There are fault lines in the philanthropic landscape.
In June, the Giving USA Foundation—of which I voluntarily serve on the executive committee—releases its annual report on philanthropy. Generally, giving grows. For decades it has grown an average of 6% per year. Giving has declined only five times since 1967 (although it hasn’t always kept pace with inflation). Compared to volatile sectors like real estate or energy, growth in giving seems resilient.
Even the headwinds of a pandemic and social tumult in 2020 and 2021 didn’t diminish charitable giving. Giving grew 9% and 4% in those years (current dollars). When reports come out on the effects of 2022’s economic uncertainty on last year’s giving—whether good or bad—it’s likely a temporary blip in the inexorable rise of philanthropy.Why worry?
There are fault lines in the philanthropic landscape. Participation has declined steadily for two decades: Today, fewer than half of households report making a charitable gift each year. Compare this to 2020, when 66% of American households donated to charity.
Despite declining participation, giving grows because high-net-worth households increase the amounts they give. As a result, charitable giving—like many sectors of our economy—has become more concentrated, with top-end donors representing a higher proportion of total giving.
What is the cause of this imbalance? Is it that individuals have lost faith in the power of philanthropy, as evidenced by declining trust in institutions? Are everyday households squeezed by inflation and stagnant wages? Do attention-grabbing headlines of charity wrongdoing crowd out positive messages from the majority of nonprofits doing good? Perhaps we should examine today’s sophisticated fundraising operations that shower attention on big givers, with lip service for those of comparatively modest means.
