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 at IUPUI, the 2023 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.
A decline in total charitable giving
In 2022, giving from four sources—individuals, foundations, bequests, and corporations—totaled $499.33 billion to charities in the U.S. There are three interesting points to note, though:
• This impressive number represents a 3.4% decrease from 2021 (10.5% when adjusted for inflation).
• Gifts by foundations, bequests, and corporations increased in 2022.
• While gifts by individuals remained the highest source of charitable giving, it was the only source to decrease. In fact, it decreased to the lowest recorded percentage of giving by individuals at 64% ($319.04 billion).
A shift in economic conditions
Since the first annual Giving USA report, charitable giving has only trended downwards three other times in periods of economic crisis and uncertainty (1987, 2008, and 2009). Last year’s decline is likely due to similarly challenging economic conditions. In 2022, individuals experienced a decrease in disposable income due to:
• A stock market decline of 19.4%
• Inflation that reached 8% (a 40-year high)
• Other contributing factors, including war-induced commodity price increases, the cost-of-living crisis, and the lingering effects of the pandemic
A look at various subsectors
This is how the major subsectors of U.S. charitable recipients fared in 2022 compared to 2021:
• Giving to international affairs: +10.9%
• Giving to Foundations: +10.1%
• Religious Organizations: +5.2%
• Health: +5.1%
• Arts, culture, and humanities: +2.9%
• Giving to individuals: +0.6%
• Human services: -0.6%
• Environmental and animal organizations: -1.6%
• Education: -3.6%
• Public-society benefit organizations: -8.4%
It is worth noting that the landscape of charitable giving is changing. Religious organizations continued to receive the largest share of charitable dollars in 2022, with 27% of the total giving. However, the report highlights significant shifts, such as the increase in international giving (reaching a record high of 6% of total giving in 2022 due to global events such as the war in Ukraine) and human services overtaking education as the second largest recipient of charitable dollars (receiving 14% of total funds).
A communication snapshot
This year’s special report included interesting responses and statistics regarding motivators for giving.
Website content. A charity’s website and content are the most influential factors for all generations except Boomers. If you are interested in making your planned giving website more powerful, click here.
Direct mail. Boomers are still more likely to be motivated by direct mail, which remains popular with all generations—52% of Boomers and Gen Xers, 59% of millennials, and 45% of Gen Zers stated that they are influenced to give by direct mail. In fact, 44% of donors said they wanted to receive at least a monthly letter from the charities they support (up from 40% in 2016). EDS offers several ways to educate and motivate donors using direct mail—click here to read more.
Those who want their direct mail tied to their website will be pleased to know that QR codes have also become more popular, with 10% of donors reporting that they have used them and 27% stating that they are likely to use them in the future.
A changing landscape that requires adaptation
The Giving USA 2023 report reveals a changing landscape of charitable giving and raises questions about the potential impact on philanthropy in 2023. Adapting to these changes by embracing technology, fostering transparency through storytelling, and emphasizing impact-driven initiatives will be key in engaging donors and sustaining charitable efforts amidst economic uncertainties.
