Fewer Americans are giving
"Generosity is an expression of what is best in the American spirit—the common pursuit of the nation's well-being." - Kenneth G. Hodder
Americans are generous. In 2023, we contributed nearly $600 billion—$557.16 billion from living individuals and $42.68 billion from bequests (gifts made as part of a will or trust)—to charitable causes. (For comparison, corporations contributed $36.55 billion and foundations $103.53 billion during the same year.) According to Philanthropy Roundtable, in any given year, Americans donate twice as much as our neighbors in Canada and more three times as much as most other countries.
For more than a century, our generosity—and the causes and organizations it supports—has been a cornerstone of American society. Today, it is relied upon by nearly 1.8 million nonprofit organizations that provide food, shelter and social services to those among us in crisis; public spaces, museums, theaters and think tanks to improve our quality of life; medical research and essential health care to improve health and wellbeing; schools, colleges, and universities to educate and expand knowledge; and so much more.
Giving from average Americans, however, is waning. The share of U.S. households donating to charitable causes has declined, from about two-thirds of households in 2008 to less than half in 2018.
The decline, unfortunately, isn’t limited to dollars: Americans are also volunteering less. According to the U.S. Census Bureau and the U.S. Bureau of Labor Statistics, volunteerism reached a 15-year low in 2015 with 24.9% of Americans volunteering their time. Things improved for some years but the downward trend has since continued. AmeriCorps reports the formal volunteering rate dropped from 30% in 2019 to 23% in 2021, the steepest decline since the agency began collecting data in 2002.
Meanwhile, giving from wealthy Americans remains strong—nine out of ten reported donating to charity within the last year (2024 Bank of America Private Bank Study of Wealthy Americans)—helping to offset losses from average givers. In fact, large donations, usually referred to as major and principal gifts, have surged—once representing one-tenth of all charitable donations, they now represent two-thirds—creating a phenomenon referred to as “top-heavy philanthropy” or “donors down, dollars up.” Unfortunately, the latter is no longer accurate: the total value of U.S. giving dropped 2.1% in 2023 (adjusted for inflation).
Historically utilized primarily to fund capital projects—new initiatives, expanding programs, building or renovating facilities, etc.—today, these large gifts are increasingly funding day-to-day operations. As Gara LaMarche shared with Inside Philanthropy recently, “a number of groups were lucky to get one-time substantial, unsolicited, flexible support from MacKenzie Scott. Not all deployed those windfalls toward sustainability, and some are facing a ‘fiscal cliff’ for having used the funds to plug holes in current budgets.”
Regardless of their size, most nonprofits today receive the majority of their financial support from a small number of donors and are thus at significant risk should those donors shift their giving priorities or practices. This also means a relatively tiny group has increasingly outsized influence on nonprofit priorities and missions.
Why this is happening is not entirely clear, although there are obvious contributors including increased economic uncertainty and inflation, tax law changes, decline in religious affiliation, impact of the COVID-19 pandemic, declining trust in institutions (including nonprofits), shifting priorities and practices of younger generations, and increasing focus on mega-gifts within the nonprofit sector. We’ll explore causes of this trend—as well as dig deeper into its implications—in future posts. In the meantime, I welcome your questions and thoughts.
Sources:
Coolest Gadgets
Inequality.org
Inside Philanthropy
National Philanthropic Trust
Philanthropy Panel Study
Philanthropy Roundtable
The Generosity Commission