and human services (-0.6%).
Get the Report
Take a closer look at who gave and where the dollars went in our infographic. (Download image.)
A Look Ahead + 5 Recommendations to Spur Giving
Economic uncertainty tapered giving in 2022, but the mid-year economic outlook for 2023 is more promising. On June 20, 2022, the Dow Jones Industrial Average closed at 29,888. One year later, it closed at 34,299. Inflation slowed in May to the lowest rate in two years. And prices fell 0.3%, the fourth drop in six months.
This is all good news for giving. What can you do to keep up the momentum and spur donations during the second half of 2023? Here are five recommendations:
1. Promote gifts after a donor’s lifetime.
Donors who remained concerned about the impact of inflation or the stock market on their current budgets may be more open to gifts after their lifetimes, such as gifts in a will or beneficiary designations. Encourage percentage giving. A fixed sum does not allow for changes in the estate’s value or for inflation.
2. Encourage gifts from donor advised funds.
DAFs remain a very strong gift vehicle. During periods of economic uncertainty, donors may wish to use funds that have already been set aside. According to the National Philanthropic Trust 2022 DAF Report, there is an estimated $234 billion in donor advised funds. If you are not promoting DAFs, you are missing out on a large segment of donors.
3. Engage your donors online.
According to M+R Benchmarks Report 2023, mobile devices are now responsible for a majority of visits to nonprofit websites. And according to Giving USA Special Report: Giving by Generations, 2022, more than 75% of Gen Z and Millennial donors reported giving to charities online.
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.
4. Retain new donors.
Many nonprofits enjoyed an influx of new donors over the last couple of years. But how can they keep them? Creative engagement is key. (We have a few tips.)
5. Build trust.
Where Planned Giving Fits In
These Giving USA 2023 numbers show that planned giving remains a critical component of your fundraising efforts. Your organization’s success depends in part on staying the course with planned giving outreach. If your nonprofit 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.