As I See It | Missy Gale, CFRE | President & CEO
Takeaways from Giving USA’s report on charitable giving in 2020
While a strong year-end stock market and giving in response to COVID-19 and racial justice efforts drove growth in contributions, a tumultuous year created an uneven picture
Giving USA just released the latest data on charitable giving, and one thing is certain: Americans responded with incredible generosity to the challenges of the past year.
In 2020 the lion’s share of giving came from individuals, foundations and bequests. All three of these are driven by the charitable intent of individuals, a reminder to fundraisers that no matter what the markets are doing, a relationship-based focus within our work is key. Giving USA’s national report parallels what we learned in North Texas through our Covid-19 impact survey. Many human service organizations saw an increase in giving, from new and repeat donors, whereas arts organizations had a tougher time in 2020. Taking a deeper dive, advancements in technology and broader use of fundraising tools yielded strong results. As I see it going forward, the use of technology in fundraising, especially for donor acquisition and stewardship, coupled with strong relationship management techniques, is the recipe for building a strong development program.
The report is packed with valuable research and insights for our work, and I highly recommend securing your own copy. In the meantime, read a few of our takeaways:
#1: A new record for charitable giving, $471.44 billion
In a year where giving played an unprecedented role, it’s important to consider not only the enormity of this number (topping 2019’s $449.64 billion) but also the context in which it was given. In 2020 we experienced not only a global epidemic, but also an economic, racial and social justice crisis. We want to celebrate charitable growth, the resilience demonstrated, and the nonprofit sector’s ability to innovate, while recognizing the magnitude of the hardships our communities faced.
#2: The economic, social & political environment had an impact on giving
Charitable giving grew for seven of nine major types of recipient charitable organizations:
- Religion – 1% increase
- Education – 9% increase
- Human Services – 9.7% increase
- Giving to foundations – 2% increase
- Public-Society Benefit – 15.7% increase
- International affairs – 9.1% increase
- Environment and Animals – 11. 6% increase
- Health – 3% decline
- Arts, culture & humanities – 7.5% decline
In the past five years, giving to public-society benefit organizations, environmental/animal organizations, and human services organizations saw the highest rates of growth. Religion has had the slowest rate of growth in the same time period.
The decline in giving to health was a surprise to many, but the category encompasses the “big disease” organizations, many of which are supported by large in-person fundraising events, like walks and runs. When these events were canceled or postponed fundraising efforts suffered.
Arts, culture & humanities were particularly impacted by shutdowns of in-person programming. The category experienced a significant decline in 2020. However, there is good news: the two-year change in giving percentages was positive.
#3: Giving by individuals, foundations and bequests grew; corporate giving declined
Charitable giving by source:
- Giving by individuals – 2.2% increase; Giving by individuals achieved its highest total dollar amount to date, adjusted for inflation, but it comprised less than 70% of total giving for the third consecutive year.
- Giving by foundations – 17% increase; Giving by foundations, which has grown in nine of the last 10 years, represented 19% of total giving in 2020, its largest share on record.
- Giving by bequest – 10.3% increase; Giving by bequest often fluctuates substantially from year to year.
- Giving by corporations – 6.1% decline; This type of giving is highly responsive to changes in corporate pre-tax profits and GDP, both of which declined in 2020.
Last year was challenging according to many economic measures. GDP declined by 2.3% from 2019. However, the passage of the CARES Act and the COVID-19 vaccine helped markets rebound in the second half of the year when most charitable giving occurs. By the end of 2020 the S&P 500, which is closely related to giving, grew 16.3%, and personal income, a factor that is significantly linked to individual giving, grew 6.1%.
Takeaway #5: Unprecedented innovation in fundraising models
- The year of pivot: charities moved to online services and fundraising programs
- Online giving: online giving reached its highest share of total giving on record-crucial for many nonprofits in 2020 at nearly 13%
- New donors: several nonprofits saw an increase in new donors responding to immediate needs; they must continue to communicate their impact and focus on their donor retention strategy
About Giving USA
For 66 years, Giving USA has provided comprehensive charitable giving data relied on by donors, fundraisers and nonprofit leaders. The research spans 53 million households, nearly 16 million corporations, over a million estates and approximately 82,000 foundations. Donations made to all of these entities ultimately go to nearly 1.1 million charities, and an estimated 300,000 religious organizations across the U.S.
The report is produced by Giving Institute, in partnership with the Indiana University Lilly Family School of Philanthropy.
M. Gale & Associates is a member firm of the Giving Insitute.
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