Mixed News, Concerning Trends Emerge from Latest “Giving USA” Report
by Geoff Green, CEO, CalNonprofits
The new “Giving USA” report is out, and overall the news is most certainly mixed. According to their data (the best available), total charitable giving in the U.S. reached $557.16 billion in 2023. On the one hand, this is an all-time high in current dollars, up 1.9% from the year prior. On the other hand, after factoring in year-over-year inflation (4.1%), it represents a net decrease in inflation-adjusted dollars for the second consecutive year. When we’re talking about more than a half trillion dollars, even a shift of 1 or 2 percentage points has real consequences. That said, there are signs that giving may be stabilizing after some of the wild swings of the COVID-19 pandemic and inflation.
From where I sit there are two more concerning trends in the data:
The proportion of households that give to charity continues to decrease.
There have been several reports documenting this trend, and it appears to be continuing. Over the past 20 years, the proportion of US households that give to charity has fallen from roughly two- thirds to half, but the total dollars given have generally continued to grow over the same period. This means that fewer, wealthier donors are doing the giving. There are surely multiple factors behind this trend, but growing wealth and income inequality play a significant role. Some of this could be addressed by allowing non-itemizers to take tax deductions for charitable gifts (as was the case in 2020-2021), but without addressing the underlying inequalities, this will be hard to reverse. Fewer givers means fewer people feeling directly connected to the nonprofit sector.
Giving to Donor- Advised Funds continues to grow rapidly.
The total amount dollars pouring into donor-advised funds continues to accelerate, outpacing distributions from DAFs to working charities by 2 to 1. While I believe DAFs can be useful tools (when used well), the big issue here is that gifts to DAFs are counted in the same way as gifts to working charities. However, a dollar given to a DAF does not have the same community impact as a dollar given to a foodbank, shelter, or social justice organization. The way that the Giving USA report treats donations to DAFs is somewhat complicated. Gifts to DAFs that are managed by community foundations are counted as “gifts to foundations” (the largest annual increase over the prior year) and gifts to DAFs that are managed by financial institutions are labeled as “public-society benefit” (the second largest increase over the prior year). In total, this means that an increasing number (billions) of dollars are being donated in a way that allows the donors to immediately receive the maximum tax benefit, while our communities’ nonprofits do not experience those benefits for years to come.
If you’d like to read more analysis of this year’s report – Giving USA 2024: The Annual Report on Philanthropy for the Year 2023 (from The Lilly Family School of Philanthropy at Indiana University) – see:
“Giving Continues Its Decline, Down 2.1% in 2023. Can Fundraisers Turn the Tide in 2024? (Chronicle of Philanthropy)
Giving USA: U.S. charitable giving totaled $557.16 billion in 2023 (Indiana University)
