The coronavirus pandemic (COVID-19), donor-advised funds, and MacKenzie Scott. All three had an impact on charitable giving in 2020, which reached a record $471.44 billion.
Total charitable giving grew 5.1% measured in current dollars over the revised total of $448.66 billion contributed in 2019, according to Giving USA 2021: The Annual Report on Philanthropy for the Year 2020, released today. Adjusted for inflation, total giving increased 3.8%. It came in at 2.3% of Gross Domestic Product (GDP).
Giving USA is the longest-running report on the sources and uses of charitable giving in America. It is published by Giving USA Foundation, a public service initiative of The Giving Institute, and researched and written by authors at the Indiana University Lilly Family School of Philanthropy at IUPUI.
Three of the four sources of charitable giving grew during 2020, with foundations leading the way:
Meanwhile, giving to seven of the nine major types of recipient charitable organizations grew in 2020, including double-digit growth in almost three areas:
“Unprecedented developments in 2020 including the global pandemic, the ensuing economic crisis, and efforts to advance racial justice created intense, widespread need and significantly increased the demand upon nonprofit organizations. Remarkably, generous giving coupled with the stock market turnaround in the final months of the year boosted contributions. As a result, 2020 is the highest year of charitable giving on record,” said Laura MacDonald, CFRE, chair of Giving USA Foundation and principal and founder of Benefactor Group. “Amid these unique circumstances, however, the nation’s overall economic picture remained mixed. It is important to recognize that the picture for individual households and organizations may have looked quite different, with many facing hardship even though total giving posted strong growth.”
Public-society benefit organizations include national donor-advised funds (DAFs) — which continue to receive record contributions and make record distributions — United Ways and civil rights organizations. United Ways around the country launched COVID-19 response funds that raised millions and dozens of affiliates received transformative gifts as part of nearly $6 billion in gifts to 500 organizations by Scott, a philanthropist and author whose fortune came from her divorce from Amazon founder Jeff Bezos. Scott’s largesse also impacted giving to education, with hundreds of millions of dollars to Historically Black Colleges and Universities (HBCUs), tribal colleges, Hispanic-serving institutions and community colleges.
As for sectors that saw giving decline, obviously, it was pandemic related as well. Restrictions on large gatherings effectively eliminated or severely reduced attendance to houses of worship, impacting giving to religion. Arts organizations and venues saw most or all of their programming seasons eliminated or shift online, dramatically reducing revenues and giving. Giving to health likely declined as a result of hospitals and disease-specific organizations that saw in-person walks, runs and fundraising events wiped out by the pandemic last year.
“Though giving in 2020 followed some known patterns for recessionary years, such as increases in basic needs giving and decreases to the arts, there were additional factors at play in 2020. For instance, giving to religion is typically least impacted by economic shifts, but it’s possible that other factors, such as the pandemic shutdown that prevented in-person services from occurring, may have had an impact on some organizations,” said Patrick M. Rooney, Ph.D., executive associate dean for academic programs at the Lilly Family School of Philanthropy. “There also may have been a digital divide in 2020 between nonprofits that were able to pivot their fundraising and services to online and those that were more severely limited by the effects of the pandemic.”
Giving to individuals is estimated to have grown 12.8% (11.5% in inflation-adjusted dollars) between 2019 and 2020, to $16.22 billion. The bulk of these donations are in-kind gifts of medications to patients in need, made through the patient assistance programs of pharmaceutical companies’ operating foundations.
Unallocated giving was negative $22.13 billion in 2020. This amount can be considered as the difference between giving by source and use in a particular year, according to Giving USA. The amount includes the difference between itemized deductions by individuals (and households) carried over from previous years. The tax year in which a gift is claimed by the donor (carried over) and the year when the recipient organization reports it as revenue (the year in which it is received) may be different.
“In some ways, 2020 is a story of uneven impact and uneven recovery. Many wealthier households were more insulated from the effects of COVID-19 and the ensuing economic shock, and they may have had greater capacity to give charitably than households and communities that were disproportionately affected and struggled financially,” said Amir Pasic, Ph.D., the Eugene R. Tempel Dean of the Lilly Family School of Philanthropy.
“Similarly, growth in the S&P 500 in recent years and the market recovery in 2020 positioned foundations to respond to the year’s challenges, with the result that giving by foundations reached its largest-ever share of total giving, at 19 percent. Still, for many people and communities, the need remained great throughout the year and beyond,” he said.
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