According to Giving USA 2023: The Annual Report on Philanthropy for the Year 2022, a publication of Giving USA Foundation, 2023, researched and written by the Indiana University Lilly Family School of Philanthropy, total charitable giving fell in 2022 for only the third time in the last 40 years. Charitable giving was strong during the pandemic years, breaking the $500 billion mark for the first time in 2021. But in 2022, the total fell to $499.33 billion.
Key drivers of the decline in charitable giving likely include:
- a 40-year high in inflation, at 8%, putting the squeeze on family budgets;
- a 19.4% drop in the S&P 500, the first double- digit decrease since the 2008 Great Recession;
- declines in the stock market toward the end of the year, when many charitable gifts are made; and
- growth in personal income was down 0.1%, or down 7.5% after inflation.
Charitable gifts from individuals account for more than 60% of total giving, as follows:
- Individuals gave $319.04 billion, down 6.4%;
- Foundations gave $105.21 billion, up 2.5%;
- Bequests totaled $45.60 billion, up 2.3%; and
- Corporations gave 29.48 billion, up 3.4%.
There were slight changes in the targets for charitable giving.
- Religion, up 5.2% to $143.57 billion;
- Human services, down 0.6% to $71.98 billion;
- Education, down 3.6% to $70.07 billion;
- Health, up 5.1% to $51.08 billion;
- Public-society benefit, down 8.4% to $46.86 billion;
- International affairs, up 10.9% to $33.71 billion;
- Arts, culture and humanities, up 2.9% to $24.67 billion; and
- Environmental and animal organizations, down 1.6% to $16.10 billion.
There was some concern in 2017 that two of the tax reforms that year might have a negative effect on charitable giving. The rough doubling of the standard deduction meant far fewer taxpayers were itemizing their deductions, and they would get no tax benefit from their charitable gifts. The doubling of the amount exempt from federal estate tax was feared to have a similar effect. The fact that bequests are still growing, and that individual giving rose strongly in 2020 and 2021, suggests that the concerns may have been unjustified.
© 2023 M.A. Co.