Never has so much angst and anxiety been caused by so much money.
Causing the consternation is the recent Giving USA report announcing that nearly half a trillion dollars were donated in 2022. Despite this staggering total, ominous headlines noted that charitable giving in 2022 had declined for just the fourth time in 40 years while experiencing one of the largest setbacks in history.
The data behind the delirium: Giving USA revealed $499 billion of charitable giving in 2022. The annual amount is 3 percent lower than the previous year’s total (in current dollars, the value of the dollar in the year donated), and a reduction of nearly 11 percent after adjusting for inflation.
The negative results mirrored similar news reported earlier in the year by the Fundraising Effectiveness Project (FEP). Thoughtful analysis conducted by FEP revealed a decline in both donors and donated dollars in the fourth quarter of 2022 compared with the same quarter a year earlier.
Down is down, and rose-colored glasses will not help nonprofits see a clearer, brighter future. The latest data on charitable giving provide an important reminder to tend to fundraising fundamentals. Organizational readiness for fundraising; a comprehensive fundraising plan; 100 percent board giving; an updated and compelling fundraising case for support – employing techniques that are time-tested as well as cutting-edge.
However. We also can keep the latest data on charitable giving in context if we look beyond annual comparisons. First, the decline in 2022 was from a record year. Revised Giving USA data discovered that $516 billion were donated in 2021. That total was higher than the previous record, established in the previous year. Therefore, charitable donations in 2022 were down when compared with the two best years in the recorded history of charitable giving.
In data analysis, 2020 and 2021 are known as outliers. The culture might call them unicorns.
Several reasons are apparent: the generous outpouring of financial donations in response to the COVID-19 pandemic; charitable contributions energizing the movement toward social and racial justice; and everyday people donating their $300 COVID checks and receiving a universal charitable tax deduction in return.
While the pursuit of social and racial justice is never-ending, the worst of the pandemic is over. So are the COVID subsidies and the universal charitable tax deduction.
Second, when adjusted for inflation, the results in 2022 are similar to the results from 2019. Remember 2019? The economy was relatively healthy, and fundraising was enjoying three consecutive years of relatively stable charitable giving.
Interestingly, and perhaps not coincidentally, the same analysis is true of the FEP data. The data on donors and dollars for the fourth quarter of 2022 are similar to the data for the fourth quarter of 2019.
Therefore, Giving USA 2023 reveals that fundraising has returned to a “new normal.” The hard work of donor identification, cultivation, solicitation, and stewardship continues. The cause that you serve, the people who benefit, and the communities that are strengthened are counting on you to do so.
Bill Stanczykiewicz, Ed.D., is director and Rosso Fellow of The Fund Raising School within the Indiana University Lilly Family School of Philanthropy.
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