Fundraising Published Date, 2024

A Year Of Mixed Results For Philanthropy: Key Insights From The 2024 Giving USA Report

Created By: CJ Orr
July 8, 2024

The recently released Giving USA report for 2023 provides a nuanced picture of charitable giving in the United States. While the headline figure shows a modest growth of 1.9% in total charitable donations, the reality is less encouraging when adjusted for inflation, revealing a decline of 2.7%. The market’s performance fell somewhat flat compared to expectations, with an anticipated more robust increase falling short of reality.

One of the bright spots in this year’s report is the notable increase in giving by bequests, which rose by 4.8%. This trend underscores the growing importance of planned giving in the philanthropic landscape. As the baby boomer generation continues to plan their estates and transfer their wealth, we expect planned giving to play an increasingly significant role in philanthropy over the coming years.

The Impact of Inflation

However, when adjusted for inflation, most categories did not see growth. While giving by individuals rose 1.6% (a decline of 2.3% after adjusted for inflation), giving to individuals dropped sharply by 17.2% (a 20.5% decline when adjusted for inflation). It’s important to understand the context behind this decline. The bulk of these donations typically consist of in-kind gifts of medications provided through pharmaceutical companies’ patient assistance programs. The decrease primarily reflects a reduction in COVID-19-related in-kind gifts, which is an expected development as the pandemic’s immediate impacts wane.

Another significant finding is the decline in individual giving as a percentage of disposable personal income, which fell to 1.9% in 2023 from 2.0% in 2022 and 2.1% in 2021. This trend highlights the impact of inflationary pressures on charitable donations. As essential goods become more expensive, individuals prioritize spending on necessities over charitable contributions. This shift is pushing smaller donors out of the giving space, reducing the overall share of disposable income directed toward philanthropy.

Philanthropy And The Economy

Despite these challenges, it is crucial to recognize the correlation between philanthropic giving and the stock market’s performance. Research has consistently found a statistically significant link between changes in total giving and the values of the Standard & Poor’s 500 Index (S&P 500) at year-end. In 2023, the S&P 500 was up 20%, substantially recovering from the 24% decline in 2022. Correspondingly, philanthropic giving was down by 2.7% in 2023, compared to a sharper decline of 10% in 2022. This pattern indicates that the philanthropic market is moving in correlation with broader market trends.

In conclusion, the 2023 Giving USA report depicts a lackluster year for philanthropy. While we saw an encouraging rise in planned giving and major gifts, there was a noticeable decline in contributions from mid to low-level donors. This shift can be attributed to economic pressures and changing priorities among individual donors.

Looking Ahead

At Orr Group, we remain optimistic about the future of philanthropy, particularly in the area of planned giving. As the baby boomer generation continues to transfer their wealth, we anticipate a significant impact on the philanthropic landscape. Furthermore, the correlation between market performance and charitable giving suggests that as the economy strengthens, so too will the capacity for individuals to contribute to the causes they care about.

While the past year may not have met all expectations, it provides valuable insights into the evolving dynamics of charitable giving. Understanding these trends is crucial for nonprofits and donors as they navigate the challenges and opportunities in the philanthropic sector.

Orr Group applies a data-driven and business-minded approach to help our nonprofit partners grow and sustain fundraising. Get in touch to understand how we can support your organization in achieving its goals today.

CJ Orr

CJ Orr is President and Partner of Orr Group. As an expert project and relationship manager with 10+ years of experience in the sector, CJ utilizes data, technology, and financially-backed trends to execute on the development of strategies and tactics to drive effective fundraising plans that meet or exceed targets.  

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