The new Giving USA report is out, and the headlines sound grim. Giving is down, down, down! But the reality is more nuanced, especially when it comes to individual giving.
Last week, I heard Dr. Una Osili share highlights from the new report. Dr. Osili leads the research and production of Giving USA: The Annual Report on Philanthropy at Indiana University’s Lily Family School of Philanthropy.
First, let’s start with the bad news. Individual giving really is down. Individual giving in 2022 was approximately $319 billion, down 6.4% from 2021 levels, or 13.4% when adjusted for inflation. The overall number of households that give has declined. And individual giving as a percent of disposable income was down to 1.7%, one of the lowest levels since 1982. None of this should come as a surprise to nonprofit leaders, who are experiencing the impact of these declines with real consequences to mission impact.
While this is sobering news, it’s important to keep a few things in mind. First, $319 billion is still a lot of money. And second, while there’s not much we can do about barriers to giving like inflation and consumer uncertainty, there are strategies nonprofits can put into place right now to encourage individuals to give:
1. Promote your nonprofit and focus on your impact. As fundraising experts Kim Klein and Stan Yogi often say, “givers give”. But people can’t give if they don’t know you exist. And even if they know you exist, it doesn’t mean they understand the important work you do. According to one study only 5% of American households can identify the role that nonprofits play in their communities. Make sure your messaging shows the positive outcomes and real change that your work brings. This can help you to bring in new donors and it can also reinforce your value to current donors.
2. Invest more in getting to know and cultivating individual donors. According to the latest Giving USA data, approximately 85% of giving is controlled by individuals. Individuals. That may include donor-advised funds (DAFs), family foundations, and other vehicles but ultimately there is an individual driving the decisions. Sometimes that individual is a new or low-level donor, or even an occasional volunteer. Remember that “the ask” is only one piece of a much larger development process. Cultivation and stewardship should not just be reserved for major donors.
3. Collaborate with others to encourage increased giving. You can’t do it all alone. Some barriers to higher levels of giving involve broader, systemic challenges that require public policy solutions. For example, you might join other nonprofits and allies in advocating for state or local government to provide increased incentives for individual giving. Or you may join an existing coalition or movement, like the movement to create annual payout requirements for DAFs.
All of these strategies take time and effort. But behind that big storm cloud, there just might be a rainbow with a pot of gold.