Giving Compass' Take:
- The Giving USA 2022 report showed a decline in charitable giving after two years of record-high philanthropy during the pandemic.
- How do these trends help donors better understand where the need is and how the philanthropic landscape is changing?
- Learn more about declines in charitable giving and economic challenges.
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For those of us who work in the nonprofit space, the Giving USA report that came out this summer was a punch to the gut. The Indiana University Lilly Family School of Philanthropy summed up the findings with this headline: "Total U.S. charitable giving declined in 2022 to $499.33 billion following two years of record generosity."
On its face, I shouldn’t have been surprised given the historically generous response by donors during the crisis years of the pandemic, but it is rare to see a decline in giving year-over-year. In fact, the numbers were sobering:
- Giving was down 10.5% when adjusted for inflation.
- Giving by individuals dropped by 6.4%.
- Giving by corporations dropped by 3.4%.
The reasons for the decline are not surprising. During that time period, economic uncertainty remained high as the stock market dipped and inflation spiked. At the same time that people were taking a hard look at their own household finances, there also could have been a sense of “donor fatigue” after the urgent requests for help during the pandemic.
For charitable organizations focused on meeting need, the decline in donations is a double dose of a difficult reality. First, as need continues to increase, so does the decline in donations, causing nonprofit leaders to stretch dollars further to provide assistance. Second, charities and nonprofits are being hit with the same economic uncertainty and inflation as everyone else. That means it’s more expensive to continue to provide meals, shelter, and utility assistance for the simple reason that everything costs more.
It’s certainly true that need during the pandemic received intense media coverage. At the same time, discretionary income actually increased for some people as a result of government subsidies and funding. From my perspective, those two factors—the extreme public need and the means to help—fueled the public response.
As we enter a new post-pandemic era, we must embrace new opportunities to help those most in need. Organizations that can break through today could be in the best position for the future.
Read the full article about managing charitable giving by Dale Bannon at Forbes.