Alexander Haas Fundraising Counsel: Total Philanthropic Giving Remained Strong in 2021, at $484.85 billion

The Annual Report on Philanthropy for the Year 2021, released on June 21, 2022, reports that individuals, bequests, foundations, and corporations gave an estimated $484.85 billion to U.S. charities in 2021. Total charitable giving in 2021 grew 4.0% over the revised total of $466.23 billion contributed in 2020. However, while giving increased in current dollars, it declined (-0.7%) after adjusting for inflation.  In addition, it was a positive year for national fundraising consulting firms as well.

David King, President & CEO of Alexander Haas, will present the details of the report today at a meeting sponsored in partnership with AFP Greater Atlanta Chapter, to be attended by the Atlanta-area fundraising community.

“What we are seeing in this report is a mixed bag of good and bad news. One the one hand, giving reached its all-time high in 2021, but the flip side of that is, because of inflation levels that we have not seen in decades, that record amount of money had less purchasing power,” says King.

“So even in a record year for giving, the nonprofit sector finds itself with fewer resources. This mirrors what many people have experienced personally as they saw gains in income levels wiped away by significant price increases,” he says.

Giving by individuals continued to be the largest sector of giving with an estimated $326.87 billion, rising 4.9% (staying flat at 0.2%, adjusted for inflation). This sector comprised less than 70% of total giving for the fourth time on record, and for the fourth consecutive year. Mega gifts ($450 million+) by some of the wealthiest Americans reached a total of nearly $15 billion in 2021, representing about 5% of all individual giving in 2021, and played an important role in lifting individual giving.

Several subsectors that struggled in 2020, experienced a rebound in 2021: giving to the health, the arts, and yes even religion. Giving to religion grew by 5.4% (flat at 0.7% adjusted for inflation). Giving to health is estimated to have grown by 7.7%. And giving to the arts is estimated to have increased 27.5%.

“The resurgence of giving to arts and culture is a pleasant result. These organizations suffered mightily in 2020 when they were forced to close, which resulted in a double whammy of lost contributed income and lost earned income from admissions and ticket sales. These are largely experience-based organizations, where being “there” is the service they provide,” King says.

“Our museums, theatres, musical venues were all shuttered for over a year, so it is easy to see why there were hit with a decline in 2020, it was an out of site out of mind situation. It’s important that donors returned to these organization in 2021 with significant philanthropy once they were able to resume programming, as well as increasing the utilization of fundraising campaign services.”

However, several subsectors that experienced strong growth in 2020, did not fare as well in 2021. For instance, gifting to education is estimated to have declined 2.8% (-7.2% adjusted for inflation). Giving to human service organizations increased 2.2%, but declined -2.4%, adjusted for inflation.

David King, “I think to understand some of this you must look past the numbers to the environment of 2021. I think this is particularly true for giving to education. Giving to education fell in 2021 for the first time since 2013. I think this is reflective of a widespread dissatisfaction with how educational institutions responded to the pandemic. To be fair, educational institutions were truly in a no-win situation. Whether they returned to in-person learning or continued virtual, or whether they maintained or lifted mask mandates, either decision was going to meet with disapproval from a significant number of their constituents. I think many people may have expressed that dissatisfaction by withholding contributions,” King surmises.

The stock market and GDP recovered to pre-pandemic levels early in 2021 and continued to grow throughout the year. The S&P 500 grew 26.9% (21.2% adjusted for inflation) and the GDP grew 10.1% (5.1% adjusted for inflation), creating strong conditions for charitable giving.

“What concerns me now is how 2022 is going. We are already seeing over 8% inflation this year, with much higher rates than that in the energy and food sectors, which are items every single person and organization must have. Higher costs on those items eats into discretionary income in a very real and immediate way, which can translate into less discretionary income available for charitable contributions,” King cautions.

“If 2022 continues to see inflation at this rate, or higher, and steep stock market declines, I don’t see any way that giving will be able to keep up. I think 20202 could be a struggle as prices increase while philanthropy remains flat or declines again,” he said.

About Alexander Haas Fundraising Counsel

Alexander Haas, a national fundraising consulting firm headquartered in Atlanta, Georgia, works with nonprofit organizations of all sizes and shapes including higher education, museums, schools, performing arts, human services, hospitals and churches and religious congregations. For more than 30 years, Alexander Haas has partnered with thousands of organizations and institutions to advance their missions through enhanced fundraising services.