What is Giving Compass?
We connect donors to learning resources and ways to support community-led solutions. Learn more about us.
Giving Compass' Take:
• Lilly Family School of Philanthropy and Vanguard Charitable examine how the 2008 recession impacted American's giving habits.
• This research reveals disparities in recovery in giving habits from the 2008 recession. How can you help nonprofits you work with prepare for the next recession? How can you organize your own philanthropy to persist through a recession?
• Read about what philanthropy needs to do before the next recession.
This report presents a detailed analysis of shifts in American household giving from the year 2000 to 2016, which includes information about giving behaviors from before (2000-2008) and after (2010-2016) the Great Recession (which occurred from December 2007-June 2009). Understanding changes in how American households are giving can provide useful insights for donors, leaders, and policy makers. This paper addresses the following questions:
- How are patterns of giving changing over time in the U.S.? While the generally accepted narrative of U.S. philanthropy assumes that roughly two-thirds of adults give to charity every year, the participation rate declined considerably between 2000-2016. From 2000 to 2008, the share of U.S. households donating to charity held relatively steady, dropping only from 66.22% to 65.41%. However, 2010 marked a turning point, as the share who gave declined to 61.11% following the Great Recession. The overall giving incidence was only 53.09% in 2016, the most recent year of data available. This represents a significant decrease of about 20 million donor households since 2000.
- What percent of their income do Americans give to charity? American households make numerous decisions about how to spend their incomes, with the largest percentage spent on housing, transportation, and food related expenses each year. Despite the effects of the Great Recession, we do not see significant shifts in the share of income spent in each category, including charitable giving.
- How do economic and socio-demographic factors help explain the changing patterns of American giving from 2000-2016? Economic shocks and periods of instability have been shown to differentially impact individuals and households based on various socio-demographic characteristics like age, gender, and race (Osili et al., 2019). Households more strongly affected by the recent Great Recession experienced a slower recovery since it ended, and have, predictably, experienced larger declines in their charitable giving compared to households less affected by the Recession. While the choice to donate is influenced by several socio-economic and demographic factors, some key elements such as household income, wealth, educational attainment, marriage, and religious affiliation and attendance, have been found to be associated with an increased likelihood of donating to charity (Rooney, Brown, and Wu, 2008).
We begin with an examination of key factors that are currently affecting philanthropy in America (i.e., the economy and sociodemographic characteristics). Then we explore recent trends in U.S. household charitable giving (incidences and amounts) from 2000-2016. After providing this background information to set the context for the state of charitable giving in the U.S., the report provides a deeper dive into how the Great Recession affected the percent of income given to charity by various sociodemographic groups. In this section, we present the results of our analyses exploring how socio-economic and demographic factors help explain changing patterns of American giving. We begin by offering a table for the reader that provides all results from our analyses. Then we discuss results found to be statistically significant in the text immediately following the results table. Finally, the report culminates with a discussion of implications for the future.
At a time when needs continue to multiply, the importance of thinking anew about how to deepen and expand our relationships with past and future donors becomes more critical. To meet the complex challenges of such factors as changing tax laws, shifting demographics, and economic downturns, to name a few, we need to develop strategies for 21st century philanthropy. This report will supply the newest data and analysis toward this joint effort.
Despite the effects of the Great Recession, we do not see significant shifts in the share of income spent in each category, including charitable giving.