More Americans closed their wallets and purses last year after a brief streak of unprecedented generosity, but they continue to give at record levels.
Charitable contributions fell in 2022 for the first time since the Great Recession as households adjusted their budgets to record high inflation and Record of stock market lossesaccording to a annual report last week by the Giving USA Foundation and the Lilly Family School of Philanthropy at Indiana University.
Total US charitable giving decreased 3.4% to an estimated $499 billion last year from around $517 billion in 2021. That’s a 10.5% drop when adjusted for the inflation, which fell to 4% in May after peaking at 9% in June 2022, eating into consumer budgets and the value of their charity dollars alike.
The decline follows a record two years during the pandemic, when giving rose from nearly $437 billion in 2019 to more than $486 billion in 2020, a level that, however, was only surpassed by last year and the all-time high of 2021.
Generosity is more resistant than economy.
Josh Birkholz, President of the Giving USA Foundation
As Giving USA Foundation President Josh Birkholz put it, that suggests “generosity is more resilient than the economy.”
After the pandemic-era influx of resources, many nonprofit groups are adjusting to a reality where “the dollars they raise see less purchasing power and don’t go as far to meet the needs of their communities.” said Una Osili, associate dean for research and international programs at the Lilly school and lead researcher on the report.
The recession comes as service-focused charities like food banks face increased demand, with many grocery prices remaining high and the most vulnerable households grappling with recently reduced federal assistance.
“It’s an extraordinary amount of pressure for us,” said Michelle Book, executive director of the Iowa Food Bank, which is distributing more food than ever in its four-decade history.
So far, contributions have kept pace with the group’s growing operating expenses; this year’s budget is double last year’s, Book said. But “in the coming months those lines will be crossed if we continue on the same trajectory, with people pulling back on donations and the need increasing,” he warned.
Giving to human service nonprofits, a category that includes food banks, declined 8% in inflation-adjusted dollars last year, the Giving USA report found. Seven of the nine nonprofit subsectors the researchers studied also posted inflation-adjusted declines, with contributions to educational and public society charities such as the United Way seeing double-digit declines.
Donations to international affairs organizations, by contrast, rose 2.7%, which the researchers largely attributed to a surge in popular support for Ukraine following Russia’s invasion in February 2022.
While last year was only the fourth time in 40 years that Americans gave less than the year before, it followed a period in which many had more disposable income, thanks to rising stock holdings, a historic series of bundles. of federal aid and months of closures. that limited where people could spend.
Widespread appreciation for frontline workers such as nurses and service industry personnel prompted many consumers to donate during the pandemic like never before, the researchers said. Among the range of charitable groups to which people donated, human service, public benefit and educational organizations were among the top performers.
“There was a tremendous need and a strong human drive to give,” Osili said, adding that the media coverage bucked that trend. “When people heard about the rise in food insecurity or housing insecurity, and how they can get involved, many people stepped up their giving.”
During the height of the pandemic, we were lucky to receive a tremendous amount of support from the American public. Unfortunately, the need hasn’t gone away.
Casey Marsh, DIRECTOR OF DEVELOPMENT, Feeding America
The 200 partner food banks in the network operated by Feeding America, the nation’s largest food charity, collectively raised $2.17 billion in 2022, down 14% from the previous year, said Casey Marsh, director of development. However, compared to 2019, last year’s fundraising increased by 85%.
“During the height of the pandemic, we were fortunate to receive a tremendous amount of support from the American public,” Marsh said. “Unfortunately, the need hasn’t gone away. Across the network, we have to buy more food than ever before, so it’s really eating up a lot of the reserves that were built up during this tremendous influx of bounty.»
Giving from individuals fell nearly 14% when adjusted for inflation, part of a broader trend in which deep-pocketed megadonors account for an increasing share of charitable contributions. Just six individuals and couples accounted for 5% of all individual giving in the country in 2022, according to the Giving USA report.
Less than half of Americans were donating to charity as of 2018, up from two-thirds in 2000, Lilly school researchers found. Individuals still account for 64% of total giving, according to the new report, which also tracked giving from foundations, bequests and corporations.
«There’s enough concern, especially when you look at that broader decline of individuals,» Osili said, «and part of that decline is not just economic, but has a lot to do with trust in institutions.»
While individual donations are on the decline, those who donate are contributing larger amounts, a sign of the growing philanthropic influence of wealthy people. At Feeding America, Marsh said individual donations fell 17% last year even though the average value of donations declined only slightly.
“People who were giving small amounts like $50, $100, that’s the segment of donors that we’re seeing declines across the network, not so much the multi-million dollar gifts,” Marsh said, “which makes sense. if we are analyzing the impact of inflation”.
But, he added, «it’s a little concerning for the long-term pipeline of how we catalyze a movement to continue the momentum to end hunger.»