A report on American philanthropy released this week revealed that charitable giving in the U.S. reached record levels last year — in spite of an economy that saw paychecks slashed and unemployment soaring.
What did the report say?
The annual Giving USA report published in June revealed that Americans gave a record $471 billion to charity in 2020, according to the Associated Press. The Giving USA Foundation said 2020’s levels beat 2019’s record giving of $448 billion by 5.1%, the AP said.
This all came as the U.S. went into government-mandated lockdown and the economy contracted 3.5% — the worst since 1946. Tens of millions of jobs were lost, leading to nearly 15% unemployment in the spring of 2020.
According to the AP, estates and foundations led the increased giving as they saw more people facing greater needs and concerns, spurred on by the pandemic and racial justice protests.
Amir Pasic, the dean of the Lilly Family School of Philanthropy at Indiana University, which researched and wrote the 2021 report, said in a statement, “In some ways, 2020 is a story of uneven impact and uneven recovery,” the AP reported.
“Many wealthier households were more insulated from the effects of COVID-19 and the ensuing economic shock,” he added, “and they may have had greater capacity to give charitably than households and communities that were disproportionately affected and struggled financially.”
Despite the bad name given to America’s wealthy, it was the rich who really contributed to the spike in giving to educational nonprofits and other charities. However, it wasn’t just the wealthy who increased their giving: The study’s examination of surveys and tax data for 128 million U.S. households showed that small donors, too, “stepped up to meet the increased needs brought forth by the economic crisis, racial unrest and a global pandemic,” the AP said. However, giving from corporations was down.
More from the AP:
Giving by individuals, which made up a majority of the donations last year, rose by approximately 2%. The biggest uptick came from foundations, who, in total, increased their giving by 17% for an estimated $88.5 billion in contributions. Those donations made up about 19% of the total share of contributions, the largest that has ever come from foundations.
The spike in giving was coupled with changes many foundations adapted in the early days of the pandemic to provide more flexibility to grantees in their pandemic response. The changes included loosening restrictions on how to use prior and new donations, but how long that will continue, if at all, remains unclear.
By contrast, companies gave about 6% less in 2020 than they did in 2019, the report said. Experts note giving by corporations is closely tied to GDP and pre-tax profits, which both declined last year.
Religious and educational groups, churches, foundations, human services, international affairs, and public-society benefit organizations saw an uptick. But the groups getting the most money had a focus on civil rights and the environment the New York Times reported.
Giving to health care groups and arts and culture organizations actually fell — largely because those operations rely significantly on in-person events and fundraisers that were routinely canceled during the pandemic.
Will the giving trend continue? Giving USA Foundation Chair Laura MacDonald is hopeful — but also realistic.
“As an optimist, I’d like to believe that Americans’ generosity will continue to grow,” MacDonald said, the AP reported. “But as a realist, I understand that giving responds to larger economic forces. In 2021, we may also realize the benefits of engaging donors through galas and events, personal visits, and in-person experiences.”