Giving USA: Charitable Giving Can’t Keep Pace With Inflation

By Amanda L. Cole

Charitable giving in the U.S. regained ground after a down year in 2022, the Giving USA Foundation announced today as it released its annual report that measures the previous year’s donation totals.

For 2023, donations increased to $557.16 billion — a 1.9% increase over 2022, according to “Giving USA 2024: The Annual Report on Philanthropy for the Year 2023,” which the Giving USA Foundation publishes with writing and research support from the Indiana University Lilly Family School of Philanthropy. Originally, 2022 amassed $499.33 in total giving, but, with additional data included since last year’s report, that figure has been updated to $546.61, which means 2023 is the third straight year of more than $500 billion in giving.

Donation Sources

As wealthier donors are known to resume their philanthropic ways when the economy improves, 2023’s results show an improvement in giving.

“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.

However, once adjusted for 4.1% inflation, 2023’s total equates to a 2.1% year-over-year decline. Here’s a closer look at each donation source and how adjusting for inflation affected their success.

Individuals

Individuals gave $374.4 billion, which improved 1.6% over 2022. However, individual giving dropped 2.4% when total dollars donated are adjusted for inflation. Though individual giving is often seen as a declining portion of overall giving, it remained flat from 2022 to 2023 at 67% of total giving. However, it did drop below 2% of individuals’ disposable income last year.

This chart shows where generosity came from. The majority came from individuals. | Credit: Giving USA by “Giving USA 2024: The Annual Report on Philanthropy for the Year 2023”

Foundations

For the second straight year, foundations crossed $100 billion in grantmaking, Osili said. The $103.53 billion from foundations for 2023 is the result of strong market growth that has led to increased grantmaking over the past five years.

Foundations comprise 19% of total giving, but the 1.7% growth in current dollars reverses to a 2.3% decrease when adjusted for inflation.

“Among the recipients of giving, we see the strongest growth among grantmaking organizations: giving to foundations and to public-society benefit organizations that include national donor-advised funds,” said Wendy McGrady, vice chair of Giving USA Foundation, and executive vice president and chief operating officer of The Curtis Group. “Giving to these areas is also well above pre-pandemic levels, indicating that the wealthy donors who tend to give to grantmaking organizations continue to invest in the future of the nonprofit sector.”

Bequests

Accounting for $42.68 billion, bequests made up 8% of giving in 2023. With the Great Wealth Transfer underway, that movement could be a large part of the 4.8% year-over-year increase. Bequests, however, remained flat when accounting for inflation.

Corporations

Corporate giving rose 3% to $36.55 in 2023. Comprising 7% of total giving, it fell 1.1% when adjusting for inflation and remained steady at 1%of pre-tax corporate profits.

Future of Philanthropy

With the economic outlook on the rise, Indiana University Lilly Family School of Philanthropy predicted growth in philanthropy in 2024 and 2025 in a recent study. The 1.9% growth experienced last year matches the average over the past decade, but the uptick in giving predicted for this and next year is 4.2% and 3.9%, respectively. If those predictions prove to be accurate, that could result in steady growth, moving total giving beyond a record $600 billion by 2025 before factoring in inflation.

“Americans increased their giving over the previous year despite the elevated cost of living and headlines warning of a possible recession in 2023,” said Josh Birkholz, chair of Giving USA Foundation and CEO of BWF. “We’re not yet back to the highs of pandemic-era giving, but there are some signs of stability.”