Title: Changes to the Giving Landscape
Organization: Indiana University Lilly Family School of Philanthropy
Summary: The share of households that give to charity declined 13 percentage points from 2000 to 2016, according to a new report examining giving before and after the Great Recession.
Most households that gave to charity before the economy tanked continued to donate about the same share of their income during and after the downturn. These households gave, on average, 3.8 percent of their annual income to charity before the recession and 3.7 percent afterward. However, fewer new donors joined that group after the downturn ended in June 2009. What’s more, 20 million households stopped giving to charity from 2000 to 2016.
Lilly’s report is based on its Philanthropy Panel Study, which tracks the charitable giving of a nationally representative group of more than 9,000 families over time.
While it’s heartening that many long-time donors continue to give in a weak economy, fundraisers need to find creative ways to bring more donors into the fold, says Una Osili, associate dean for research and international programs at the Lilly Family School.
For example, Osili says, nonprofits could reach donors in immigrant communities by collaborating with existing informal philanthropic endeavors, such as neighbors who raise money to fund a scholarship for a local student. This kind of informal charitable activity is typically not counted as philanthropy but nevertheless indicates a generosity that fundraisers could tap into.
Income and Age Matter
Post-recession giving behavior varied by income level. Households with incomes of less than $50,000 a year were most likely give less. On average, those families gave 3.2 percent of their income to charity before the recession, but 2.5 percent afterward.
“The recovery was much slower for lower- and middle-income households,” says Osili, which might explain the lower rates of giving.
Age also matters, the study found. As millennials have joined the work force and increased their incomes since the end of the Great Recession, they have not increased the share of income that they donate to charity. Previous generations typically increased giving as their incomes grew.
“Millennials are buying homes later, they’re getting married later,” Osili says. “All of those factors tend to be correlated with charitable giving.” Perhaps millennials will also put off increasing their charitable contributions until they are older, she says.
What’s more, younger donors may not be talking with their elders about giving. A September study of 123 wealth advisers found that few high-net-worth individuals are having conversations with their children about giving . Parents and grandparents could give younger members of their families the chance to choose a cause to support instead of receiving gifts on their birthdays, Osili suggests. While it’s impossible to predict how the next generation will give, she says current efforts to encourage philanthropy may pay off later.
Among the other findings:
- 46.5 percent of households gave to religious congregations in 2000, but that share dropped to 32 percent by 2016.
- The average gift size among all households fell by $180 in inflation-adjusted dollars after the Great Recession, shrinking by 11 percent.
Emily Haynes has covered fundraising on social media, Giving USA’s annual report on giving trends, and how the ALS Association found success with the Ice Bucket Challenge . She recently wrote about wealthy families’ failure to talk with their children about philanthropy . Email Emily or follow her on Twitter .
