Charitable Giving in the U.S. Falls for the First Time Since the Financial Crisis

“Giving USA 2023: The Annual Report on Philanthropy for the Year 2022”—the longest-running and most comprehensive look at the sources and uses of charitable giving in America—estimates that last year saw US$499.33 billion of charitable giving; the 2022 results follow the two best years on record, including 2021, when giving surpassed half a trillion dollars (US$516.65 billion) for the first time. Such an annual decrease in giving is rare, usually seen during years with difficult or unusual economic conditions, which is reflective of the stock market volatility and economic uncertainty experienced in 2022. 

“Declines in giving like those we saw in 2022 have a tangible impact on nonprofit organizations, especially those that rely on charitable dollars to support their daily work,” Amir Pasic, dean of the Lilly Family School of Philanthropy, said in a news release.

When measured in current dollars, total charitable giving has fallen only three other times (1987, 2008, and 2009) in the last 40 years. Giving had been especially strong in 2020 and 2021 as donors rallied to help address increasing needs amid a global pandemic and economic crisis and recovery, and supported efforts to advance racial justice.

“Nonprofits and donors alike experienced the steady, negative impacts of inflation such as the growing cost of goods and high interest rates throughout 2022, and many of those challenges remain,” Pasic said. “However, Giving USA’s historical data also provides a case for hope: We have seen charitable giving rebound from each decline.” 

In 2022 there was growth in three of the four sources of giving (foundations, bequests, and corporations) in current dollars, but all four sources (including individuals) declined after adjusting for inflation, according to the report. Giving by foundations and corporations, however, posted positive two-year growth, even when adjusting for inflation. 

Mirroring the 2021 findings, very large gifts by some of the wealthiest Americans represented nearly 5% of individual giving last year. Six individuals and couples accounted for a total of US$13.96 billion in gifts. (The report didn’t identify donors)

Giving increased in five of the nine categories of nonprofits that receive charitable contributions (religion, foundations, health, international affairs, and arts/culture), although the growth largely did not keep pace with the 8% inflation rate. In inflation-adjusted terms, seven of the nine sub-sectors experienced a decline. Giving to foundations and in support of international affairs both grew in inflation-adjusted terms, at 1.9% and 2.7% respectively.

“Drops in the stock market and high inflation caused many households to make tough decisions about their charitable giving for the year,” Josh Birkholz, chair of the Giving USA Foundation and CEO of the fundraising consulting firm BWF, said in the release. “But despite uncertain economic times, Americans demonstrated how essential they view the nonprofit sector and its ability to solve big problems—by still giving nearly half a trillion dollars in 2022.”

Challenging economic conditions in 2022 included a 40-year-high inflation rate of 8%; flat growth in disposable personal income; and a 19.4% drop in the S&P 500 (down 25.4% when adjusted for inflation)—the first double-digit decrease since the financial crisis in 2008. The S&P 500 experienced steep declines toward the end of the year, when a large share of charitable giving takes place.

“Households were heavily impacted by economic uncertainty, the threat of recession, inflation, and changes in the stock market–and in turn, individual giving took the biggest hit of all in 2022. While in 2020 and 2021, giving was buoyed by stock market performance, in 2022, it appears individual donors were impacted by changing economic conditions,” Wendy McGrady, secretary/treasurer of the Giving USA Foundation and chief operating officer of fundraising consultancy the Curtis Group, said in the release. “Additionally, individual giving has been declining as a share of total giving for several years. It dropped to 70% of total giving in 2018, which was considered low, and has steadily decreased since then, falling further in 2022 to 64%.”

Despite last year’s economic downturn, there were some bright spots due to a strong labor market and 9% growth in GDP, according to Una Osili,associate dean for research and international programs at the Lilly Family School of Philanthropy. 

“The economic picture that emerges suggests that many households were stable—we did not see job losses or an increase in unemployment the way we did in the Great Recession,” Osili said in the release. “However, households tend to give when they are financially and economically secure—and the inflationary pressures meant that fewer households had extra to give. In addition, donors may not have been as compelled to respond to immediate needs as they had been during the early days of the Covid-19 pandemic or during the Great Recession.”