2021’s Surprisingly Strong Giving Followed by Dark Clouds
The annual “Giving USA” report provides the most detailed estimate of charitable giving in the United States — making it a must-read for many fundraisers. The findings in this year’s report were a jolt: The pandemic-born surge in charitable giving was bigger than anyone knew. And it stretched into 2021.
Charitable giving in America last year gave back only a fraction of the remarkable gains it recorded in 2020. This is somewhat of a surprise, my colleagues Emily Haynes and Drew Lindsay report. As 2021 opened, experts and nonprofit leaders had worried that support might fall off significantly as donors gained distance from the previous year’s seismic, giving-inducing events: the Covid-19 crisis and the racial reckoning touched off by the police murder of George Floyd.
But the new “Giving USA” estimates show that total giving remained essentially flat in 2021, dropping just 0.7 percent after adjusting for inflation, to $484.9 billion.
That donors sustained high levels of giving in 2021 is particularly noteworthy because of this new finding: They were more generous during the pandemic’s first year than previously thought. Using new tax data on itemized charitable donations, “Giving USA” revised its estimate of gains in 2020, with total giving that year now recorded at $488.1 billion — an increase of 8.1 percent over 2019 even after adjusting for inflation. That’s the largest jump since 2012 and the fourth largest in the 21st century. Previously, researchers had put the 2020 increase in giving at 3.8 percent.
Altogether, charitable giving grew 7.4 percent from 2019 to 2021, according to “Giving USA,” which is produced by the University of Indiana’s Lilly Family School of Philanthropy. (Inflation-adjusted estimates for the report’s figures are used throughout this article except where noted.)
Changes in Giving, 2019 to 2021
Source: Giving USA 2022
Contributions were fueled by the strong economy that began to take hold in late 2020 and dominated 2021, according to “Giving USA” researchers. Returns on S&P 500 stocks jumped more than 45 percent over those two years, while the country’s gross domestic product grew by more than 5 percent in 2021 when adjusted for inflation.
Inflation and a stock-market retreat, however, dampen the 2021 giving report and the outlook for 2022. Last year’s growth in giving — 4 percent before inflation is factored in — didn’t keep pace with prices that crept upward. Now, with inflation roaring, many nonprofits are facing runaway costs and the threat of recession on the horizon.
Social-service and health organizations “are all kind of in this purgatory, waiting to see what comes next and how we get through,” says Michael Corey, executive director of the Human Service Chamber of Franklin County in Ohio. Many of the chamber’s more than 150 member organizations are seeing record demand, topping pandemic levels, Corey says. At the same time, there’s a sense of donor fatigue and worries that people aren’t paying close attention.
“One of the things keeping our agencies up at night is what happens when the pandemic supports end,” Corey says. “There’s going to be a big cliff.”
Other nonprofits report increasing salaries, high gas prices, supply bottlenecks, and more. “We didn’t have paper, we didn’t have envelopes, and, oh, now we don’t have labels,” Nicole Engdahl, a National Park Foundation executive, says about a planned mailing. “So it was like, Are you kidding me? It was one supply-chain [issue] after another.”
Emily and Drew identified a number of takeaways for nonprofits to mull over. Among them: Events spurred giving in 2021 and into 2022. Many nonprofits are reporting big turnouts and giving at in-person gatherings. Despite lingering Covid-19 concerns, the University of Central Arkansas launched the public phase of a $100 million campaign in April 2021 and found people eager for the kickoff events even though masks and other protocols were still in place.
“Moving forward with the launch gave people energy and enthusiasm to give,” says Maegan Dyson, assistant vice president of development. “They were glad to have events to go to, but they were also excited to be part of the campaign.” Not even a year after it went public, the campaign cleared its goal of 15,000 donors.
To learn more about “Giving USA” findings and what fundraisers are saying about their expectations for 2022, read Emily and Drew’s full story.