Illustration of people going over a giving report with graphs for strategic planning purposes.

Photo By Scott Graham, Unsplash

Report offers mixed results for charitable giving

By Alyce Lee Stansbury, CFRE, Notes on Nonprofits

The 2023 Giving USA report released June 20 includes good and bad news for nonprofits. For the good news, U.S. charitable giving reached $499.33 billion last year. The four sources of giving and how much they gave to charity are: individuals 64%, bequests 9%, foundations 21%, and corporations 6%.

Giving to international affairs and foundations outpaced inflation and giving to religious causes; health; arts, culture, and the humanities all grew in current dollars. This will be welcome news for nonprofits working in these areas.

Bad news for fundraising

Now for the bad news: Total charitable giving dropped 3.4% in current dollars, which is 10.5% when adjusted for inflation. This decline follows two years of recording breaking giving during the pandemic and is only the fourth time in 40 years giving did not increase year over year.

Three primary reasons for this decline are the rising inflation rate, decline in the S&P index, and a drop in disposable income. These factors contributed to the decline in giving from all four sources.

Individual giving declined

The most disturbing finding is giving by individuals dropped 6.4%. Individuals are the largest source of charitable gifts to nonprofits and the focus of most fundraising requests. While mega donors like McKenzie Scott are making significant philanthropic gifts, fewer Americans are giving overall.

Americans trust nonprofits

Nonprofits are the most trusted sector. 39% of Americans trust nonprofits more than government and business, however, trust in all three sectors is declining. This underscores the challenge of earning trust from current and prospective donors.

Online giving continues to grow

One bright spot is the continued growth of online giving which exceeded 10% of all giving. Nonprofits conducting online giving events and recurring giving programs may be better prepared to withstand a drop in the number of donors.

Trust is critical to giving

The 2022 report demonstrates what we’ve always known to be true; trust, engagement, and relationships are the foundation of philanthropy. Now is a critical time for nonprofit leaders to look at your fundraising plans for the remainder of 2023 and 2024 to determine if they include meaningful opportunities to engage with your mission.

Younger donors engage before giving

The report also confirms younger donors are less inclined to give to charity compared to their parents and grandparents at the same stage in life. This will require nonprofits to meet younger donors “where they are” and spend more time building trust and engaging interest before receiving financial support.

Relationship building critical to success

No matter the form or type of fundraising, the message is clear. Building authentic relationships is critical to fundraising success. That means spending more time getting to know people who already give, providing more opportunities for people to learn more and connect to your mission. Board members and staff will need to be involved in this effort which should include individuals, foundation representatives, donor advised fund-holders, public, and private sector funders who are being asked to give or award grants at the highest levels.

Fundraising is getting harder

Here’s one final thought: fundraising is getting more sophisticated. Nonprofits will need to make greater investments in technology, staffing, professional development, board education, and infrastructure support to achieve and sustain a thriving fundraising program. Raising money is already difficult and going to get harder.

Notes on Nonprofits is a column in the Tallahassee Democrat produced by Alyce Lee Stansbury, CFRE, President of Stansbury Consulting, and includes resources, responses to reader questions, guest columns, and timeless topics. This column first appeared on July 10, 2023 in the Tallahassee Democrat. Please send your comments and questions.

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