American charitable giving up 4% in 2021, but is flat when inflation is included

Americans gave an estimated $484.85 billion to U.S. charities in 2021, a 4% increase over 2020, the new Giving USA report revealed Tuesday morning.

Adjusted for inflation, however, overall giving remained flat, researchers at the Indiana University Lilly Family School of Philanthropy found.

Giving to religious institutions, estimated at $135.78 billion, topped the list of recipients in 2021, the report indicated, although that number was “flat” at a 0.7% gain when adjusted for inflation.

Educational giving dropped 2.8% to $70.79 billion, the researchers said, while giving to groups involved in international affairs organizations remained flat at $27.44 billion.

Six other categories of charity saw increases in donations during 2021, the Giving USA study indicated: human services; foundations; health; public-society benefit organizations; arts, culture and humanities groups; and charities involved in environmental and animal welfare.

“In 2021, Americans continued giving more generously than before the pandemic. However, the growth in giving did not keep pace with inflation, causing challenges for many nonprofits,” said Laura MacDonald, chair of Giving USA Foundation.

“In 2021, many donors returned to their favored causes, with many of the sectors that struggled in 2020 making a recovery in 2021,” she said.

As far as the sources of charitable donations is concerned, the biggest share came from individuals, estimated at $326.87 billion.

That was a 4.9% increase in nominal dollars, the report indicated, but when adjusted for inflation, the figure remained “flat” at a 0.2% gain.

Second in importance was foundation giving, estimated at $90.88 billion, representing 19% of total giving in 2021, which the group said was the “largest share on record” for the sector.

Bequests declined by 7.3% in 2021, although it was still the third-largest sector of charitable giving at $46.01 billion.

And corporate giving rose by an estimated 23.8% to $21.08 billion.

While such giving represented 0.7% of pre-tax corporate profits, the group said, researchers credited “a strong GDP and a good year” for those profits as fueling the “strong growth” in corporate giving.

One subcategory that saw a strong response, the study revealed, was in “megagifts” of $450 million or more. Such gifts represented “about 5% of all individual giving” last year, the Giving USA report said.

The researchers indicated that the strong charitable-giving performance of 2021 might not continue this year and beyond.

“The broader effects of the pandemic may have shifted individual jobs, incomes, lifestyles and family and financial priorities, potentially affecting their giving habits,” said Amir Pasic, the Eugene R. Tempel Dean of the Lilly Family School of Philanthropy.

“The novel circumstances of the current giving landscape underscore the need for this report and other high-quality research, which help us understand how widespread these changes are and how they are affecting philanthropy,” Mr. Pasic said.

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