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FYI

Giving USA: Total U.S. charitable giving remained strong in 2021, reaching $484.85 billion

 

The rest of the story . . .

“The story of charitable giving in 2021 is closely tied to the events of 2020, a historic year that included a global pandemic, economic crisis and recovery, efforts to advance racial justice, and an unprecedented philanthropic response. In 2021, Americans continued giving more generously than before the pandemic. However, the growth in giving did not keep pace with inflation, causing challenges for many nonprofits,” said the chair of Giving USA Foundation. “In 2021, many donors returned to their favored causes, with many of the sectors that struggled in 2020 making a recovery in 2021.”

 

The stock market and GDP recovered to pre-pandemic levels early in 2021 and continued to grow throughout the year. The S&P 500 grew 26.9% (21.2% adjusted for inflation) and the GDP grew 10.1% (5.1% adjusted for inflation), creating strong conditions for charitable giving.

 

Bolstered by strong market conditions, very large gifts by some of the wealthiest Americans reached a total of nearly $15 billion in 2021. These types of megagifts (defined in Giving USA 2022 as gifts of $450 million or more) represent about 5% of all individual giving in 2021, and played an important role in lifting individual giving.

 

“The environment for giving is evolving in multiple ways. Robust economic growth translated to strong performance by institutional forms of philanthropy such as foundations and corporations. Yet these economic indicators may differ from what most people experience in daily life. The broader effects of the pandemic may have shifted individual jobs, incomes, lifestyles and family and financial priorities, potentially affecting their giving habits,” said Amir Pasic, Ph.D., the Eugene R. Tempel Dean of the Lilly Family School of Philanthropy. “The novel circumstances of the current giving landscape underscore the need for this report and other high-quality research, which help us understand how widespread these changes are and how they are affecting philanthropy.”

 

“In 2021, the U.S. had a strong year economically and also experienced inflationary pressures not seen in several decades. While the stock market performed well in 2021, there were some economic factors that may have affected nonprofits’ operations, such as labor shortages, supply chain interruptions and ongoing high demand for services,” said Una Osili, Ph.D., associate dean for research and international programs at the Lilly Family School of Philanthropy. “The growth that we see for the majority of the subsectors in 2021 is a reminder of the resilience and innovation that help to drive the philanthropic sector.”

 

Charitable giving grew from three of the four sources of giving in 2021. Giving grew or stayed flat to eight of the nine major types of charitable organizations. Despite uneven growth patterns, all four sources and seven of the nine recipient categories of giving experienced strong two-year growth, even when adjusting for inflation.

 

Highlights and Numbers for 2021 Charitable Giving by Source:

 Giving by individuals totaled an estimated $326.87 billion, rising 4.9% (staying flat at 0.2%, adjusted for inflation).[i] Giving by individuals comprised less than 70% of total giving for the fourth time on record, and for the fourth consecutive year. It also achieved its second highest total dollar amount to date, adjusted for inflation.

 

 Giving by foundations grew 3.4%, to an estimated $90.88 billion (-1.2%, adjusted for inflation). Giving by foundations, which has grown in 10 of the last 11 years, represented 19% of total giving in 2021, its largest share on record. This year’s giving is the second-highest dollar amount on record when adjusted for inflation. The estimate for giving by foundations was created by the Indiana University Lilly Family School of Philanthropy using data from Candid.

 

Giving by bequest totaled an estimated $46.01 billion, a decline of 7.3% (-11.4%, adjusted for inflation). Bequests are known to be particularly volatile from year to year, and it is likely that several extraordinarily large bequests in 2020 resulted in a comparative decline in 2021. However, even with the decline, bequest giving reached its second-highest level of giving when adjusting for inflation.

 

 Giving by corporations is estimated to have increased by 23.8%, totaling $21.08 billion (18.3%, adjusted for inflation). Corporate giving includes cash and in-kind contributions made through corporate giving programs, as well as grants and gifts made by corporate foundations. A strong GDP and a good year for corporate pre-tax profits (37.4% growth, 31.2% when adjusted for inflation) account for the strong growth in giving, although the total represents just 0.7% of corporate pre-tax profits.

