Giving USA recently released its much-anticipated report, The Annual Report on Philanthropy for the year 2020. Given the upheaval of daily life everyone has experienced due to the pandemic in the past year, the desire to see the impact on the charitable sector was high. We learned that organizations that were nimble, adapted to online giving and communicated well with their donors clearly benefited.
This year’s annual giving report can be summed up in four words: Americans are immensely generous.
Seven of the nine charitable sectors saw growth in 2020. Public-society benefit (15.7%) and environment/animals (11.6%) experienced the most growth, followed by human services (9.7%), international affairs (9.1%) and education (9%).
Here is a brief overview of what the numbers mean in this year’s report.
#1. Despite the economic turmoil and unemployment at its peak last year, individual donors and corporations rose to the challenge as they made up 69% of total giving in 2020 and the top 10 donors gave almost $22B. While this may come as a surprise, it reflects a direct response to the economic devastation inflicted by the COVID-19 pandemic on communities across the country.
#2 – Total giving grew by 5.1%, or 3.8% in inflation-adjusted dollars.
Total giving grew over the previous year for a grand total of $471.44 billion, that is more than $1.2 billion per day! During 2020, a wide range of informal philanthropic behaviors by individuals (i.e., mutual aid efforts, person-to-person giving, and online giving—which reached its highest share of total giving on record) were all heightened. It will be worthwhile to track which of these more informal behaviors, if any, have lasting effects on giving going forward.
#3 – Religion was the largest sub sector receiving 28% ($131.08 billion) of charitable giving. Religious giving (broadly defined as giving to congregations, religious education, missionary societies, religious media and the like) grew one percent this past year.
Because the giving was largely driven by external economic factors, the long term effects of the pandemic on the future of religious giving is yet to be seen.
Lake Institute’s early COVID-19 Congregational Study found that 84% of congregations had the ability to accept contributions online before or right after the pandemic began.
Quick adaptation to online giving for asking and receiving support was the biggest essential for most religious organizations, and many demonstrated remarkable resilience in responding.
#4 Online giving is a growing share of total giving. For the past two decades, online giving has stayed below 10% of overall giving. In 2020 that number reached 13% of overall giving—especially prevalent during stay-at-home orders and for immediate response giving. Donating online is continuing to grow, especially as the population becomes more and more comfortable with it in our increasingly digital world, and it will be important for nonprofits to keep this in mind.
Overall, the past year has been incredibly complex and the giving environment reflects that sentiment. 2020 saw unprecedented events and innovation in fundraising models. In most cases, charities that pivoted to providing online services and conducting traditional fundraising via virtual methods were able to sustain revenues and uncover new methods for interacting. Crowdfunding, mutual aid, and other forms of nontraditional philanthropy served an important role.
Moving ahead, nonprofits will need to communicate their impact to build relationships with new donors and inspire future giving. Our team at GiveCentral will be posting more information to fully unpack this year’s report and help our clients understand how nonprofits can use it to guide their strategies for the following year. We will also be sharing useful online giving tips and tools you can use to embrace this growing trend. So stay tuned.