Feeding San Diego felt the crush of inflation in multiple ways last year. Donors were uncertain how much they could give, and the price of food and the number of people served went up.
Giving has gotten off to a strong start in 2024, and fundraisers are cautiously optimistic about the second half of the year.
Many nonprofits are coming off two years when inflation wiped out gains in giving. Overall charitable giving dropped 2.1 percent in 2023 after inflation, according to the most recent “Giving USA” report, the key findings of which were released Tuesday.
For years now, nonprofits have been worried about the decline in the number of Americans who give. This year’s “Giving USA” report won’t allay their concerns: Giving by individuals in 2023 dropped 2.4 percent. The share of overall giving that came from individual donors continued to decline, albeit slightly, from 67.4 percent in 2022 to 67.2 percent in 2023. As recently as 2013, individual donors accounted for 73 percent of overall giving.
We're sorry. Something went wrong.
We are unable to fully display the content of this page.
The most likely cause of this is a content blocker on your computer or network.
Please allow access to our site, and then refresh this page.
You may then be asked to log in, create an account if you don't already have one,
or subscribe.
If you continue to experience issues, please contact us at 202-466-1032 or cophelp@philanthropy.com
Giving has gotten off to a strong start in 2024, and fundraisers are cautiously optimistic about the second half of the year.
Many nonprofits are coming off two years when inflation wiped out gains in giving. Overall charitable giving dropped 2.1 percent in 2023 after inflation, according to the most recent “Giving USA” report, the key findings of which were released Tuesday.
For years now, nonprofits have been worried about the decline in the number of Americans who give. This year’s “Giving USA” report won’t allay their concerns: Giving by individuals in 2023 dropped 2.4 percent. The share of overall giving that came from individual donors continued to decline, albeit slightly, from 67.4 percent in 2022 to 67.2 percent in 2023. As recently as 2013, individual donors accounted for 73 percent of overall giving.
In 2023, foundations accounted for 19 percent of overall giving ($103.5 billion), bequests accounted for 8 percent ($42.7 billion), and the remaining 7 percent came from corporations.
While 2023’s drop in giving is discouraging, there are signs that charitable giving may finally be settling into a new normal after several years of being buffeted by unusual events like the pandemic and record inflation.
“The organizations that we’re working with saw a slight decrease” in 2023, says Rick Dunham, founder of Dunham+Company, a fundraising consulting firm. “A lot of it has to do with the economy. Donors pulled back in the past year, primarily because of inflation and personal economic situations.”
The economy was a big factor in giving last year, says Una Osili, associate dean for Research and International Programs at the Indiana University Lilly Family School of Philanthropy, which helps produce “Giving USA.”
“One big takeaway for us is the role of economy,” Osili says. “Giving rises as the economy improves. The economy outperformed expectations. The stock market was also performing at double-digit rates, even adjusted for inflation. However, inflation continued to be a challenge.”
That inflation challenge impacted everyday donors and the causes they support, while a more robust stock market allowed affluent donors to help their causes thrive. At the halfway mark of 2024, researchers and fundraisers say the economy will continue to drive giving, at least in part. One potential roadblock on the horizon: the election and how it may impact donors’ psyches and giving patterns later in the year.
Inflation Is Still an Issue
Nonprofits like Feeding San Diego, which provides meals to the hungry, felt the crush of inflation in multiple ways last year. Donors talked about being uncertain how much they could give at the same time the price of food went up and the number of people using its services swelled.
“When you look at the economy holistically, it might look like things are rosy, but the bottom line is that food is far more expensive than it was four years ago, and wages have not kept up,” says Ali Colbran, the group’s senior director of development. “So there are more families that need help from places like Feeding San Diego today than even during 2020 and 2021.”
Inflation was 8 percent in 2022, which contributed to a precipitous drop in giving that year. (“Giving USA’s” updated estimates now put that decrease at 8.4 percent.) In 2023, inflation was about just 4.1 percent, but it was still enough to wipe out any gains in giving. Using current dollars, giving grew from $547 billion in 2022 to $557 billion, a gain of 1.9 percent that turns into a 2.1 percent loss after taking inflation into account.
Similarly, all causes but one — giving to individuals — saw giving gains in current dollars. But giving to religion dropped 1 percent, to international affairs 1.6 percent, and to individuals 20.5 percent when adjusted for inflation.
The international relief organization Project HOPE says each year in recent memory, including 2023, it has raised money for a humanitarian crisis — including conflicts in Ukraine and the Middle East as well as massive natural disasters such as earthquakes — and it’s been hard to get donors’ attention as more and more bad things happen in the world.
“It really kind of feels like the world is on fire right now,” says Cinira Baldi, chief development and communications officer for the group. “There’s a little bit of people feeling like, ‘There’s so much going on, I don’t know if I can make a difference.’ And unless there is a trigger to give — a social cause that’s hitting the news — I think that we’re going to start to see some changes in the giving landscape.”
