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Americans got stingier after a pandemic surge in giving, but donations remain high

More Americans shut their wallets and purses last year after a brief run of unprecedented generosity, but they’re still giving at record levels.

Charitable contributions fell in 2022 for the first time since the Great Recession as households adjusted their budgets to historically high inflation and record stock market losses, according to an annual report last week by the Giving USA Foundation and Indiana University’s Lilly Family School of Philanthropy.

Total U.S. charitable giving declined by 3.4% to an estimated $499 billion last year from around $517 billion in 2021. That’s a drop of 10.5% when adjusted for inflation — which fell to 4% in May after peaking above 9% in June 2022, eating into consumers’ budgets and the value of their charity dollars alike.

The decrease follows two record-setting years during the pandemic, when giving surged from nearly $437 billion in 2019 to over $486 billion in 2020 — a level that, nevertheless, was bested only by last year’s and by 2021’s all-time high.

Generosity is more resilient than the economy.

Josh Birkholz, Chair of the giving USA Foundation

As Giving USA Foundation Chair Josh Birkholz put it, that suggests that “generosity is more resilient than the economy.”

After the pandemic-era influx of resources, many nonprofit groups are adjusting to a reality in which “the dollars they raised see less purchasing power and do not go as far in fulfilling the needs of their communities,” said Una Osili, associate dean for research and international programs at the Lilly school and a lead researcher on the report.

The downturn comes as service-focused charities like food banks face increased demand, with many grocery prices remaining high and the most vulnerable households grappling with newly reduced federal assistance.

“It’s an extraordinary amount of pressure for us,” said Michelle Book, CEO of the Food Bank of Iowa, which is distributing more food than at any time in its four-decade history.

Contributions have so far kept pace with the group’s swelling operating expenses; this year’s budget is twice last year’s, Book said. But “in the next few months those lines will cross if we continue in the same trajectory, with folks pulling back with donations and the need increasing,” she warned.

Giving to human services nonprofits, a category that includes food banks, decreased by 8% in inflation-adjusted dollars last year, the Giving USA report found. Seven of the nine nonprofit subsectors the researchers studied also posted inflation-adjusted declines, with contributions to educational and public-society benefit organizations, such as United Way, seeing double-digit drops.

Donations to international affairs organizations, by contrast, jumped by 2.7%, which the researchers attributed largely to a surge in popular support for Ukraine after Russia’s invasion in February 2022.

While last year was only the fourth time in 40 years that Americans gave less than they did the year before, it followed a period when many had more disposable income — thanks to surging stock portfolios, a historic series of federal relief packages and months of lockdowns that limited where people could spend.

Widespread appreciation for front-line workers like nurses and service-industry staffers spurred many consumers to donate during the pandemic like never before, researchers said. Among the range of charitable groups people gave to, human-services, public-benefit and educational organizations were among the top performers.

“There was a tremendous need and a strong human impulse to give,” Osili said, adding that media coverage jolted that trend. “When people heard about rising food insecurity or housing insecurity, and how they can get involved, many people stepped up in their giving.”

During the height of the pandemic, we were fortunate to receive an outpouring of support from the American public. Unfortunately, the need hasn’t gone away.

Casey Marsh, Feeding America’s CHIEF DEVELOPMENT OFFICER

The 200 partner food banks in the network operated by Feeding America — the largest food charity in the country — collectively raised $2.17 billion in 2022, down 14% from the year before, said Chief Development Officer Casey Marsh. Compared to 2019, however, last year’s fundraising was up by 85%.

“During the height of the pandemic, we were fortunate to receive an outpouring of support from the American public,” said Marsh. “Unfortunately, the need hasn’t gone away. Across the entire network, we have to purchase more food than we ever have before, so that’s really eating into a lot of the reserves that were built up during this tremendous influx of generosity.”

Giving by individuals dropped by nearly 14% when adjusted for inflation, part of a larger trend in which deep-pocketed mega-donors make up a growing share of charitable contributions. Just six individuals and couples made up 5% of all individual giving in the country in 2022, the Giving USA report found.

Less than half of Americans were donating to charity as of 2018, down from two-thirds in 2000, Lilly school researchers have found. Individuals still make up 64% of total giving, according to the new report, which also tracked donations by foundations, bequests and corporations.

“There’s sufficient concern, especially when you look at that broader decline by individuals,” said Osili, “and some of that decline is not just economic but has a lot to do with trust in institutions.”

While individual giving is on the decline, those who do donate are contributing larger amounts — a sign of wealthy individuals’ growing philanthropic clout. At Feeding America, Marsh said individual giving fell by 17% last year despite the average gift value declining only slightly.

“People who were giving small amounts like $50, $100 — that is the segment of donors we’re seeing declines in across the network, not so much the multithousand or multimillion-dollar gifts,” Marsh said, “which makes sense if you’re looking at the impact of inflation.”

But, she added, “it is a little concerning for the long-term pipeline of how we catalyze a movement to continue the momentum to end hunger.”

This post appeared first on NBC NEWS

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