The most important thing in communication, management guru Peter Drucker once wrote, is to hear what’s not being said. Drucker’s sentiment comes to mind upon reviewing “Giving USA’s” latest report on charitable contributions. What isn’t said in the annual compendium of the prior year’s charitable giving statistics speaks volumes about the present state of philanthropy in America.
Here’s what the report did say: Charitable giving in 2022 retreated from a historic high in 2021, falling by 10.5 percent or $499 billion in inflation-adjusted terms. Every category of donors — individuals, estates, foundations, and corporations — gave less last year. And every class of charitable recipient, except for private foundations and international affairs, received less after adjusting for inflation.
These findings affirm the widely held assumption that 40-year high inflation and a retreating stock market would result in less giving. But that assumption — like the report itself — may be wrong. To better understand giving in America during 2022, let’s consider what the report leaves out.
First, and most significantly, the “Giving USA” researchers fail to understand that Americans aren’t giving less — they’re giving differently and they’re giving more, by necessity. Not only are the ways average Americans give invisible to the philanthropic professional class, by extension so are their circumstances and needs. No wonder these same researchers, in a study released prior to the “Giving USA” report, found “a broad decline of the trust held in nonprofits over time by the public.”
Average Americans — those without a family foundation, donor-advised fund, private bank account, or philanthropic adviser — shouldered the brunt of the 2008 financial crisis and Great Recession. More than 10 million people lost their homes, and $2.4 trillion in retirement savings disintegrated. They fought disproportionally in America’s 20-year wars in Iraq and Afghanistan. And they died at higher rates during the Covid-19 pandemic and suffered relatively higher economic losses.
Today, they carry the bulk of historically high inflation and debt as well as ever-growing wealth, wage, and income erosion and inequality. Record numbers of young adults have moved back home, and nearly 60 million Americans now live in multigenerational households — the highest on record.
Despite their own struggles, these Americans continue to generously give their time and resources, yet this universe of giving in America lives outside of the purview of “Giving USA.”
So do other sources of giving ignored by the “Giving USA” researchers. Specifically, the report fails to include any information on the nonprofit world’s biggest revenue drivers: government grants and contracts and fees for service, which amount to 80 cents of every dollar of nonprofit income in the United States. By disregarding these primary revenue sources, “Giving USA” provides a portrait of less than 20 percent of the field’s total annual revenue and overstates the role private philanthropy plays in supporting America’s nonprofits.
Private Acts of Kindness
Even more egregiously, “Giving USA 2023” misses the boat entirely when it comes to evaluating the state of generosity in this country, disregarding the ways millions of people donate through vehicles such as crowdfunding, mutual-aid networks, and other private acts of kindness.
The report, for example, does not include crowdfunding, except when donations flow through federally recognized nonprofit organizations, which doesn’t often happen. Yet crowdfunding has emerged as an expedient way for average American donors to make financial gifts directly to those in need. By some estimates, more than $17.2 billion is generated annually through crowdfunding.
In 2022, more than 28 million people sent or received donations through the popular crowdfunding platform GoFundMe. Since 2010, $25 billion dollars has been raised through GoFundMe alone. A 2021 study published in the Journal of the American Medical Association, showed that 26 percent of all GoFundMe campaigns since 2010 were created to cover health-related costs.
The report also has nothing to say about the growth or even the existence of mutual-aid groups, whose reemergence during the pandemic may be the most significant recent developments in how people give their time, money, and resources. Even before the pandemic, hundreds of mutual-aid networks emerged across the United States as people banded together to “sew their own safety net,” as the journalist Annie Lowery put it in The Atlantic.
Crowdfunding platforms and mutual-aid networks offer a clear window into the needs of average Americans and their giving priorities, which include medical and dental bills, gas money, auto repair, childcare, tuition, food, clothing, and so on. Yet, the econometricians behind “Giving USA 2023” find little to report about either. To them, “giving is defined by econometric analysis and tabulations of tax data, economic indicators and demographics,” not by how millions of people in this country donate their money.
The Giving USA authors at the Indiana University Lilly Family School of Philanthropy, which oversees the project, acknowledged in a 2019 study entitled “Changes to the Giving Landscape” that “new methods need to be developed to measure giving that is outside the traditional tax return data and surveys about charitable giving.” They note that “private transfers, crowdfunding, and supporting social enterprises are several ways Americans today may be behaving philanthropically while their giving goes unmeasured by traditional methods.”
Nevertheless, a multitude of charitable acts — peer-to-peer giving, rounding up for charity at the grocery store, leaving a career to care for an elderly parent, tipping extra to support a waitress without health insurance, and giving a dollar to a homeless veteran on a street corner — don’t constitute giving to Giving USA econometricians.
Questions for Giving USA
Here are a few questions the “Giving USA 2023” researchers might want to consider: If a person’s charitable contributions decline because they’ve taken in their adult children or aging parents, are they now less generous? Are they giving less or more? Are they making a positive or negative contribution to civil society?
Americans have endured a lot during the past 20 years, and their reward is a system where the top one percent of households now own more assets than the entire middle class. So, they’re looking to each other, taking care of themselves, their families, and their communities, because no one is looking after them.
These Americans, for good reason, are retreating from the professional giving culture analyzed by Giving USA because it doesn’t serve them. It’s not that they don’t understand charitable giving, it’s that the system doesn’t even count them. In the meantime, the philanthropic professional class is adrift on self-serving seas, observing only the tip of iceberg of need in this country and unaware of the drowning masses below.
