The year 2022 witnessed economic uncertainties, including a 19.4% drop in the S&P 500, the highest inflation rate in four decades, and a slight decline of 0.1% in disposable personal income. These factors naturally raised concerns about the possibility of a decrease in charitable giving for the year. As it turns out, these concerns were valid, with the year’s total giving of $499.33 billion falling short of the record high of $516.65 billion achieved in 2021. However, it is important to consider the context and potential explanations behind this decline, as reported by Giving USA™.
The Impact of Retrospective Data
It is crucial to bear in mind that Giving USA numbers are subject to retrospective revisions. The tally for 2021 was initially reported as $484.85 billion in June 2022, so the current drop may not be as significant as it appears. Additionally, it is worth noting that the remarkable increase in giving during 2021 was likely driven by the extraordinary circumstances of the COVID-19 pandemic. According to our 2021 Donor Insights Report, many donors responded passionately to the events of 2020 and remained committed to supporting the organizations and causes close to their hearts. Some donors even gave in new ways or to different causes. Consequently, it is premature to conclude that the decline in giving signals the beginning of a downtrend following the exceptional levels seen in 2021.
Growing Influence of Foundations
While the overall giving trend experienced a dip, one notable bright spot in this year’s Giving USA data is an increasing contribution of foundations to the total giving landscape. When examining the breakdown of giving sources, individuals continue to dominate with a 64% share of the pie, while foundations have risen to 21%. Bequests and corporations account for 9% and 6%, respectively. This shift highlights the growing significance of foundations as key contributors to charitable causes. Giving USA, however, does not track or report on what percentage of foundation giving comes from family foundations.
Consistency in Mega-Gifts
In 2022, mega-gifts by individuals reached a staggering $14 billion, representing approximately 5% of all individual giving for the second consecutive year. These mega-gifts, defined as donations surpassing 0.1% of total giving in a given year (rounded to the nearest $50 million), demonstrate the continued philanthropic generosity of individuals and their substantial impact on charitable causes.
Frequently Asked Questions
To provide further clarity, here are answers to common queries related to the Giving USA report:
How does the data from Donor Advised Funds (DAFs) get counted?
Gifts originating from DAFs are treated as pass-throughs and are attributed to the original source of the gift to the DAF, which is typically an individual. Contributions to National DAFs are included in the public society benefit category. Grants from DAFs are subtracted from grants to avoid double-counting.
What qualifies as a mega-gift?
A mega-gift is any donation that exceeds 0.1% of total giving in a given year, rounded to the nearest $50 million. In the case of 2022, any gift equal to or greater than $500 million is considered a mega-gift.
How are different causes defined?
Giving USA adopts the National Taxonomy of Exempt Entities codes for categorizing causes. The two causes that closely resemble each other and can cause confusion are Human Services (codes I, J, K, L, M, N, O, P) and Public-Society Benefit (codes R, S, T, U, V, W).
While the Giving USA annual report shows that charitable giving was not at a record-setting level for this past year, charitable giving still remains strong. Development professionals should be aware of the issues and events that have caused this dip, and they also should be mindful that philanthropy—whether from individuals, foundations, or corporations—is based on relationships. Carefully nurtured, strong relationships with donors, whatever their stripe, help to ensure robust philanthropic support now and in the future.
Order the full Giving USA 2023 report here or join the conversation on social media using #GivingUSA2023.
Download the Giving USA 2023 Infographic from Benefactor.
Key findings and numbers from this year’s report were published today June 20th, 2023,
with the full written report to follow in July.