Charitable Giving Trends: Where Do You Fit In?

The annual report from the Giving USA Foundation, produced in partnership with the Indiana University Lilly Family School of Philanthropy, allows for comparison of data collected annually for the past 65 years. Over time, there are definitely discernable trends in giving, beyond the annual numbers, some of which were reinforced in 2023.

In 2023, total giving was up nearly 2% but when adjusted for inflation, it was down 2%. Most charitable giving in the U.S. continues to come from private families and individuals, including through Donor Advised Funds (DAFs) whose giving can go to other charitable vehicles, such as foundations. Interestingly, 2023 was the first years since 2017 that did not feature unusual events or legislation that can impact charitable giving. Despite a strong stock market and real estate prices, 2023 was a relatively flat year for giving and still below the record highs hit in 2021 during COVID.

2023 Charitable Giving by Source*

***Foundations have become a major force in charitable giving since the 1980s. In 1983, foundations accounted for just 6% of total giving in the U.S. But by 2023, foundations accounted for nearly 1 out of every $5 dollars given to charity (19%). 

Grants from foundations dropped to $104 billion in 2023 vs. $106 billion in 2022. But before that, giving by foundation had grown for 12 straight years. Foundations are required by law to give at least 5% of their total assets each year, and typically they keep the vast majority of their assets invested. As foundations’ assets rise in value, especially during the past decade, the amount they give away increases too.

The Lilly Family School of Philanthropy expects giving by foundations to continue to grow in the years ahead because large donors, including wealthy philanthropists Bill Gates, Mike Bloomberg and Warren Buffett, have been giving more to their foundations. In the four years ending in 2023, giving to foundations was higher than at any other time since Giving USA began tracking this data in 1978.

***Giving to social service organizations has risen to rival amount given to education. Religious organization are by far the biggest recipients of U.S. charitable giving, with education taking the #2 spot for many decades. But since the pandemic, giving to social service organizations that help low-income and otherwise vulnerable people has grown.  

Social services was the second-largest category for charitable giving behind religion for the second consecutive year in 2023. Until 2020, education-related giving, such as donations to colleges and universities, was usually the next largest category after religion.

2023 Charitable Giving By Recipient*

Source: https://philanthropy.indianapolis.iu.edu/news-events/news/_news/2024/giving-usa-us-charitable-giving-totaled-557.16-billion-in-2023.html

Other trends indicated in surveys and analysis by service providers to nonprofits:

***Average age of first-time gifts by major donors seems to be rising. This is according to a survey of  9,600 donors to educational institutions who gave at least $50,000 in a year conducted by Evertrue, a nonprofit software firm. The average age at which these major donors made their first large gift (at least $50,000) has increased by roughly a decade to 66 years old (vs. 55 years old) over the past two decades. Notes Evertrue’s Mike Brucek: “This could suggest that the major gift donor population is increasingly shaped by donors who, having spent more years in the workforce, are making more calculated, impactful decisions regarding when to part with their assets.”

***Growth in scheduled online monthly giving. Online giving declined by 1% in 2023, according to the M+R Benchmarks study. Nevertheless, the study found that revenue from monthly giving rose by 6%, accounting for 31% of all online revenue in 2023 (up from 27% in 2022). “Donors who contribute ongoing monthly gifts can provide a greater lifetime value than supporters who give just once or sporadically. This is a reliable fundraising avenue to consider as the nonprofit sector weathers fluctuations in total giving,” notes Joshua Meyer, VP of Market Engagement for software firm Bloomerang. 

***Corporate donations growing fastest. Corporate donations were just 7% of total giving in 2023 ($36.6 billion), but the amount given is growing the fastest – 14% annualized during the past five years. Corporate philanthropy is growing as more companies offer a wide range of giving opportunities for their employees. According to research from Double the Donation, more small and mid-sized companies are getting involved in corporate philanthropy, and businesses are adopting more employee-driven corporate giving programs, like matching gifts. 

*Source for charts in this post: https://philanthropy.indianapolis.iu.edu/news-events/news/_news/2024/giving-usa-us-charitable-giving-totaled-557.16-billion-in-2023.html