Drumroll please…
The 2023 Giving USA report is hot off the presses and there are some surprises and not surprises. First, the headline: estimated total giving in 2022 was $499.33 billion down from $516.65 billion in 2021. The power of philanthropy is inspiring. But, peeking under the surface, here are 4 highlights for me and one word of caution:
Highlight #1: Giving finally slowed. In 2022, total giving declined by about 3% from 2021.
This isn’t surprising since both the Fundraising Effectiveness Project and Blackbaud reports started to point to a slowdown in giving and numbers of donors. After all, 2020 and 2021 were exceptional years how donors continued to step up to support a country and world dealing with a global pandemic, overdue calls for social reform, a fractured and divided political landscape. Since giving is not done in a vacuum, what caused the decline were the market fluctuations, economic downturn, and record inflation. Donors—megadonors and everyday donors alike—were paying more for everything and their disposable income was lower than in previous years.
Highlight #3: Individual giving remains the largest piece of the pie but the amount of individual donations and the number of individual donors is shrinking at an alarming rate.
While individual donors still remain the largest contribution source including bequests at 73% of the pie, the number of donors has been steadily declining since easily 2018. This must be a cause to sound the alarm about donor retention. If you aren’t building your fundraising on how to keep more donors, you will likely lose them over time. And, if you don’t have a legacy program in place, now is the time to start one. Begin to encourage your audience now to consider leaving your nonprofit in their estate plans. This is a message that takes time to sink in, so expect a long marketing timeline to get the message across.
Highlight #3: Giving from foundations, corporations, and bequests grew in current dollars.
Surprisingly, giving from foundations, corporations, and bequests grew in current dollars from 2021 to 2022. Bequests are volatile generally, so this is not completely surprising. But this uptick in contributions from foundations and corporations doesn’t mean you should double down on raising money from these sources. Individuals, whether through personal giving, family foundations, or bequests, still comprise the majority of all giving. And here’s a fun factoid, gifts from bequests in 2022 totaled $46.5 billion compared to $29.48 billion from corporations. Where do you think it’s worth your fundraising time?
Highlight #4: Top subsectors that saw increased giving: International affairs and grant-making Foundations (10% each) in current dollars. Religion continues to be the top charitable designation followed by Human Services and Education.
It looks like the causes that donors supported most started to return to pre-pandemic levels in general with the exception of the rise in supporting international causes. This was mostly likely in response to the war in Ukraine and the multiple humanitarian crises we saw last year. So, once again, donors were supporting causes that were important to them AND to other issues they felt their giving can help.
What to do with all these numbers?
It can feel overwhelming reading the GivingUSA results and wondering how this applies to your fundraising. If you takeaway nothing else, it should be to make donor retention a priority.
We’ve seen in both the Fundraising Effectiveness Project and other GivingUSA reports that the number of donors has been steadily declining for the last 20 years by about 20%. Once upon a time 2/3 of Americans philanthropically supported causes. Today, that percentage is below 50%. And we are seeing a decline in volunteers, too.
Your stewardship now must be built on retention.
This is a drum beat we play regularly. Here’s why it’s critical to pay attention to right now.
Can your organization afford to continue to waste time and money on churn?
