Karen Rotko-Wynn, CFRE, Chief Business Enterprise Officer, Alford Group. Karen brings over 30 years of experience in the nonprofit community and has provided counsel to more than 70 organizations, offering her expertise in major gifts fundraising, feasibility studies, and capital campaigns.
On Tuesday, June 21, Giving USA released The Annual Report on Philanthropy for the Year 2021. Every year, the Giving USA report is greatly anticipated, and that holds especially true for the past year, given the ongoing pandemic and continued efforts to advance racial and social justice. Here is a brief overview and some key takeaways from this year’s report to help inform your philanthropic strategy for the upcoming year for nonprofit organizations. The livelihood of any nonprofit usually rests on receiving donations from individual and corporate giving, legacy planning, and fundraising events.
#1 – Giving reached a record $484.85 billion in 2021.
Giving reached a record $484.85 billion in 2021, which is an increase of 4.0% in current dollars. However, after adjusting for inflation, giving actually decreased by 0.7%. Giving remained strong despite the challenges the country experienced in the past year, such as the ongoing Covid-19 pandemic and rising inflation. A lot of that was due to a strong year for the stock market and GDP. The S&P 500 grew 26.9% (21.2% when adjusted for inflation), and the GDP grew 10.1% (5.1% when adjusted for inflation).
#2 – Giving increased for 3 of the 4 sources of contributions.
Giving by individuals, foundations, and corporations all increased in 2021. Giving by individuals makes up the biggest portion of total giving at 67% with a total of $326.87 billion. Individual giving rose by 4.9%, although when adjusted for inflation it stayed relatively flat and only rose 0.2%.
The next largest portion of total giving is giving by foundations, which grew by 3.4% to total 19% of giving. Giving by foundations includes grants made by independent, community, and operating foundations, which in 2021 totaled $90.88 billion.
After experiencing a dip in 2020, giving by corporations rebounded and grew by 23.8% (18.3% when adjusted for inflation). Giving by corporations is largely driven by GDP, and given GDP growth over the past year, giving by corporations accordingly increased.
Lastly, giving by bequests totaled an estimated $46.01 billion in 2021. It declined by 7.3% from 2020 and is the only one of the four sources of contributions to experience a dip in the past year. Giving by bequests tends to vary from year to year as a handful of large gifts in one year can greatly impact the overall total.
#3 – Several subsectors that experienced a decline in 2020 rebounded in 2021.
After experiencing a dip in 2020, the health subsector and the arts, culture, and humanities subsector rebounded in 2021. The health subsector declined -5.7% between 2019 and 2020 and grew 7.7% between 2020 and 2021. The arts, culture, and humanities sector declined -5.6% between 2019 and 2020 and increased 27.5% between 2020 and 2021. Both of those subsectors experienced a rebound as donors returned to their favored causes, as well as the fact that organizations could once again host in-person fundraising opportunities, such as walks and events.
On the flip side, some subsectors experienced a slower level of growth or declined over the past year. The education subsector saw a decline of -2.8% between 2020 and 2021, and the human services subsector did not reach the same heights as it did between 2019 and 2020. During that time span, human services increased 9.3% but only increased 2.2% between 2020 and 2021, resulting in a slower level of growth for the past year. Overall, however, giving remained flat or positive for eight of the nine subsectors over the past two years.
As nonprofits look ahead to the next year and think critically on how they can align their philanthropic strategy with this most recent Giving USA report, it is important to keep a few key takeaways in mind.
First, organizations must continue to be flexible and innovative. As we enter a third year of the pandemic and inflation continues to rise, it will be critical for organizations to be nimble and be willing to adjust to unforeseen challenges.
Second, technology will continue to be critical. Hybrid events are here to stay, and online giving now accounts for 12% of total fundraising, which is a growing share of giving.
Third, if you or your organization are looking for areas of opportunity, then planned giving and corporate partnerships might be potential avenues of opportunity. As mentioned above, corporate giving saw a resurgence after experiencing a dip in 2020 and grew by 23.8%. It is also important to remember that although bequests come in third when it comes to sources of contribution, that still amounts to $46.01 billion dollars.
Lastly, do not overlook the importance of staying in touch with and communicating with your individual donors. They are your biggest supporters and advocates, so it is crucial that you keep them in the loop with your latest news.
All data in this article is from Giving USA 2022: The Annual Report on Philanthropy for the Year 2021, a publication of Giving USA Foundation, 2022, researched and written by the Indiana University Lilly Family School of Philanthropy, unless otherwise noted.
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