Wondering how to use Giving USA to inform your fundraising? Don’t.
We’re making our way into the back half of the calendar year and the Giving USA report has just come out, reporting on the nonprofit landscape in 2023.
The main takeaway? More of the same.
The best advice? Focus on the things you can control—your fundraising habits—and don’t get distracted musing over “trends.”
That said, if you, like me, find it interesting to think about trends in American charity (and what that means for culture), let’s take a closer look . .
WHAT’S UP?
One thing stands out immediately. With inflation continuing to hurt each of us, giving is down all over the place when adjusted for inflation . . . except in bequests.
Individuals, foundations, and corporations all gave less in 2023 than in 2022 when adjusted for inflation.
But bequests were up in 2023, even after inflation. It’s only a slight increase (0.6%), but it nevertheless stands apart. Before we dig deeper into the report, here’s a free reminder: don’t put off planned giving. We’re in the middle of the “Great Wealth Transfer” (which you don’t want to miss!), and we are fast approaching significant changes to the estate tax.
Don’t be uneasy about planned giving, and don’t put off the important because of the urgent. Heck, the Giving USA data even suggests that planned giving is shifting from important to urgent!
That said, let’s dig into the rest of the report.
WHAT’S NOT NEW?
Giving is up. Again.
Okay, that’s not the whole story. It’s also down. The charitable sector in 2023 amounted to $557.16 billion. That pretty common growth (a 1.9% increase over 2022), but it’s also a 2.1% decrease when you adjust for inflation.
And where does all that money come from? As happens each year, living individuals make up the vast majority (67%), followed by foundations in a distant second, then bequests, and finally corporations coming in last.
While the breakdown isn’t exactly the same every year, the pie chart—that is to say, the general breakdown—is consistent year over year. In America, individual donors (living and deceased) make up three-quarters of all giving. Foundations are a not insignificant chunk of that remaining 25%.
Here’s one reason, though, that this aggregate data isn’t super useful for you.
Many small, local nonprofits rely to an outsized degree on corporate giving: think local businesses giving back to the community. Other nonprofits have little hope of seeing a dime from corporations, let alone 7% of their revenue. In some areas of the nonprofit sector (like right-of-center policy), foundations play an unusually large role. In other words, the aggregate data may be interesting, but it’s not necessarily applicable in any given case.
Your general takeaway from this breakdown should be that individual donors are paramount for your success, and foundations give away a lot of money. But the specifics? That doesn’t affect your fundraising.
The next big breakdown is where the money goes.
Again: more of the same. Americans remain a religious people. Religion tops the list of charitable recipients, followed by education and human services. Interestingly, those latter two were tied for second place this year! For a decade or more, those three have jostled for gold, silver, and bronze, although not with the same percentage breakdown. (More on that below.)
Finally: GDP.
The charitable sector was right on the money at 2% in 2023, where it’s been (+/- 0.1%, with the exception of a rise in 2021) for over 20 years. Are we down a touch when we factor in inflation? Yes . . . but we’re more or less where we’ve been since the dawn of the millennium. That’s a not-insignificant improvement over the ’80s and ’90s, when we hovered around 1.7% of GDP.
One aside about the report—another thing “not new”: Giving USA claims its report is the “most comprehensive report on philanthropy.” That’s probably true, that it’s the “most comprehensive,” but that doesn’t translate to “entirely comprehensive.” Giving USA reports on trackable philanthropy, the sort of stuff that counts to the IRS as philanthropy, that professionals consider philanthropy. It does not account for the thousands—millions—of small charitable acts Americans do every day: giving to the homeless, supporting a neighbor in need, caring for elderly parents or sick children. Each of these things contributes to the rich culture of charity in America, and they are important aspects of the fabric and texture of American character.
So, Giving USA may be the most comprehensive report, but it is not actually comprehensive (period). This, however, isn’t a shortcoming, insofar as the ambition of the report is to research trends in “trackable” giving.
WHAT’S NEW?
Aside from bequests growing while other giving shrank, the most interesting thing in the report was the separation in 2023 of charitable giving levels from the S&P 500. Giving USA tells us that there is a “statistically significant correlation between changes in total giving and values on the Standard & Poor’s 500 Index.”
Generally, when the S&P spikes, giving does, too. And when the S&P takes a hit (think the 2008 crisis), giving plummets along with it.
When the S&P took a hit during the Covid years, so, too, did giving . . . but when the S&P enjoyed a rise in 2023, overall giving didn’t keep pace. The S&P’s 19.3% increase last year stands in sharp contrast to the philanthropic sector’s 2.1% decrease.
There’s no important takeaway from this change, but if we’re looking for novel findings or interesting trends, this is certainly one of them. It will be even more interesting to see how this trend plays out—especially in an election year.
WHAT’S . . . CONCERNING?
Religion remains the largest giving area in America by a comfortable margin. It’s not quite double education and human services, but it carries nearly one-quarter of all charitable dollars in America.
That’s the good news.
The bad news is that that percentage has been in sharp decline for as long as Giving USA has been around. 24% of all charitable giving is nothing to scoff at, but it’s a far cry from 57% in the mid-1980s.
Of course, this isn’t surprising. The rise of the “nones” has been all the rage (if a contested claim) for many years, and anyone who has talked with a priest or pastor knows the struggle of balancing the budget for most churches.
Americans are a religious people, yes, but less so in both our practices and our giving. This may not bode well for a nation whose governing document “was made only for a moral and religious people.”
WHAT SHOULD YOU DO?
If you’ve stuck with me this far, I’m flattered. But I have to suggest: It’s time to go thank some donors.
It’s been fun to look at the numbers and think about the trends . . . but if you’re a fundraiser, the important thing isn’t to wonder about trends in the philanthropic sector.
The important thing is to focus on what you have control over, which is where you spend your time and how you focus your efforts.
Fundraising is simple (not easy!): retain and upgrade the donors you have and acquire new donors. The way to do that is through communicating with your donors (through mail, email, phone calls, and meetings) and soliciting your donors.
The Giving USA report asserts that it “is a powerful tool for your advancement, providing a guide to informed fundraising and giving.” That’s a bold claim. The trends may be interesting, but whether we look year-over-year, in five-year increments, or all 40 years the report has been around, those trends do little to change how you should approach your fundraising—or your giving.
Whether the charitable sector grows by 40% or shrinks by 50%, your organization won’t see all of that gain or all of that loss. The way you can weather the downturns—however large or small—and enjoy growth in the charitable sector is by doing the right things, the right way, consistently, and consistently well over time. That means cultivating and inspiring donors by casting a vision and telling a story that invites donors to be a part of something meaningful to them.