Early indicators show that charitable giving was up in 2020 in response to the coronavirus pandemic. Projections for giving in 2021 and 2022 are even rosier.
Charitable giving is expected to increase 4.1% this year, buoyed by individual giving (+6%), and another 5.7% in 2022 on the strength of increased giving via foundations (+8.8%) and estates (+11.9%).
On this episode of the Fresh Research podcast, Una Osili, Ph.D. joins us to break down the projections from the Lilly Family School of Philanthropy at IUPUI in Indianapolis, Ind. She is associate dean for research and international programs and a professor of economics and philanthropic studies at the Lilly Family School of Philanthropy. She’s also a dean’s fellow at the Mays Family Institute on Diverse Philanthropy.
The Lilly School partners with the University of Pennsylvania Wharton School of Business, which provides data using the Penn Wharton Budget Model for select economic variables used in producing the estimates.
Growth rates are based on predictions for giving in inflation-adjusted 2019 dollars using 2020 as the base year. Projections are a “best-case scenario,” if Gross Domestic Product (GDP) recovers in 2021 as is expected by the Congressional Budget Office (CBO) and others.
“In terms of overall growth in philanthropy, we do have to be concerned that underlying models show recovery but that recovery certainly is not expected to be broad based,” Osili said. “Some sectors of the economy are recovering faster than others, and some households have been more affected by the pandemic, not just their health conditions but also their incomes, their wealth, their ability to access employment,” she said.
“This is the extension of the K-shaped recovery we heard a lot about in 2020 where some American workers are able to work from home, work remotely, and their incomes, their wealth, if not grown, have at least stayed relatively stable through 2020-2021,” Osili said.