Giving to individuals nosedived in 2023. Jon Bergdoll, associate director of data partnerships at the Lilly Family School of Philanthropy, says that number is primarily charitable giving by pharmaceutical companies to individuals. Methods of giving like crowdfunding via GoFundMe or GiveDirect, which people often equate with giving to individuals, are not included in the “Giving USA” data.
As foundation giving has grown as a source of funding, grants have become an important part of many organizations’ fundraising. At the United Way Bay Area, about 50 percent of funding comes from institutional donors like foundations, says Christopher Berini, the group’s chief advancement officer. This type of giving often comes with “a lot of tight restrictions and detailed reporting requirements that can take us away from the work itself,” he says. The organization would like to raise more money from individual donors, who often provide unrestricted funding.
Wealthy Donors Buoy Some Causes
While three causes saw mild decreases, the rest had gains. Human services rose 1.7 percent, environment and animals 3.9 percent, and health 4.4 percent. More significant were gains for arts, culture, and humanities, 6.6 percent; education, 6.7 percent; public-society benefit, 7.2 percent; and gifts to foundations, 10.8 percent.
The report notes that contributions to causes that saw the biggest jumps — public-society benefit organizations and foundations — dropped 15 percent and 21 percent, respectively, from 2021 to 2022.
Some of the causes with the biggest gains are those that have significant support from high net worth donors, Osili adds.
“Many wealthy households had high rates of savings, and their balance sheets were quite strong going into 2023,” she says. “If you put all that together, the sectors that high net worth households tend to give to — education, the arts, public-society benefit — those performed relatively well.”
The bulk of giving from major donors to higher education goes to big institutions, says Kestrel Linder, CEO of GiveCampus. “So mostly the large elite universities, both public and private, are the ones accounting for most of the growth in dollars,” he says. “If you exclude those schools, the trend in both donors and dollars is not a particularly good one.”
Candid annually surveys foundations about their gifts, and while it found a boost in contributions to foundations, it also found a pattern in which foundations saw the boost. “It was the private, independent foundations that were seeing the increases,” says Grace Sato, director of research for Candid. “Community foundations saw fewer contributions coming in in 2023.”
Donor-advised funds are a peculiar area in the “Giving USA” report. Giving to national commercial DAFs, like Fidelity Charitable and Schwab Charitable is counted in the public-benefit society category, which also includes organizations like the United Way and voting-rights groups. Gifts to DAFs at community foundations would fall under giving to foundations.
More people are putting money into DAFs this year, amplifying a trend that began in 2023, says Eileen Heisman, CEO of the National Philanthropic Trust, a charity that also provides donor-advised funds.
“The market’s been up, and when the market’s up, people usually contribute more to donor-advised funds,” Heisman says. She notes that contributions to DAFS at the National Philanthropic Trust are up about 25 percent. Traditionally, she says, donors often wait about a year before deciding to award grants to charities from their fund.
“Grant making a year from now will be up,” she says. “That’s generally how the pattern goes.”
The Barter Theatre in Abingdon, Va., beat its goal of $1.98 million last year by reaching out to donors and having more conversations to understand what they love about the theater and what they want from it, says Jackie Blevins Johnson, director of individual philanthropy at the theater. The organization raised $2.3 million, roughly a million dollars more than the typical annual fundraising goal of $1.3 million.
Blevins Johnson had dinner with small groups of supporters as often as three times a week. “It’s about the conversation and the relationship,” Blevins Johnson says. “We share our Barter Theatre stories. I like to call it friendraising.”
Other fundraising efforts were designed to bring in a mix of donors. The theater held special VIP backstage events for donors where they could hear from the artistic director or fight choreographer, had corporate-match programs, and offered large sponsorship packages — starting at $30,000 — that donors could provide.
Megagifts Not as Significant
Last year’s “Giving USA” report highlighted the role of exceptionally large donations — gifts of $550 million or more — which totaled nearly $14 billion in 2022, or 5 percent of individual giving. In 2023, the influence of outsize gifts lessened, with about $8 billion in megagifts accounting for about 2 percent of individual giving.
“We are down in megagiving from where we were,” Bergdoll says, noting that the giving is still very high. “Last year’s amount would have been a record for any year prior to 2020.”
Wealthy donors gave nearly $300 million more to nonprofits in the first five months of 2024 than they did over the same period last year, according to a Chronicle analysis of contributions of $1 million or more. There were 228 such gifts in the first five months of 2023, totaling roughly $4.8 billion, compared with 218 gifts of over $1 million this year, according to a Chronicle analysis. The 2024 total was $5.2 billion, but it was buoyed by a $1 billion gift made early in the year.
The nonprofit world’s reliance on wealthy donors is a problem, says Woodrow Rosenbaum, chief data officer for GivingTuesday. He says everyday donors will likely continue to fall away unless nonprofits work hard to bring them back into the fold.
