Despite inflation rates reaching a 40-year high, giving to nonprofits in the United States in 2022 reached nearly $5 Billion, according to Dr. Una Osili, Associate Dean for Research and International Programs at the Indiana University Lilly Family School of Philanthropy. Dr. Osili presented Giving USA 2023: The Annual Report on Philanthropy for the Year 2022 to a full auditorium on Friday, June 23, at the National WWI Museum & Memorial as part of Nonprofit Connect’s 501c Success National Speaker Series. The series is sponsored by Byrne Pelofsky + Associates and Bank of America. Dr. Osili is an internationally recognized scholar in economics and leads the research and publication of Global Philanthropy Tracker and the Global Philanthropy Environment Index, as well as Giving USA™, the annual report on American philanthropy.
Giving USA 2023 showed a reduction in overall giving from the all time high of $516 Billion in 2021 in response to the Covid 19 pandemic and social justice movements. In 2022, a mixed economic environment led to a 3.4% drop (in current dollars-10.5% adjusted for inflation) as individual donations declined (down 13.4% in inflation-adjusted dollars). However, mega-donors increased giving, representing 5% of individual giving at $13.96 Billion. When adjusted for inflation, corporations and foundations experienced continued two-year growth in giving.
Despite some declines, Dr. Osili highlighted opportunities and trends for nonprofits to consider. Individual giving as a share of disposable income has been at 2% for 40 years and dipped to 1.7% in 2022. According to Dr. Osili, this represents an opportunity to focus on engagement of those who sat out last year. A vehicle that is effectively drawing more donors is Socialized Giving. Social Media showed $6 Billion in giving last year. Giving by foundations grew by 10% and the sectors who received the most amount of giving were religion, health, and arts, culture & humanities. However, inflation wiped out the majority of real gains in all sectors with the exception of the international sector in which the war in Ukraine created an opportunity for growth.
Dr. Osili suggested nonprofits continue to tell their story, citing a fact that Americans trust nonprofits greater than government and business institutions. 13% of all U.S. employment is in the nonprofit sector. Her suggestions for 2023 are to expand online giving, paying particular attention to ease-of-use across all platforms, focusing on cultivating and engaging with younger donors, building the donor pipeline, and adapting to and embracing new Artificial Intelligence (AI) tools.
Declines in giving last year along with and record inflation wreaked havoc on all nonprofits and their ability to perform their mission. However, Giving USA’s 40-year historical data show charitable giving consistently rebounds from downturns.