The Giving USA report says donations in 2021 were 4% higher than the record-setting $466 billion contributed in 2020. But they were down 0.7% when adjusted for inflation.
Many nonprofits are now feeling the strain because giving is not growing as fast as price increases, said Laura MacDonald, chair of the Giving USA Foundation. In response to the intense needs of the early COVID-19 pandemic, as well as the calls for racial justice, giving increased in unusual ways in 2020, but has generally returned to previous patterns.
“In 2021, many donors returned to their favored causes, with many of the sectors that struggled in 2020 making a recovery in 2021,” MacDonald said in a statement.
The proportion of giving by individuals totaled less than 70% of overall giving for the fourth year in a row in 2021 and the report found that giving from individuals was essentially flat in 2021 when accounting for inflation, up 4.9% to $327 billion. That's still not near the peak of 2017 when individuals donated about $342 billion when adjusted for inflation.
“Everyday households are not participating in charitable giving to the extent that they did a decade or two ago," MacDonald said in an interview. "And that’s concerning. That’s troubling.”
She noted some large donors have transitioned to giving through donor-advised funds, a type of charitable investment account, or family foundations and those donations would be counted in other categories.
Giving to arts and culture groups, which suffered during the pandemic, climbed 27.5% in 2021 to more than $23.5 billion. Conversely, giving to education declined 2.8% to $71 billion. It had spiked in 2020 in part because of donations related to vaccines which went to university affiliated hospitals and research.
“The environment for giving is evolving in multiple ways,” said Amir Pasic,dean of Indiana University’s Lilly Family School of Philanthropy, which researched and wrote the report published by the Giving USA Foundation. “Robust economic growth translated to strong performance by institutional forms of philanthropy such as foundations and corporations."
Corporate giving also raised questions. Though it increased 23.8% to $21 billion in 2021, that was during a banner year for corporate profits, which were up 37% before taxes. The report says corporate giving still represents less than 1% of corporate pre-tax profits.
However, the report finds that donations are generally strong. Giving grew or stayed flat in eight of the nine major philanthropic sectors, with only education declining.