5 Takeaways from the 2021 Giving USA ReportJuly 2022
Philanthropy has significantly evolved over the past two and half years to cope with a transformational pandemic, sprawling international crises, soaring inflation and a mounting cost-of-living crisis. Amid these shifting variables, it can be difficult to unpick how these events have changed donor habits with regard to the size of donations, recipients and other aspects. In 2020, nonprofits and NGOs witnessed enormous shifts in total giving, as well as in the types of causes that were supported. Here are five key takeaways from the Giving USA Report about how these trends in U.S. philanthropy evolved in 2021.
1. Total giving continued to increase, but much more slowly than in 2020*.
Total giving increased by 4.0% in 2021 to $484.85 billion, marking a second consecutive year of growth, but at less than half the explosive growth rate seen in 2020 (9.4%). Donors are still giving above pre-pandemic levels in absolute terms and are giving at roughly the same percentage of GDP (2.1%) as they have over the past decade (c. 2.0%). Since GDP rose by 5.7% in 2021, this represents a substantial increase. The percentage of disposable personal income (after-tax earnings) that was donated remained at 1.8% from 2020, staying within the range it has inhabited for the past decade (c. 1.8-2.0%).
*Figures in this section are noted in current dollars.
2. The economic recovery drove increases* in corporate, individual and foundation giving.
As the economy recovered, the incomes of corporations, foundations and individuals buoyed, which translated to heightened donation figures in 2021. Corporate giving skyrocketed by 23.8% to $21.08 billion, after having fallen 4.9% in 2020. Foundation giving steeply cooled off from a feverish growth rate of 16.1% in 2020 to 3.4% in 2021. Individual donations continued to rise at a slightly lower rate of 4.9% compared to 5.8% in 2020, a brief respite amid a decade-long trend of growth. After a bumper year of 30.5% growth in 2020, bequest giving reversed somewhat with a 7.3% decrease.
In the long view, contributions from individuals continued to make up an ever-decreasing proportion of total giving, while foundation giving continued to contribute a larger relative share. In 2021, individual donations constituted 67% of total donations and during the five-year period from 2017-2021, individual donations made up only 69%, continuing a constant downward trend over these periods since its high of 81% in 1982-1986. Foundation giving made up 19% of total giving in 2021 and from 2017-2021 made up 18% of total giving, marking a tripling of its proportion of total giving from 1982-1986.
*Figures in this section are noted in current dollars.
3. Inflation ate away at many of these gains and further aggravated many losses.
With inflation growing at 6.8% in 2021, the impact of donations from all sources was severely hampered. Accounting for decreased purchasing power, total giving nearly broke even, decreasing only by 0.7%. By way of comparison, inflation in 2020 only decreased the rise of total giving from 9.4% to 8.1%. While most donation sources were only modestly chastened in 2020, gains in many sectors were completely wiped out and/or reversed. Increases in individual giving of 4.9% only had a 0.2% rise in real terms, while foundation increases were reversed from a 3.4% increase to a 1.2% decrease. While bequest giving already tanked significantly, its losses magnified from 7.3% to 11.4%. Corporate giving, however, largely survived the inflationary trend, with growth only falling from 23.8% to 18.3%.
4. Major recipients of donations faced mixed changes to their philanthropic support*.
Recipient categories that received the most donative support had mixed fortunes in 2021, with some areas experiencing large increases, while others lagged behind their 2020 intake or even fell precipitously. On the misfortunate side, support for education withdrew sharply by 7.2% after a 15.0% spike in 2020. Human services organizations witnessed a 2.4% loss in support after an 8.0% increase in 2020. Religious causes nearly broke even; after a small drop of 1.4% in 2020, they experienced a gain of only 0.7% in 2021. On the fortunate side, public-society benefit organizations saw eye-watering increases in both 2020 (14.4%) and 2021 (17.9%), leaving them as the biggest relative winners of the pandemic period thus far.
Looking historically, the proportion of total giving that went to religious causes continued to decline, falling by 3% to 29% in 2017-2021 from the previous 5-year period. Most of these losses translated to gains in public-society benefit donations, which increased their proportion by 2% to 9%. All other categories remained fixed with education at 14% of total giving, human services at 13%, foundations at 12% and health at 9%.
*Figures in this section are noted in inflation-adjusted dollars.
5. Donations to smaller recipients returned to typical holding patterns*.
Organizations with relatively less donation funding that experienced stark changes to their donative support witnessed these trends revert to normal, possibly in response to shifts in the economy, international events and other causes. Support for international affairs work fell by 4.5% (0.0% in real terms) after rocketing by 11.0% in 2020, suggesting mixed conclusions about the effects of the collapse of Afghanistan on donor's habits. Arts and humanities organizations rebounded sharply after significant downturns in 2020 amid shifting priorities and drastically increased need in other sectors. Arts and humanities support rose by 21.8% after a fall of 6.8% in 2020.
*Figures listed in this section are noted in inflation-adjusted dollars unless otherwise noted.
While the immediate causes and effects borne by these shifts in giving habits will take time to fully grapple with, it is evident that giving continues to grow from nearly every source and to nearly every recipient type. However, the inflationary effects of the pandemic, record corporate profits and Russia's war in Ukraine have clearly taken their toll on the purchasing power of these organizations. Nonprofit managers should come to terms with what these changes may spell out for their organizations in the coming months, while planning strategically for further seismic changes in the near future.
Additional Resources and Readings:
U.S. GDP by Year, Compared to Recessions and Events by The Balance
US inflation rate rose to 6.8% in 2021, its highest since 1982 by The Guardian
Check out our coverage of previous Giving USA reports:
4 Takeaways from the Giving USA 2020 Annual Report by Patton McDowell
62: What Should We Learn from the Giving USA Report? (Melissa Brown) by Your Path to Nonprofit Leadership podcast
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