“We’ve been saying for quite some time it is vital for the nonprofit sector to engage more broadly if we’re going to reverse that trend and be resilient into the future,” Rosenbaum says. “So what happens next for nonprofits depends a lot on how nonprofits show up.”
What’s Working
So does the “Giving USA “data hint toward what might be happening in 2024? Yes, says Osili, along with economic conditions: Inflation has moderated, but the prices of key things like food and gas are higher. Still, she says, people are feeling “fairly confident” about the economy.
Dunham, the fundraising consultant, has been getting a similar vibe. He says the donors his clients are speaking to this year feel more confident in the economy and are giving more than last year.
“All the numbers are beginning to come up, and we’re seeing that the donor count is actually increasing, the gift count is increasing, and the revenue is beginning to hit what they would expect,” Dunham says. “Now inflation has come down, and wage growth has gone up. So people feel like they have a bit more money to give.”
Some organizations trying to reach more individual donors are setting up giving circles inside their own nonprofits — to help keep donors connected and involved, says Sara Lomelin, CEO of Philanthropy Together, a nonprofit focused on collective fundraising.
“Nonprofits that are starting giving circles are engaging the donor holistically, not just transactionally,” she says. She notes the hallmarks of giving circles are people coming together, talking about priorities and goals, and feeling more invested in the cause and the impact their fundraising can have.
Nonprofits are also embracing recurring giving as a way to engage everyday donors.
World Vision, an international Christian humanitarian organization, recently launched a subscription giving program to bring in more funding that can be used for a variety of purposes.
Jon Warren for World Vision
Long known for child sponsorship, World Vision has started a new recurring-gift program to bring in unrestricted funds.
“What we’re trying to do is move from a one-time giving situation to an ongoing layer of giving towards these infrastructure investments,” says Priscilla Tuan, chief marketing officer. While the organization already does well with people who want to sponsor a child, that money is dedicated to that purpose. The subscription model allows more flexibility and lets funding go where it’s needed, particularly if a crisis arises. While the organization can appeal for funds to respond to a crisis, it’s easier to have money available to provide immediate aid, Tuan says.
Feeding San Diego is having luck with its recurring giving program, which has grown to 1,300 donors, who give a total of about $65,000 each month. Another bright spot is foundations. “Institutional funding, particularly from private foundations, has been quite strong,” Colbran says. “There’s a real recognition from — for lack of a better term — professional philanthropists. They’re really in tune with what the community needs. With corporate giving, it’s been a little bit of a mixed bag.”
The Barter Theatre is about $80,000 ahead of where it was this time last year, and Blevins Johnson is cautiously optimistic. The organization just began a recurring giving program. While only a few people have signed on, Blevins Johnson thinks it could do well if fundraisers can promote it the right way to donors.
It should also be a good year for grant seeking, says Sato at Candid. About a third of the foundations in Candid’s annual survey expect to increase grant making in 2024, and about half expect their grant making will stay at the same levels as 2023.
Uncertainty Ahead
While 2024 is starting off strong, many are concerned about the impact the election might have on donors’ willingness to give closer to year end.
“The other place that may affect charitable giving is the uncertainty around not just the upcoming U.S. elections but globally, all the geopolitical risk that we see,” Osili says. “People give when they feel economically and financially secure. Uncertainty seems to have a dampening effect on giving, the data often shows. When there’s more uncertainty, donors say, ‘Well, I’ll wait before I make that large commitment.’”
Heisman, with the National Philanthropic Trusts, says she’s seen previous elections impact contributions to donor-advised funds.
“October is when things really start to accelerate in giving to DAFs,” Heisman says. “People often wait until after the election to give to their donor-advised funds because donors like to know where they think the tax laws might be. And if they think there’s going to be a change in administration, they might feel either less safe about giving or more safe about giving, depending upon their political leanings.”
Similarly, the timing of the election puts some donor outreach efforts at risk of getting less attention.
“If you’re booting up towards GivingTuesday, which is the last Tuesday of November, it’s only three weeks after the national election,” says Tom Kissane, vice chair at CCS Fundraising. “So the September-October sort of roll up toward GivingTuesday has to be considered because you’re competing with the election.”
Organizations are thinking about what the presidential election might mean for their fundraising: Some think they may need to change their messaging, depending on who wins. Baldi, at Project HOPE, says its development and marketing teams are meeting regularly to talk about how to approach donors, depending on the election results. “There’s some big global issues, and I think they’re relevant either way, whichever candidate wins,” Baldi says. “But I think the key will be to break through the noise if one candidate wins over the other.”
Even in a noisy campaign season, it’s important for nonprofits to stay in touch with donors if they want supporters to return to the fold after the election is over, says Lomelin, with Philanthropy Together.
“Try to keep those donors involved as volunteers, even if they are not going to donate this year,” she says. “Try to get them engaged because they will come back. If people are engaged with your cause and they’re passionate about what you do, they will come back.”
Maria Di Mento and Ben Gose contributed to this article.
