Charitable giving was down sharply in the U.S. in 2022 and, for the first time this century, less than half of Americans made donations, according to the annual Giving USA report released Tuesday. The 3.4% decline — 10.5% when adjusted for inflation — marked just the fourth time in four decades that year-over-year donations fell.
The yearly survey of charitable giving, jointly produced by researchers at Indiana University’s Lilly Family School of Philanthropy and the McLean, Virginia-based Giving USA Foundation, said the drop in donations, from $516.65 billion in 2021 to $499.3 billion a year later, came at a time when many nonprofits were reporting increased calls for help.
Una Osili, associate dean for research and international programs at the Lilly School, said giving in 2022 “did not keep pace” with inflation.
Ms. Osili said charities “are going to have to navigate a more turbulent landscape” in the future, but also better connect with individuals, since “half of foundations are family foundations, roughly speaking.”
Josh Birkholz, chairman of the Giving USA Foundation, told the Associated Press the numbers are better than they could have been, considering the economy.
“I go back and forth on whether it’s encouraging or discouraging,” he told AP. “There was a 20 to 25% decline in the stock market and an 8% inflation rate, but Americans still gave nearly a half trillion dollars.”
Researchers cited a 19.4% decline in the S&P 500 index, flat disposable personal income growth and high inflation as factors in the 2022 drop. They said some of the S&P losses came toward the end of 2022, a time when “a large share” of charitable giving happens.
The drop in 2022 donations follows two record-setting years for charitable giving, driven by the unprecedented needs of the COVID-19 pandemic, Ms. Osili said.
“At the beginning of the 21st century, two-thirds of Americans gave,” she told AP. “Today, that is down to under 50% for the first time. So giving has grown, but fewer people are participating.”
Nonprofits are feeling the pinch.
“In 28 years, I have never seen so many complex issues at once,” said Candace Gregory, president and CEO of the Open Door Mission in Omaha, Nebraska. She said individual contributions “are following the national trend,” and that at a recent conference of more than 300 rescue mission executives, her peers were “saying the same things.”
Ms. Gregory told The Washington Times, “It is a double whammy as donations are down and [demand for] services are up in comparison to this time last year, along with the challenge of trying to meet the food insecurity issues and there not being enough food surplus to even purchase to meet the needs.”
According to Amy Eisenstein, chief executive of fundraising consultancy Capital Campaign Pro in Westfield, New Jersey, the drop in individual donor participation to below 50% is “disappointing, though not surprising.”
Ms. Eisenstein said via email that a fall in “regular religious participation/attendance” is one potential factor, since many donors gave “through their religious institutions.” At the same time, she noted “an increase in selfishness in society in general,” for which she blames social media and the global economy.
She said negative media attention focused on “a few bad actors” has eroded trust in charities, and that some potential donors have “widespread misconceptions” about administrative and overhead costs. Such potential donors may have “unfounded fears about abuse of funds.”
To counter these misconceptions, Ms. Eisenstein said, “I would love to see more widespread media attention on the positive work of charities and acknowledgment of sound business practices, including the importance of and value in administrative and overhead costs.”
Ken Turpen, executive vice president of Thompson & Associates, a Nashville firm that helps nonprofit donors with estate planning, said too many charities have lost a personal connection with potential donors.
“It’s an over-reliance on technology type gifts instead of relational giving … the nonprofits getting out there and getting to know their donors, doing a lot to build relationships,” Mr. Turpen, formerly executive director of Philanthropic Services for Institutions in Silver Spring, said in a telephone interview.
He said charities relying on “disposable income from middle-income people” are facing an uphill climb in this economy. Donors may be touched by a certain cause, he said, but if gifts come from a monthly income now under strain, groups won’t see as much.
Mr. Turpin also cited a decline in religiosity as a factor.
He said organizations that concentrate on “major gifts and gifts of net worth” — ones that offer both a charitable donation and annuity income — are most likely to thrive in this environment.
The researchers said the survey is online at www.givingusa.org.
• Mark A. Kellner can be reached at mkellner@washingtontimes.com.