Giving USA Findings Show Contributions Reached a New High but Did Not Outpace Inflation
In 2023, the philanthropic landscape witnessed a remarkable resilience and recovery, as individuals, bequests, foundations and corporations collectively contributed an estimated $557.16 billion to U.S. charities, according to the Giving USA 2024 report. This figure represents a 1.9% growth in current dollars, setting a new record high by that measure. However, when adjusted for the higher-than-average inflation rate of 4.1%, giving declined by 2.1%, indicating the growth in total giving did not outpace the rising cost of living.
Despite the challenges posed by inflation, the nonprofit sector demonstrated its enduring strength, with total giving remaining above pre-pandemic levels (accounting for inflation). The COVID-19 pandemic significantly disrupted nonprofits’ operations, increasing demand and creating new types of constituent needs, making this sustained level of giving all the more remarkable.
After the tumultuous year of 2022, the growth in total giving in 2023 may indicate positive signs for the nonprofit sector. While total giving has not yet surpassed the all-time inflation-adjusted high set in 2021, the resilience and recovery demonstrated in 2023 offer hope for continued growth and support for the vital work of charitable organizations. Total giving as a share of GDP was up notably from 1.94% in 2022 to 1.99% in 2023.
As we noted in last year’s charitable giving trends report, philanthropic freedom matters because it enables swift and effective responses to urgent needs, fosters innovation and flexibility, empowers individuals to target their resources effectively and promotes collaboration and collective action. By recognizing and preserving philanthropic freedom, we can harness the power of generosity and make a significant difference addressing the challenges faced by our communities.
Driving Forces Behind Giving in 2023
The nominal growth in total giving in 2023 was buoyed by the better-than-expected performance of the stock market (24% growth in S&P 500) and GDP (3.1% growth in real GDP), which supported giving by corporations, foundations and individuals. Additionally, the rise in personal income (after being negative in 2022) and consumer spending contributed to the increase in individual giving.
All four sources of giving – individuals, bequests, foundations and corporations – experienced growth in current dollars but remained flat or declined when adjusted for inflation. Notably, giving by foundations and corporations posted positive two-year growth, even after accounting for inflation.
“We saw promising economic growth in 2023. Giving USA historical data shows the role that economic and financial conditions play in shaping giving for individuals, foundations and corporations,” said Una Osili, Ph.D., associate dean for research and international programs at the Indiana University Lilly Family School of Philanthropy. “For the second year in a row, grantmaking by foundations crossed over the $100 billion mark.”
Measured in current dollars, giving grew across all nine categories of nonprofits that receive charitable contributions. However, when adjusted for inflation, only seven of the nine subsectors saw growth, while giving to religion and international affairs declined by 1.0% and 1.6%, respectively.
A Promising Outlook
In 2022 and 2023, giving trends underscore the critical interplay between philanthropic freedom and economic freedom, especially amid persistently high inflation. As challenging economic conditions impact individuals and institutions, philanthropic freedom becomes essential. It allows donors to channel their resources toward causes they are passionate about, making a tangible difference even in tough times. Concurrently, economic freedom creates the conditions for individuals and organizations to continue actively supporting positive social change.
As the philanthropic landscape continues to evolve, it is essential to recognize the integral role of economic and financial conditions in shaping giving patterns. The Giving USA report serves as a reminder of the enduring commitment of individuals, bequests, foundations and corporations to supporting causes that drive positive change in our communities, even in the face of economic adversity.
