Charitable Giving and Fundraising in a Late-Pandemic World
In its July 28, 2021, issue, The Chronicle of Philanthropy reported on the results of a new study showing a steep decline in Americans’ charitable giving in the year 2018. That year, less than 50 percent of households in the United States made a contribution to a nonprofit group, representing a new low.
The study is conducted every other year by the Lilly Family School of Philanthropy, based at Indiana University. Since 2000, the Lilly School has sent a survey to more than 9,000 households to follow and record their charitable giving habits. The year it debuted, the survey showed that 66 percent of American households made a philanthropic contribution. The figures from the year 2018 are the latest ones available through the study.
Fewer donors, but more donations
The Lilly study results don’t mean that major philanthropists aren’t continuing to support philanthropic causes. Other statistics show charitable donations reaching record highs in recent years. The Lilly survey suggests that those contributions are being made by a smaller and smaller group of donors.
The majority of households led by college graduates and married couples, as well as those possessing at least $200,000 in wealth, made donations to nonprofits in 2018. But only four out of every ten whose wealth measured less than $50,000 did so.
This shift is not necessarily troubling, but it does represent an interesting change in the landscape of philanthropy. So what’s causing the decline?
Declining religious affiliation
Experts note a number of contributing factors. Membership in churches and other traditional religious institutions has decreased in recent years. This trend is tied to a drop in general religious affiliation. A growing number of Americans—particularly younger adults—describe themselves as “nones,” answering “none” to survey questions about religious identity. For example, in a 2019 - 2020 Pew Research Center study, 63 percent of those surveyed described themselves as “Christian,” whereas in 2009, 77 percent designated themselves that way.
Fewer active members of congregations means fewer people contributing to the numerous charities organized through religious institutions.
A sustained decrease in secular giving
However, declining rates of religious affiliation aren’t the only factor at play. Researchers have seen a decrease in giving to secular organizations ever since the worldwide Great Recession of 2008 – 2009. Secular giving still has yet to regain its traction. In fact, according to the Lilly study, only 42 percent of households made a contribution to a non-religious organization in 2018. This was a new low.
Declining trust in traditional institutions and nonprofits
The Chronicle of Philanthropy coupled the information on the historic low in giving with additional insights regarding giving during the COVID-19 pandemic. Over the course of 2020 and 2021, Americans’ trust in the transparency and veracity of nonprofit organizations also fell significantly.
This shrinking level of trust parallels the growing political and cultural polarization in the U.S., which goes hand-in-hand with a lack of trust in a broad spectrum of institutions, including government and media. People born in the millennial generation are particularly distrustful of these institutions.
What’s not yet clear is whether some giving spikes noted during the pandemic have produced only a short-term impact on Americans’ willingness to give, despite the long-term downward trend. It’s possible, experts note, that as life returns to more normal patterns of earning and spending, newly developed giving habits that increased in response to the pandemic might continue.
Philanthropy for a new generation
One important point to remember about the Lilly study is that it only tracks donations given to nonprofit organizations, while ignoring giving through online and offline crowdfunding projects. This means that it is likely missing perspective on giving patterns among younger people, who are more likely to use these channels for their philanthropy. In addition, the Lilly study doesn’t track in-kind contributions in the form of goods or professional services. Lower-income households that are not able to give financially may still be able to contribute their time or labor.
Figures published in 2020 from the online statistics source Statista found that crowdfunding generates more than $17 billion per year in North America. The researchers at Statista also project an almost 15 percent compound annual growth rate over the next few years. The key demographic contributing to crowdfunding campaigns is exactly what you’d expect: adults ages 25 to 34.
Putting this part of the picture into perspective was a spokesperson for the Giving USA Foundation, who told the Chronicle in 2020 that, when looked at over a longer time span, the data show a higher percentage of Americans contributing to nonprofit causes, often in ways not usually noted in the traditional philanthropy community.This may be a moment in time when we decide to recalibrate our expectations of philanthropic giving in alignment with the patterns of an emerging generation.