The news on giving was pretty dismal last year. “Giving USA” reported a drop in donations that was among the steepest ever. But things might be looking up. Three new reports offer hope to fundraisers, suggesting that giving is on the rebound and will grow in the next two years.
Researchers at the Lilly Family School of Philanthropy working with the consulting firm CCS Fundraising predict that philanthropy will grow an inflation-adjusted 4.2 percent in 2024 and 3.9 percent in 2025.
The outlook is a stark contrast from the negative news in last year’s backward-looking “Giving USA” report, says Peter Hoskow, principal at CCS. “I think fundraisers should use this as an optimistic tool and gear their plans, their goal setting, and their resourcing outlook according to a promising view that overall philanthropy will increase — and pretty handsomely.”
The report bases its projections on anticipated growth in personal income, above-average growth in the previous years’ S&P 500, and average growth in net worth. Historically, those indicators are strong predictors of giving, says Jon Bergdoll, statistician for the report. He says the report’s projections feel more straightforward after several unpredictable years that included tax changes to charitable giving, the pandemic, and surges in inflation.
“Nice and boring economically is the look right now,” he says, noting that the more normal data makes it “a little easier” to make projections, “versus these wild, once-in-a-generation things.”
Individual giving is expected to increase by 2.6 percent in 2024 and 3.4 percent in 2025, when adjusted for inflation. While the amount individuals give is predicted to rise, the researchers anticipate that it will fall as a share of overall giving. Individual giving is projected to fall to 63.1 percent of overall giving in 2024 and to 62.8 percent in 2025 — down from 64 percent in 2022, the most recent year for which Giving USA has shared data.
Despite the forecast, it’s important to remember that individuals make up the largest share of the giving pie, says Anna Pruitt, project manager for the report.
“Even though we’re seeing this longer-term trend of individual giving not growing quite as quickly as the other sources of giving, it’s still by far the majority,” she says. Estate giving — which the report predicts will account for 8.4 percent of giving in 2024 — comes from individuals, she says, so if you combine that with the specifically labeled individual giving, “it represents more than 70 percent of the giving.”
Giving by foundations is expected to grow by 10.3 percent in 2024 and 5.3 percent in 2025. Hoskow advises nonprofits to evaluate their grant-seeking strategies to make sure they’re being effective during this time when such big growth is expected.
Pruitt and Bergdoll remind nonprofits that these are predictions, and unexpected changes — like a recession or amended tax laws impacting charitable giving — could affect how giving will unfold during the next two years.
More Donors Plan to Give the Same or More in 2024
Donors are slightly more confident about giving to charity this year, according to a new survey from the fundraising consultancy Dunham+Company. More than three-quarters of respondents — 78 percent — said they intend to give the same amount or more to charity in 2024. That’s an 8 percentage-point uptick from the share who said the same last year. In 2022, the share was 76 percent.
“There’s an intent to want to give more,” says Rick Dunham, the company’s chairman. “That’s why I think working hard to keep them engaged, even if they’re giving less, will be very important, especially for future years.”
The online survey, conducted by marketing research firm Campbell Rinker in January, polled 651 U.S. adults who had made charitable gifts of $20 or more in 2023. This is the fourth year Dunham+Company has commissioned such a survey.
Age affected donors’ outlook on giving, the survey found. Millennials were more tightfisted than boomers. This year, 22 percent of millennial donors said they wouldn’t make a donation to charity until the economy recovers. Last year, that share was 17 percent, and in 2022 it was 9 percent. The survey also found a declining share of millennials who said charitable giving would be among the last expenses they cut. Those stalwart millennial donors dropped from 15 percent in 2022 to 11 percent in 2023 and 10 percent in 2024.
Boomers, however, were much more likely to give: Only 11 percent said that they wouldn’t give to charity until the economy recovered — down from 16 percent in 2023.
While some donors feel more upbeat than they did last year, others are still struggling. Twenty-four percent of respondents said that their household’s economic situation was “very to extremely challenging.” It’s a slight improvement over 2023 and 2021, when the figure stood at 26 percent. The survey didn’t ask donors about their household’s economic situation in 2022.
After declining for two straight years, the share of donors who described their household’s economic situation as “not challenging” grew — a positive sign. That share was 39 percent in 2023 and 42 percent in 2024. However, the share of donors who said they weren’t pressed for cash is still smaller than it was in 2021, when 47 percent said so.
As fundraisers craft their appeals, they should keep this reality in mind, Dunham says.
Recently, his firm helped a nonprofit that serves children craft an appeal that explains how the increased cost of child care is straining their budget. Some of the charity’s supporters are likely feeling a similar financial squeeze; Dunham says it’s important for nonprofits to acknowledge that directly. Now is the time to show donors how much your organization values them, he says, because the people who keep giving are standing in for those who stop.
“You’re affirming the fact that donors are struggling, but it’s also very reasonable that the charitable organization is also showing some of that same impact,” Dunham says. “Therefore, the donor support is all that more important.”
Fundraisers should find ways to help donors still feel committed to the mission, even if they’re making smaller gifts right now.
“The North Star of donor development is retention,” Dunham says. “The strategy right now, more than anything, is to keep these donors engaged and retaining them — even if they’re giving less — because if the economy turns and their ability to give more increases, then you’ll want them on board.”
Generosity at Year-End Grew
A new report from GivingTuesday also focused on donors’ likelihood to give money — as well as donate items, give their time as volunteers, or use their voice to advocate for a cause. All these forms of generosity increased during the last three months of the year, the report found.
The data are drawn from GivingPulse, a weekly survey completed by people ages 18 to 85 across the country. The survey asks respondents about the ways they were generous over the previous seven days. These actions include contributing money to registered charities and individuals, volunteering, donating canned goods, or advocating for a cause. The survey tracks trends in how frequently respondents give of their time, talent, and treasure over time. The results are representative of the U.S. population, and the surveys were completed by roughly 100 people each week.
During the last three months of 2023, acts of generosity increased — as they typically do during the giving season. The survey analyzed the behavior of roughly 1,200 people in the last three months of 2023 and has some red flags for fundraisers.
The results identified a reticence to act among respondents who said they were frequently asked to give money or perform acts of service. Just 13 percent said they gave, volunteered, or advocated in response to a solicitation — a slight uptick from the previous quarter, when 10 percent reported being generous in response to an ask.
“Increasing end-of-year conversion rates is an important challenge for the sector to tackle going forward,” the report says.
What’s more, the findings indicate that donors weren’t significantly moved to support new causes at year-end. Among those who gave money, 30 percent said they donated to a group for the first time at the end of 2023. When looking at all respondents, roughly 12 percent said they supported a new group either by donating money or being generous in another way during the last three months of the year.
“We see some missed opportunities for development professionals to experiment with more targeted messages and outreach,” the report says.
During the last three months of 2023, the share of respondents who said they gave to registered charities increased 1.8 percent over the previous three months. The share of respondents who gave to an individual increased 4.2 percent during that time.
At the end of 2023, donors were particularly driven to give or volunteer in support of groups addressing poverty or individuals experiencing it. The share of respondents who said they were generous in support of this cause increased 6 percent at year-end.
