The Giving USA Foundation’s annual report provides valuable insights into the state of charitable giving in the United States. Researched and written by the Indiana University Lilly Family School of Philanthropy, the Giving USA 2024 report offers a comprehensive look at the trends, challenges, and opportunities that shaped philanthropy in the past year. Let’s dive into the key findings and shed light on the changing landscape of giving in the U.S.
Giving did not outpace inflation
In 2023, giving from four sources—individuals, foundations, bequests, and corporations—totaled $557.16 billion to charities in the U.S. Though this continues the trend of increasing the total amount of giving in current dollars each year, there are some interesting points to note:
• Giving declined by 2.1% when adjusted for inflation (about $11.95 billion).
• Giving from all four sources increased in current dollars, but giving from individuals, foundations, and corporations decreased when adjusted for inflation.
• Though giving by bequest remained relatively flat when adjusted for inflation, there was a notable decrease in bequests from estates below $1 million, from $11.86 billion in 2022 to $7.70 billion in 2023.
Bounce-back effect from 2022
2022 marked one of only four times giving has trended downward since the first annual Giving USA report. According to the Giving USA 2024 report, changes in overall donations are connected to the year-end values of the Standard & Poor’s 500 Index, with households and companies being more inclined to donate during periods of stock market growth due to increased financial security. In 2022, the S&P 500 declined by 25.4% in inflation-adjusted dollars, accompanying that historic decline in total giving of 10.5%.
In 2023, the S&P 500 increased by 19.3% in inflation-adjusted dollars, yet total giving still declined. Though there is a strong correlation between the market and giving, there can often be a lag period in growth due to the “bounce-back effect,” when giving is recovering from a stark drop in the S&P 500, as seen in 2022. However, positive economic factors bode well for giving going forward:
• The average inflation rate in 2023 was 4.1%, a decrease from the previous year’s high of 8.0%. (Though, it’s important to note that the persistence of inflation in the last few years is creating uncertainty amongst donors.)
• Consumer spending grew 6%.
• Disposable income grew 8.1%.
A look at various subsectors
This is how the major subsectors of U.S. charitable recipients fared in 2023 compared to 2022:
• Foundations: +15.4%
• Public-society benefit: +11.6%
• Education: +11.1%
• Arts, culture, and humanities: +11.0%
• Health: +8.7%
• Environment/animals: +8.2%
• Human services: +5.8%
• Religion: +3.1%
• International affairs: +2.5%
In current dollars, giving grew in all nine subsectors. However, when adjusted for inflation, giving declined for two subsectors—religion and international affairs (by 1.0% and 1.6%, respectively). Religious organizations continued to receive the largest share of charitable dollars in 2023, with 24% of the total giving. However, giving to religion is declining as a share of giving over time. The decline has accelerated within the last five years—in 2018, giving to religion represented 29% of total giving. Though religious values continue to shape giving, many donors are giving beyond just their congregations.
Donor-advised funds continue to grow
In recent years, there has been significant growth in grants from and contributions to donor-advised funds (DAFs). According to the National Philanthropic Trust’s 2023 report, in the fiscal year 2022, charitable gifts to DAFs increased by 9% and total grants from DAFs also grew by 9% to $52.16 billion. This represents a substantial increase in grantmaking from DAFs over the past decade.
For information on the growth of DAFs in 2023, stay tuned for a more in-depth blog post covering the DAF data presented in the Giving USA 2024 report later in the summer.
Adapting to an ever-changing landscape
Your team can draw valuable lessons from the Giving USA 2024 report to refine your organization’s planned giving marketing strategy. As sector performance shows, areas like religion and international affairs are lagging behind inflation, signaling a need for renewed focus and innovative strategies in these sectors. No matter your sector, though, you can further streamline operations and improve donor engagement by embracing new methods, including:
• encouraging donors to explore fast-growing options (like donor-advised funds or cryptocurrency donations)
• integrating online giving vehicles (online giving grew to 10% of total donations, presenting a significant opportunity for organizations to enhance their digital fundraising efforts)
At the core, maintaining trust, fostering engagement, and building strong relationships will remain essential for all nonprofits to thrive and make a lasting impact in 2024 and beyond.
