New Study Predicts Increases in Charitable Giving in Each of Next Two Years
Total U.S. charitable giving is projected to grow by 4.8 percent this year and by 5.1 percent in 2021, according to The Philanthropy Outlook 2020 & 2021 released today.
The report is researched and written by the Indiana University Lilly Family School of Philanthropy at IUPUI and presented by Marts & Lundy, a leading strategic fundraising consulting firm.
“Our research indicates that if U.S. economic growth remains steady, 2020 and 2021 are likely to be good years for charitable giving overall. The estimates for this year and next year anticipate solid growth in most sources of giving,” said Una Osili, Ph.D., an economist who is associate dean for research and international programs at the Lilly Family School of Philanthropy. “If the U.S. economy continues to be strong, we expect that charitable giving will also follow this trend, even recognizing that there may be more uncertainty in the global economy.”
The Philanthropy Outlook estimates are produced using recent economic data and rigorous analysis that takes into account factors that will affect charitable giving. The outlook develops projections for total giving, giving by source and giving to three types of recipient nonprofits (education, health and public-society benefit organizations) and describes how different economic variables and other factors will impact giving in 2020 and 2021. The report examines the environment for philanthropy and long-term trends that may have an impact on giving.
“Philanthropy, as we’ve come to know it, is shifting. Nonprofit leaders and donors alike need tools to understand what is happening, and how to adjust.” Said Phil Hills, president & CEO, senior consultant & principal of Marts & Lundy. “The Philanthropy Outlook’s projections provide a framework for an examination of issues we know influence giving and brings us closer to untangling what continues to be the most complex years in recent memory.”
The study’s key findings include:
- Total charitable giving is projected to grow (4.8 percent in 2020 and 5.1 percent in 2021).
- Giving by individuals is projected to have solid growth of 4.4 percent in 2020 and 4.7 percent in 2021, only slightly below the rate of growth for total giving.
- Giving by foundations (6.3 percent in 2020 and 6.6 percent in 2021) and giving by estates (6.6 percent in 2020 and 6.5 percent in 2021) are expected to post strong growth for the next two years and contribute to the anticipated healthy growth in overall giving.
- Giving by corporations is expected to be more tepid (0.4 percent in 2020 and by 1.4 percent in 2021).
- The Philanthropy Outlook also produces estimates for education, health, and public-society benefit organizations. Robust growth is estimated for education (5.1 percent in 2020 and 5.5 percent in 2021), health (7.9 percent in 2020 and 7.3 percent in 2021), and public-society benefit organizations (5.1 percent in 2020 and 5.0 percent in 2021).
Donors, fundraising professionals and policy makers need rigorous data and reliable information to help them plan for the future, such as that provided by The Philanthropy Outlook. In recent years, The Philanthropy Outlook report also has provided additional insights that help inform professional practice.
This edition of the report presents a “stress test” for 2020 and 2021, using characteristics similar to those experienced during the Great Recession of 2007-09, to see how charitable giving would change as compared with The Philanthropy Outlook 2020 & 2021 results. The point of the stress test is not to predict the likelihood, length, or severity of a potential recession--rather, much like the Dodd-Frank Act Stress Test (DFAST) for banks, The Philanthropy Outlook stress test analysis gives nonprofits and fundraisers an opportunity to consider how their organizations might fare under severely adverse conditions, and to identify areas to strengthen and improve for long-term stability, enabling them to plan ahead for possible future downturns while economic times are good.
The full report is available at philanthropyoutlook.com.
The preceding article was based on a media release and information distributed by the Indiana University Lilly Family School of Philanthropy and strategic fundraising consulting firm, Marts & Lundy.