US charity Donations fell 2.1% to $557 billion in 2023however the flow of cash began to stabilize after several years of volatility.
The annual report of the Donations to the USA Foundationproduced in collaboration with the Lilly Family School of Philanthropy at Indiana Universityfound a decline in donations adjusted for inflation. In nominal terms, i.e. without this adjustment, donations increased by $10 billion in 2023.
Total giving has fluctuated greater than usual lately, with the primary spike reflecting donors' response to the COVID-19 pandemic and the racial justice movement.
The Development of the stock markets also played a task. Stocks fell sharply in 2022 after a robust three-year serieswhich peaked in 2021.
In 2023, conditions were more stable: Stocks performed well. Unemployment rate remained lowAnd the economy grew despite Fear of a recessionAlthough inflation remained higher than the historical norm, Interest rates fell below the highs reached in 2022.
Moreover, Americans failed to answer the weird events which have shaped philanthropy over the past 4 years.
As two of the Lead article of the report Researcherswe see on this recent data signs of strength somewhat than weakness in giving. Giving from all sources – individuals, foundations, legacies and firms – remained above 2019 levels.
Foundations play an even bigger role
Foundation grants fell from $106 billion last yr to $104 billion in 2023. Yet for the second yr in a row, nearly one in five dollars given to charities got here from a foundation. In contrast, 40 years ago, about one in twenty dollars given to charities got here from foundations.
Until the collapse in 2023, foundation giving had increased for 12 years in a row. A key reason for this regular growth is the best way foundations donate: Most foundations donate 5% of their total assets the minimum amount required by law annually. The remainder of their assets remain invested and are likely to grow over time. And as the worth of the inspiration's assets increases, so does the quantity they donate.
The willingness of foundations to donate is more likely to proceed to extend in the approaching years, as major donors, including wealthy philanthropists, Bill Gates, Mike Bloomberg And Warren Buffetdonated more to their foundations.
In the 4 years through 2023, giving to foundations was higher than at any time since Giving USA began collecting such data in 1978.
Giving from individuals, by far the most important source of charitable giving, tends to be more attentive to the economic conditions of a given yr than giving from foundations, and has subsequently been more uneven lately. Giving from individuals remained relatively flat in 2023, declining 2.4% to $374 billion, in comparison with $384 billion the previous yr.
Start of stabilization in 2023
Churches and other religious causes have historically received the most important share of giving, and that was true in 2023. However, religious giving fell 1% to $146 billion in 2023 and has declined in 4 of the last six years.
Social service organizations, also often called human services nonprofits, meet basic needs akin to hunger and homelessness. Historically, donations to those charities have increased during economic downturns, followed by several years of slower growth.
Over the last 4 years, nevertheless, a distinct pattern has emerged.
Donations to social service organizations surged in 2020, as expected, as many individuals sought to support low-income and otherwise vulnerable people by donating to food banks, domestic violence organizations, and homeless shelters. These varieties of donations then continued to rise in 2021.
After a slight decline in 2022, donations on this area increased again in 2023.
Giving to social services has grown a lot that it was the second-largest category of charitable giving behind religion for the second yr in a row in 2023. Until 2020, education-related giving, akin to giving to high schools and universities, was typically the subsequent largest category after religion.
The latest Giving USA report shows what American philanthropy looks like in a yr that was relatively uneventful in comparison with previous years: 2023 was the primary yr since 2017 wherein neither unusual events nor laws led to major changes in giving.
We will proceed to watch these trends to raised understand what's next for American philanthropy.
image credit : theconversation.com