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A First Look at Giving USA’s Report

Curious about how much fundraising, donations, and other aspects of the nonprofit sector have changed since 2021?

We’ve got a special update for you—a sneak peek from Giving USA’s 2021 report. Each year Giving USA (a public service initiative of The Giving Institute) conducts research on the nonprofit sector in the U.S. The full report will be released on July 12th, but they published a preview featuring some of their top-level findings from last year.

In this episode, you’ll hear Kimberly O’Donnell share her biggest takeaways and “aha” moments while helping dissect the data to better inform your nonprofit decisions moving forward.

Bonus Episode Transcript

I’m Kimberly O’Donnell and this is Accidental Fundraiser, the show from Network for Good and Bonterra that shares radically authentic stories from the trenches. And this week we’re coming to you with a special update each year, Giving USA, a public service initiative of the Giving Institute, conducts research on the nonprofit sector in the United States.

The full report will release on July 12th, published a sneak preview, featuring top level findings from their 2021. As the world bounce back from a tumultuous 2020 patterns in philanthropy and donor behavior followed suit. And we wanna share some really, really interesting key takeaways. So in the us overall giving hit nearly 485 billion in 2021.

It rose 4.9% year over year. But if you adjust that for inflation, which we are all feeling the effects of right now, that growth is flat. So when you look at total giving in the us as a pie chart, I want you to think about it in four main segments, one giving by individuals. Two giving by foundations, three, giving by corporations and four giving by bequests and bequests are those types of gifts that are personal property could be money, house jewelry, things like that, that are made through a will or trust.

So as you think about that pie and how it’s broken into those four different segments, Giving by individuals always makes up the largest slice of the pie and it represents nearly 70% of all giving, which is why you’ll hear fundraising, coaches like me tell you and advocate often for organizations to focus on increasing their individual giving efforts.

It makes up. The largest share of the pie in 2021, giving by individuals rose about 2.2%. And then this year it jumped to 4.9%. But if you were to adjust that for inflation, it’d be about flat. What we have seen since the year 2000 has been a consistent decline in the number of donors over the years, but we’ve seen a consistent incline.

Except for those years after the great recession, um, where we had to dip a bit, but we’ve seen it a consistent incline in overall giving from individuals. And so. What we’re always wondering is are these the same donors that are giving and they’re just giving more to charity or are there net new donors and what does all of that look like?

And then, you know, during the pandemic, we saw a wonderful, you know, upswell in giving. And then with the social justice movement, we’ve seen a lot of giving there. Uh, so we’re still trying to figure out, like, what does the, the donor persona, the donor profile look like in the us? And I encourage all of you to think about that too.

Really dive in and, and look at and analyze your donors. Are they new donors, net new donors? Are they. Recurring donors. Are they lapse donors that are coming back to you. So as you try to figure that out, let’s share a little bit about what we know from the fundraising effectiveness project. That’s another great organization it’s called FP and they have some awesome data around donors and giving.

And what they saw through the pandemic is that midsize and larger donor segments have really remained relatively sticky and stable. Throughout the pandemic and represent the majority of dollars raised. And then when you look at the micro donor segment, those who donate less than a hundred dollars, and then what we would call small donors.

Those are those who individuals who give between a hundred, $499. Those two types of donors, micro and small donors are actually shrink. So, as I said, it’s really important to think about the donors that are coming into your doors and then the treatment that you are providing to retain them because donor retention is key.

It costs less to retain a donor than to acquire a new donor. So really dive into your own donor data. Next is giving by foundations, right? Like, so that next piece of the pie is giving by foundations, which is the second largest piece of the pie and represents 91 billion in 2020 giving boomed by 17%. And in 2021, we saw an increase of 3.4%, which would be a slight decrease with inflation.

That said it’s actually very encouraging to see foundation giving at this level because there’s long been an argument that foundations are not giving as much as they truly could to support charity. Instead they’re continuously reinforcing their endowments in conversations that I’ve had with foundations, really I’m hearing a desire to lessen the application and reporting requirements of charities.

So that grant management overall is, is more flexible. In conversations I’ve had with foundations recently, I’m hearing a desire to lessen the application reporting requirements of charities. So that grant management by organizations is just more flexible as well. There’s growing interest in capacity building and diversity equity.

And. Inclusion and belonging initiatives, both of which can better grow and sustain an organization beyond pure program delivery. The third slice of the pie is by bequest and that was around 46 billion in 2021, which was a decrease year over year of 7.3% after. 2020s increase of 10.3%. So this could be due to the economy, or you could look at it as a relatively flat two years.

The last slice of the pie is giving by corporations and that comes in at 21 billion. Now this is juicy stuff. In 2020 giving by corporations was down 6.1%. As many businesses were affected by the pandemic. However, we saw an awesome resurgence of nearly 24% last year adjusted for an inflation. That’s an increase of 18.3% and shows just how important corporate social responsibility CSR.

Is to corporations and how much they want to support charity. So now that you’ve seen the pie in those four areas, let’s slice it a different way. Let’s look at it by the types of charities that are being supported. We’re gonna look into where the giving and goes right to education, health, and human services, animals, and the environment.

And so. Since I’m giving you a very high level snapshot of the giving USA report. I’m gonna share a few of the big ahas that are there, and then I encourage you to dive into the full report whenever it’s released on July 12th. Now the biggest aha for me. Is giving to the arts culture and humanities during the start of the pandemic.

Many of these organizations really struggled with whether they should fundraise at all. I talked to many charities. I even spoke with boards about whether or not they should be fundraising right at the start of the pandemic, because they were not pandemic serving organizations. They weren’t healthcare organizations, they weren’t human services organizations, and they didn’t want to.

