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- Americans gave less of their incomes to charity in 2022 than they have in nearly three decades.
- It’s part of the decades-long trend in which Americans have scaled back their charitable giving.
- Experts disagree on what is behind the trend.
Americans just aren’t giving to charity like they used to — and no one is quite sure why.
In 2022, Americans gave 1.7% of their personal disposable incomes to charity, the lowest level since 1995, according to the annual Giving USA report based on research conducted by Indiana University’s School of Philanthropy.
For only the fourth time in 40 years, total US charitable donations declined compared to the prior year, falling 3.4% to roughly $500 billion dollars — a 10.5% decline when adjusted for inflation.
Over the past decades, however, inflation-adjusted total giving has risen steadily, among the reasons the decline in 2022 could be a blip — one driven by inflation, a falling stock market and a comedown after the record-setting giving seen during the pandemic.
But the slowdown in individual giving is a longer-term trend.
In 2018, just 49.6% of US households gave money to charity, according to an Indiana University study, compared to 66.2% in 2000. The portion of disposable income given to charity rose in the late 1990’s and early 2000’s, reaching 2.4% in 2005, the highest level recorded since 1982. But since 2008, giving hasn’t exceeded 2.0%.
Less individual giving coupled with strong growth in total giving suggests a smaller pool of wealthy donors have a growing influence on today’s charity landscape, Josh Birkholz, chairman of the Giving USA Foundation, told Insider.
“We’ve seen in the last few decades, the number of everyday donors just keeps declining and the numbers keep going up because the wealthy donors are giving more,” he said.
Insider spoke with Birkholz, whose organization publishes the annual report on US charitable donations, to examine the different theories behind the key question: Why have many Americans stopped giving?
Economic factors have taken a toll on charitable giving
While the dropoff in individual giving started before the Great Recession, the economic downturn had a clear impact on charitable donations.
But even once Americans’ finances began to recover, they continued to be less likely to give to charity than they used to be, Texas A&M researchers found in a 2016 paper.
“It could be that the uncertainty from the recession has had a lingering effect. Giving tends to be habit-forming,” the paper’s lead researcher Jonathan Meer told The Atlantic, adding that Americans were conservative in their spending long after the Great Depression ended.
As the Great Recession took its toll on Americans, many charities began pivoting to appeal to the wealthier donor, Birkholz said — something he thinks may also have had a lasting effect.
“It was kind of self-fulfilling by the charitable sector,” he said. “We saw that the wealthy people were still giving. So then we started to build programs more geared towards attracting the wealthy donor. It’s more cost-effective to ask one person for $100,000 than to ask 1,000 people to give $100. It’s a cheaper gift. So we focused our structures more towards the top.”
More than a decade removed from the Great Recession, today’s economy offers its own challenges. In 2022, inflation constrained Americans’ finances, and the S&P 500 fell nearly 20%.
“If you give $100 a year to the local animal shelter, no one thought, ‘I should give $108 this year because of 8% inflation, but that’s an 8% decline,'” Birkholz said.
Particularly when money is tight, many individuals may question whether their donation will really have any impact, Birkholz, added. When giving isn’t a habit, it can be challenging to get past these doubts.
Americans have ditched religion and the giving habits that accompany it
In 1972, 5% of Americans identified as religiously unaffiliated, according to Pew Research. But this figure grew to roughly 15% by 2000 and 29% as of 2021.
There’s evidence that this shift has impacted charitable giving.
In 2017, Indiana University researchers found that 62% of religious households gave to charity, compared to 46% of those with no religious affiliation. It also concluded that religious households “give as much or more to other types of charities as non-religiously affiliated households do.”
The Americans who ditched religion didn’t simply shift their donations to secular causes either. From 2000 to 2016, the share of Americans giving to religious causes fell from roughly 47% to 32%. Over the same period, giving to secular causes fell from 55% to 44%.
Some experts argue that charitable giving is an inherently religious value, Birkholz said, while others point to the concept of “modeled philanthropy.” Children who saw their parents donating regularly at religious services, for instance, may have eventually internalized the practice.
“Basically people were in the proverbial church and there was an offering plate. These kids saw their parents give four times a month. So it was just one visualization where they saw giving modeled in a way that they would’ve noticed.”
Americans are still giving — just in different ways
A 2022 Independent Sector survey of over 3,000 US adults found that 57% of Gen Zers — four percentage points higher than the survey average — said giving directly to individuals and causes makes a larger impact than donating to nonprofits.
Online crowdfunding campaigns have risen in popularity in recent years, and these donations would not be reflected in Giving USA’s report. Other donors have shifted their giving to political causes that wouldn’t be classified as charitable giving either.
“Maybe generosity is just moving in different ways,” Birkholz said. “GoFundMe, taking care of people directly and other ways that aren’t measured the same way.”
Many Americans have lost confidence in US institutions. It’s possible this is happening to the charity sector as well.
Looking forward, Birkholz said he’s optimistic the total giving figure will bounce back in 2023. But he expects it to be the wealthy — not a significant uptick in individual donors — that drives the rebound.
“Unless we see something really go the other way in the economy, I feel like it’s going to go up next year,” he said. “I’m not personally concerned about the total dollars of giving. But I am a little concerned about the decline in people that participate in giving and whether that’s a broader cultural conversation to be had.”
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