The annual “Giving USA” report and other tallies of financial donations to charities are widely seen as the best measures of American generosity. But new research suggests that a significant share of Americans donate cash that isn’t counted because it doesn’t go to nonprofits.
Nearly a third of Americans give money to structured community organizations that aren’t registered charities, such as mutual-aid groups or rent-relief funds, according to the research. Also, about a third make cash gifts to individuals, often friends or family, through direct payments, crowdfunding efforts, online fundraisers, or other means.
These findings are from the first in a series of reports by GivingTuesday. The organization behind the annual post-Thanksgiving giving blitz that nets billions in donations for the charitable world is taking a deep look at philanthropy in all its forms.
Data Commons, GivingTuesday’s research arm, aims to measure what experts say is hard to measure yet increasingly important to understand: the vast range of informal and often individual ways that people pursue social good, including mutual-aid groups, GoFundMe-like crowdfunding platforms, meal trains for sick neighbors, and neighborhood rent-relief funds.
Such informal giving is not captured in the annual “Giving USA” tally, which most recently reported $471.4 billion in support to nonprofits in 2020. GivingTuesday’s researchers hope to have estimates soon about just how much charity is missed in such tallies.
‘Supergivers’
This week’s report draws on surveys of 1,000 individuals in each of seven countries. It looks at patterns of charity — both financial and noncash — and reinforces the common view that much of the world practices philanthropy in ways that don’t resemble American-style giving.
In Canada, Britain, and the United States, giving mostly centers on contributions of cash and goods to registered charities, according to the Data Commons surveys.
The other four countries — Brazil, India, Kenya, and Mexico — have less robust formal charity systems, yet still see remarkable expressions of generosity. Eighty-two percent of Kenyans, for instance, are “supergivers” who donate their money, things, and time. Ninety-seven percent of Kenyan respondents reported that they donated cash in the previous year — 37 percentage points higher than the share of Americans who said the same.
The study also found that very small shares of people in any country give by just one means. Only 8 percent of Americans give just money, goods, or time.
Still, “the charitable sector is very focused on one particular type of giving and one particularly transactional relationship with givers,” says Woodrow Rosenbaum, GivingTuesday’s chief data officer. “That’s not how they prefer to be engaged, so we’re leaving a lot of opportunity on the table by not embracing, celebrating, and understanding that better.”
Data Commons is continuing its surveys and plans to report findings regularly. It’s also hosting a webinar on Thursday, April 14, to discuss, among other topics, the history and traditions of giving in communities, mutual-aid groups, and other ways people organize around their giving.
What Excites Donors
Philanthropy experts studying the decline in giving by average Americans argue that more research and attention should focus on giving outside the nonprofit sphere. Philanthropy is ignoring the many other ways that people support the common good, argues Stanford scholar Lucy Bernholz.
Bernholz and her colleagues at the Center on Philanthropy and Civil Society conducted 33 focus groups with low- and middle-income families across the country in 2019 to understand ways in which Americans give. Asked how they try to make the world a better place, only 20 percent cited donating money.
“Participants seldom mentioned tax codes in reference to their giving but instead discussed giving locally, civic engagement, and myriad informal giving acts, including sharing kindness and connecting with others — and they spoke of these acts often and with excitement,” the report noted.
The Generosity Commission, which funded the center’s study, is conducting additional research on mutual-aid groups and other expressions of charity that take place outside nonprofits. Launched in October with $2 million in funding from some of the nation’s largest foundations, the commission said it aims to understand and “tell the full story” of generosity and examine whether the drop in monetary donations reflects in part a shift in how people define and engage in philanthropy.
Research about all forms of giving, not just cash contributions, will help nonprofits gain a better sense of what motivates charitable behavior, Rosenbaum of GivingTuesday says. It also will offer insights into the ways people want to make a better community and world.
“When we only measure one type of giving, we’re leaving out a lot of people,” he says. That raises equity issues for people whose cultures value forms of giving other than cash donations made to a nonprofit. “If we’re not counting how people give, we’re not giving their desire to support community as much agency as other givers.”
The Charities Aid Foundation publishes similar research on generosity that examines financial giving, volunteering, and help offered to strangers. The 2021 edition of its "World Giving Index” found Indonesia was the most generous country in the world: More than eight in 10 Indonesians donated money in 2020, and its volunteer rate was better than three times the global average. Kenya ranked second, while the United States — once a top-5 country in the ranking that has been sliding since 2018 — was 19th.
Unlike GivingTuesday, the Charities Aid Foundation does not study whether giving is made through nonprofits or outside the sphere of registered charities.
Data Teams in 50 Countries
Data Commons was born of efforts to track GivingTuesday contributions to nonprofits. It now collects and analyzes donation data year-round from some 300 sources, including charity-payment processors, giving platforms, and donor-advised funds.
The survey work represents new research. GivingTuesday leaders say they always intended to encourage generosity of all kinds throughout the world, not just cash donations. The organization now has data teams in 47 countries to study and track giving.