Pull money away from those critical needs. Now what I always say and. All of your fundraising, coaches would say to you is don’t stop fundraising. Give that donor the opportunity to make the decision on their own, where they would like to fundraise. Right? We should not be making decisions for our donors.

They should be making their own decisions. So invite them to give to your mission. Through your charity, right? Ask them for gifts. And then they can decide. And what we know from, um, data from last year, uh, as we looked at the pandemic, is that people were giving and many were giving to the charities that they have long given to and loved.

And then they were giving to other charities as well. So there wasn’t necessarily a loss of critical funds for many organizations who were continuing to fundraise those who stopped fundraising lost a lot of gifts for sure. But when you give your donors the opportunity to give, they will continue to support you.

And when there is a need, a social need or, you know, disaster need or something or environmental need, they then can opt to give to those charities too. And they’ll find a way to do it. I’m off my soapbox. I promise some arts and humanities organizations close their doors. Others got really creative in their approach to service delivery.

And I saw that firsthand with the arts organizations that I work with. I even went and spoke to their boards and other fundraising evangelists would encourage all of these organizations to keep on fundraising. Now some stopped. And it was certainly a hard time across the board. The result for the arts culture and humanities organizations was a decrease in giving by 7.5% in 2021.

However, good news is that this year we’ve seen a resurgence of 27.5% and that’s the largest boon in all gift areas. So when you adjust that for inflation, it’s still an impressive 22%. And as we think about arts and culture organizations in terms of their membership programs, because many have membership programs, we actually have more proof of this rebound, the MNR 2022 benchmarks report found that membership related revenue dropped in 2020, but then came back majorly in 2021.

And when I say majorly, It came back with an incredible 81% year over year increase. So it’s really exciting to see those arts culture and humanities organizations rebounding right now. Another high growth area is giving to public society benefit organizations, which will include social justice charities.

Now it’s been increasing for years and this year it’s up 23.5%. And with all that’s going on in the world, I expect this necessary focus and growth to continue giving by religion was up a bit more than 2021. And it lands at 135 billion. Giving to education was down. We saw a 9% increase in 2021 to education, but this year it’s down to a 2.8% increase and the total amount is 71 billion.

Now that’s not a huge decrease, but it is something for us to continue to watch. Giving to environmental and animal organizations continues to increase by double digits where giving to human service agencies was only up 2.2% last year. Now this could be contributed to a normalizing after increases the last couple of years related to natural disasters in the pandemic.

And we’ll just have to wait and see, I’ve given you a snapshot of the giving results. Now it’s time to consider how this provides insight into the work that you do as fundraisers accidental or not. I really ask you to consider the growth that you see at your organization. And here are some questions to ponder.

Like what trends are you finding from your data? Are you seeing increases in corporate or foundation grants? Are your tactics for engaging supporters in growing individual gifts in line with our consumer driven world? Meaning, do you make it easy to donate to your charity through multiple channels? And have you actually gone through and tested those channels lately to see how easy it is to make a gift?

Are you communicating with your supporters through multiple channels and optimizing those communications regularly? Do you ask your supporters for insight and then survey them rather than operate out of fundraising instinct. Let’s say that you’re a sophisticated fundraising or development shop. You are a fundraising machine.

How are you engaging your future supporters? How are you nurturing those supporters? And I’m talking the ones that are 10 years out and building levers into your communications to convert supporters into donors and upgrade existing donors into higher level givers. We’ve seen a surge in people updating their wills since the pandemic.

Are you talking with your donors about playing gift? We are living in a moment of real change, not just for ourselves and our country, but also because fundraising is evolving those traditional practices. Even the metrics that we use to evaluate progress. Oh, it needs to be revisited for some, all of this change can seem really overwhelming, like really, really overwhelming, even scary.

And then for others, it’s exciting and not happening fast enough, but we’ve grown so much over these last few years that this change is definitely doable. We got this and the more that we lean into it, the better we will be now, as you absorb these giving USA insights and those that are gonna be released, mid-July take a moment to breathe.

And review your fundraising plans. Are you aligned with where your donors are going? What do you and your organization need to do to invest in better systems to manage this change? For some, it might mean that you need additional software or technology for others. It might be that you need additional human resources or you need to better use your volunteers.

It could mean modernizing your recurring giving program to focus on subscription giving because we live in a subscription based economy or it could mean building new partnerships and a stronger commitment to D E I B. That is more than lip service. It could also be thinking about donor retention from your major to your micro donors, or it could be a reorganization of your time to block out a few hours each week so that you can focus on proactive.

Rather than reactive fundraising. Whew. Breathe in again.

There’s so much to think about. But it can be easy to focus your efforts. When we talk about the pandemic, we often talk about being resilient through it. We’re resilient, everybody’s being resilient. I prefer the term antifragile. That term is often used to describe how successful companies adjust through periods of uncertainty and chaos.

Yes. Like the pandemic antifragile means to get better with each new shock and stressor. It’s a way to grow and thrive even when things are tough. I know you have this in you, and I know that our nonprofit sector has it. So let’s dive in and be very thoughtful. In our fundraising approaches for the rest of the year, really think about how you can maximize your fundraising efforts for the rest of 2022.

And as we like to say here at accidental fundraiser, yes, yes, you can a fundraiser, a grant maker, or a nonprofit employee armed with the latest insights about the world of philanthropy is a powerful one. Thank you for joining me for this special update and make sure you listen to accidental fundraiser for tips and tricks on raising money, retaining donors and fulfilling your mission.

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