The latest edition of the Giving USA report has arrived. It is widely recognized as one of the most reliable and respected reports on the philanthropic landscape and provides a detailed analysis of giving trends and statistics in the United States across all sectors.
In 2021, charitable giving totaled $484.85 billion, an increase of 18.62 billion (or 4%). However, when adjusted for inflation, this growth looks relatively flat.
We have analyzed the latest data, which reflects the 2021 calendar year. While it goes without saying that the recent years have presented a different landscape, we encourage you to refrain from making rash judgments and instead consider the long history of giving trends in the United States to frame current events and affect how you think about them.
We present our top takeaways from the findings to best enable you to fundraise successfully this year—and beyond.
1. Recognize that, while individuals remain the motivating source of giving, the conduits of giving are increasingly foundations and donor-advised funds.
The proportion of individual giving was below 70% for the fourth year in a row in 2021. 67% of gifts in 2021 were made by individuals. An increasing concentration of wealth means a greater increase in giving by foundations.
According to Giving USA, individuals made mega-gifts totaling $15 billion in 2021, representing about 5% of all gifts by individuals—an unprecedented amount.
Over the last decade, the number of households earning $200,000 or more has more than doubled to 19 million, and their donations now account for 52% of all itemized contributions. In the early 2000s, that number was consistently in the 30% range. In spite of that, itemized giving by low- and moderate-income earners—those earning less than $100,000 a year—has been declining for more than ten years, even before the Tax Cuts and Jobs Act of 2017.
As wealth becomes increasingly concentrated among high-net-worth donors, it is worth monitoring the continued growth of family foundations and, therefore, a continued shift away from the traditional individual middle-class donor profile.
2. You can take comfort in history as we approach a possible recession and experience high levels of inflation.
The trend line of giving over decades has been on an upward trajectory, despite a few dips. In August 2020, following the start of the COVID-19 pandemic, Graham-Pelton researchers found that organizations that remained on course with fundraising exceeded their goals (115 % on average). Now, those organizations that stopped fundraising or campaign planning must play catch-up to other organizations that pressed thoughtfully forward.
Uncertainty—particularly economic uncertainty—does not stop philanthropy. Though philanthropy may shadow market fluctuations, its peaks and valleys are rarely as dramatic. In 2008, the S&P 500 lost 38%, while philanthropy declined by just 7%. This supports our theory that donors give because their philanthropy helps others rather than because they are seeking a financial benefit for themselves.
Other long-term trends have held steady and are reflected in the 2021 results as well. For example, first, giving as a percentage of GDP has not varied by more than .2% (in inflation-adjusted dollars) in 40 years and remains reliably around 2%. Second, Giving USA has found a statistically significant correlation between changes in total giving and changes in the stock market. Third, over the last 40 years, the variability in giving as a percentage of personal disposable income has never exceeded 0.1‒0.2% (in current dollars) from one year to the next and has consistently averaged 2%. In the years 2005 through 2010, which included the most volatile years of the Great Recession, the net change in philanthropic dollars proved to be less than 1.5% (in current dollars).
3. 2021 was a year of rebounds and reversions, and a return to seats.
Three sectors that experienced declines in giving in 2020 rebounded in 2021. Giving to arts, culture, and humanities grew 27.5%, and giving to health grew 7.7%. Giving to religion grew moderately after a slight decline in 2020.
In 2020, giving to arts, culture, and humanities declined, not only as a result of social distancing preventing gatherings and performances, but also because this is a common occurrence during economic downturns. In addition to fundraising dollars, earned income sources were constrained. But there’s good news: the arts sector experienced the biggest year-over-year growth in 2021. We have seen the arts and culture sectors rebound in the past, and we can see them doing so again. Communities are craving this type of connection, and it is here again.
Healthcare also rebounded after a surprising decrease in 2020. And what’s more, it reached its second-highest level of giving ever in current dollars. Donors may be recommitting to the priorities they had prior to COVID.
Religion was also an area that rebounded, growing more than it did in 2020, when it was relatively flat. Although giving to religion constitutes the largest portion of the “giving pie,” that proportion has declined over time. Religion has never experienced significant growth—on average, it grows less than 5% annually and has never increased more than 10% in the last 40 years. While many religious institutions have adopted online engagement in the past two years, this demonstrates the philanthropic impact that occurs when people experience in-person religious experiences.
International affairs, human services, and education did not fare as well after performing extremely well in 2020. Yet, their dip in giving can be attributed to a mean reversion rather than waning support. And keep in mind that two-year growth was strong: 11% or higher for each subsector in current dollars.
International affairs could be considered an “upstart” subsector. When international challenges capture our attention, we tend to see significant growth here. Since our focus turned inward in 2021, it shouldn’t come as a surprise that the percentage of giving was relatively flat. In discussing international crises, some of you may be curious about Russia’s aggression against Ukraine. Remember that that began in early 2022, so we expect to see changes in this sector resulting from that reflected in next year’s report when we look back at 2022.
In 2020, support for human services—such as shelters, soup kitchens, poverty reduction, and at-risk youth services—was record-setting. We’ve seen a pattern of support for human services during crises in the past—for example, during the Great Recession. It was also true at the peak of the pandemic. What does that mean for 2021? Simply put, we experienced a reversion to the mean. After experiencing significant support in 2020, education also experienced a reversion to the mean. Of note, however, is education’s outsize growth in philanthropic market share—it is the second-largest revenue-generating subsector for most of the last 40 years.
Vice President of Marketing & Communications Katie Rozycki also contributed to this article.