 

“The research results show donors maintained their commitment to generosity with two-year growth in individual giving of 4.7 percent, adjusted for inflation,” said Peter Fissinger, chair of The Giving Institute, and Senior Advisor for Campbell & Company. “While Giving USA measures one type of generosity—charitable contributions—there are also signs that Americans helped their neighbors in myriad ways in 2021 that reflect the breadth and depth of their generosity.”

 

As the giving landscape continues to change, The Giving Institute, Giving USA Foundation and the Lilly Family School of Philanthropy are committed to providing new information on the most pressing topics in philanthropy. This year, the Giving USA report features a new chapter dedicated to understanding giving patterns of donor-advised funds and their donors, featuring new, original research that has not been published anywhere else.

 

“Several of the subsectors that struggled in 2020, such as giving to health and giving to arts, experienced a recovery in 2021,” said Josh Birkholz, vice-chair of Giving USA Foundation and CEO of BWF. “Conversely, several subsectors that experienced strong growth in 2020, such as education and human services, did not fare as well in 2021. On the bright side, two-year growth for each of these subsectors was over 5%, even when adjusting for inflation.”

 

Highlights and Numbers for 2021 Charitable Giving to Recipients:

↑ Giving to religion grew by 5.4% with an estimated $135.78 billion in contributions (flat at 0.7% adjusted for inflation).

 

Giving to education is estimated to have declined 2.8% to $70.79 billion (-7.2% adjusted for inflation). Education giving includes contributions to K-12 schools, higher education and libraries.

 

↑ Giving to human services increased by an estimated 2.2% totaling $65.33 billion (-2.4%, adjusted for inflation).

 

↑ Giving to foundations is estimated to have increased by 9.3%, to $64.26 billion (4.4%, adjusted for inflation).

 

↑ Giving to public-society benefit organizations increased an estimated 23.5% to $55.85 billion (17.9% adjusted for inflation). This category includes a wide range of charitable organizations, including national donor-advised funds, United Ways and civil rights organizations.

 

Giving to health is estimated to have grown by 7.7% to $40.58 billion (2.9%, adjusted for inflation).

 

↑ Giving to arts, culture, and humanities is estimated to have increased 27.5% to $23.50 billion (21.8%, adjusted for inflation).

 

= Giving to international affairs is estimated to be $27.44 billion, remaining flat at 0.0% growth (-4.5%, adjusted for inflation).

 

↑ Giving to environmental and animal organizations is estimated to have increased 11.0% to $16.32 billion. Adjusted for inflation, donations to the environment/animals subsector increased 6.1%.

 

“Giving to public-society benefit organizations has grown in 11 of the last 12 years and is one of the few sectors that grew in both 2020 and 2021,” said Patrick M. Rooney, Ph.D., executive associate dean for academic programs at the Lilly Family School of Philanthropy. “Growth in this subsector aligns with increased support for legal rights and voting nonprofits, but it is most strongly driven by giving to national donor-advised funds (DAFs). Some of America’s wealthiest individuals have announced major gifts to national DAFs, and the growth in the stock market more generally in the past two years has helped to bolster this subsector.”

 

Giving to individuals is estimated to have grown 1.8%, to $11.74 billion (-2.7%, adjusted for inflation). The bulk of these donations are in-kind gifts of medications to patients in need, made through the patient assistance programs of pharmaceutical companies’ operating foundations.

 

Unallocated giving was negative $26.75 billion in 2021. This amount can be considered the difference between giving by source and use in a particular year. This amount includes the difference between itemized deductions by individuals (and households) carried over from previous years. The tax year in which a gift is claimed by the donor (carried over) and the year when the recipient organization reports it as revenue (the year in which it is received) may be different.