Summer is fully upon us, but as always, as we are in the midst of one season, we are always looking forward to what is next and reflecting on what has happened within the sector in the past. On June 25, 2024, The Giving USA Foundation, in partnership with Indiana University Lilly Family School of Philanthropy, released Giving USA: The Annual Report on Philanthropy. I wanted to take a bit to talk about the trends this comprehensive report is showing and about upcoming reports that NAO will be releasing as well. Knowing the trends and impacts within our sector is critical for future planning of what giving may look like.
The Giving USA report looks at giving trends, comparing 2021-2022 to 2022-2023. Much of the information is similar to what we already know – individual giving is down as inflation rises. However, the news isn’t all bad. 2023 saw an all-time high in giving, with 557.16 billion dollars, even when adjusted for inflation. Bequests saw the only positive change over 2021-2022, with an increase of .6%. With 77 million Americans age 60 and older, bequests and planned giving are areas we should start focusing on now, as this number is expected to grow as the Baby Boomer generation continues to age. Their wealth grew 30% between 2019 and 2023, so stewarding these donors should be a critical step in your development planning going forward.
While the drop in individual giving wasn’t unexpected, the trend does seem to be slowing down, which shows a glimmer of hope. In 2021-2022, individual giving was down 12.6%, but in 2022-2023, it only dropped by 2.4%. With the higher prices throughout all purchasing areas and the perceived threat of a recession, this was still not as large of a decrease as we expected. Personal savings continued to trend down as well, impacting individual giving decisions.
Another area I found important to discuss is corporate giving. Corporation giving is the fastest area of growth, and they experienced a boost of income especially in the tech industry as the introduction of AI saw investments into the tech companies. Corporations are changing the way they give, and this is critical to look at when forecasting giving. According to the information provided on the webinar with Campbell & Company about the Giving USA report, corporations are moving away from traditional corporate foundations and are instead looking at several different ways to give back, including alignment with employee engagement, in-kind donations, impact investing, matching gifts and matching volunteer hours. This is important to pay attention to as we start looking at new ways to engage our corporate partners.
Finally, as we’ve discussed before, we are on the cusp of the greatest transfer of wealth the nation has ever seen. By 2045, an estimated 84 trillion dollars will be transferred from one generation to the next, with 16 trillion being transferred in the next ten years. This massive transfer of wealth will impact giving significantly, as Millenials and Generation Z will become the decision makers of where their philanthropic efforts will lead them, very likely changing who they give to and how they give. Engaging these younger donors now is critical to the continued success of all the important work done throughout the sector. Younger donors may not carry the same values as their elders when it comes to giving, and engaging those donors now before the great transfer of wealth occurs, will help sustain your donations beyond the elder generation.
In the next week, NAO will be releasing our wage study report and our compensation and benefits report. Continuing to look at trends not just in giving, but in the ways we pay and support our staff, are all critical to the success of our organizations.
I would love to hear your thoughts on the trends you feel are the most important for NAO to consider. Your feedback is vital to our work and helps shape our planning for the year ahead.
If you would like to dig deeper into the Giving USA report, you can find the link to purchase it here: Giving USA – The Giving Institute.