U.S. Charitable Giving Projected to Grow in 2020 and 2021

A report released last week projects solid growth for U.S. charitable giving in 2020 and 2021.

Giving will grow by 4.8% this year and by 5.1% next year, according to the report researched and written by the Indiana University Lilly Family School of Philanthropy and presented by strategic fundraising consultant Marts & Lundy.

"If the U.S. economy continues to be strong, we expect that charitable giving will also follow this trend, even recognizing that there may be more uncertainty in the global economy," Una Osili, the school's associate dean for research and international programs, said in a statement.

Uncertainty there is. Witness the global spread of Covid-19.

Researchers produced the philanthropy outlook estimates by using recent economic data and analysis that considered factors that would affect charitable giving, according to the report.

They developed projections for total giving, and giving by source and to three types of recipient nonprofits, and described how different economic variables and other factors will affect giving in 2020 and 2021. They also examined the environment for philanthropy and long-term trends that may have an effect on giving.

Donors and Recipients

"The estimates for this year and next year anticipate solid growth in most sources of giving," Osili said.

The analysis showed that giving by individuals was projected to increase by 4.4% in 2020 and 4.7% in 2021, only slightly below the rate of growth for total giving.

Giving by foundations and estates is expected to be robust for the next two years, contributing to the anticipated healthy growth in overall giving. Foundation giving will grow by 6.3% and 6.6%, and estate giving by 6.6% and 6.5%.

In contrast, growth in giving by corporations is expected to be a much slower 0.4% in 2020 and 1.4% in 2021.

The philanthropy outlook also produced estimates for recipient nonprofit organizations:

Education: 5.1% in 2020 and 5.5% in 2021
Health: 7.9% in 2020 and 7.3% in 2021
Public-society benefit organizations: 5.1% in 2020 and 5% in 2021

'Stress Test'

The report said that in recent years, the philanthropy outlook report has provided additional insights to help inform professional practice.

The new edition presents a "stress test" for 2020 and 2021, using characteristics similar to those experienced during the 2007–09 recession, to see how charitable giving would change as compared with the philanthropy outlook 2020 and 2021 results.

It said the point was not to predict the likelihood, length or severity of a potential recession, but to give nonprofits and fundraisers an opportunity to consider how their organizations might fare under severely adverse conditions, and to identify areas to strengthen and improve for long-term stability, enabling them to plan ahead for possible future downturns while economic times are good.