Unpacking the 2024 Giving USA Report: What Does the Data Say About the State of Giving?

Earlier this month I shared my thoughts about the recent annual Giving USA Report in Tom’s Takeaways: The Continued Decline in Giving….The Uncomfortable Conversation.  To recap, the decline should be a wake-up call and call to action for nonprofits to become more financially sustainable by moving from the donor/charity model of raising money to an investment-driven model.  Convergent’s Investment-Driven Model™ is built on the outcomes you deliver, which are much more appealing to today’s nonprofit investors, especially those that can make transformative, rather than transactional, investments.

The Giving USA 2024: The Annual Report on Philanthropy for the Year 2023 is one of the longest running and comprehensive reports on philanthropy in the United States. First published in 1956, the annual publication provides informed estimates and trend data on charitable giving, including all donations to charities and religious organizations by households, corporations, estates and foundations. Giving USA’s methodologies use recent data and econometric analyses of tax data, economic indicators, and demographics to provide numbers on giving by source and recipient subsector. The report is a valuable resource for nonprofits, helping to understand giving patterns and trends to assist them in developing fundraising strategies and making decisions.

Charitable Giving Reaches Record High, But Fails to Keep Pace with Inflation

The Giving USA Report revealed both positive signs and areas of concern. Total charitable giving in the U.S. reached a new record of $557.16 billion in 2023, representing a 1.9% increase in current dollars over the prior year. However, when adjusted for inflation, total giving actually declined by 2.1%, underscoring the ongoing impact of high inflation on the nonprofit sector. The real value of donations has eroded due to the persistently high rate of inflation. Even so, the performance surpassed the expectations of many economists, as an overall percentage of the nation’s gross domestic product (GDP).  

Individual Giving Declines, But Remains Largest Source

Giving by individuals, which accounts for the largest share of total donations at 67%, declined by 2.4% in inflation-adjusted terms. This reflects the economic uncertainty and pressure on household budgets that many Americans continue to face. In contrast, foundation giving continued to grow, albeit at a slower 2.3% inflation-adjusted rate. Giving by foundations had a slight increase over the past year but has grown overall from 6% of the total to 19% of the total in the past 40 years, crossing the $100 billion mark for the second consecutive year. This indicates a need to find ways to better engage individual donors and provide compelling cases for support that resonate in the current economic climate, while leveraging the increasing philanthropic power of foundations.

Giving by Corporations is Remains the Smallest Source of Giving, While Bequests Remain Steady  

Although it stands as the smallest source of total giving at just 7%, giving by corporations is the fastest growing giving source. Corporate giving, including cash, in-kind contributions, and grants, remains a vital but variable funding source. More small and mid-sized companies are getting involved in corporate philanthropy, and businesses are adopting more employee-driven corporate giving programs, like matching gifts.

Meanwhile, bequests, which have steadily represented a total share of 8-10% [1] of donor dollars over the past 40 years, will continue to be an important philanthropic focus going forward- particularly as the wealth of older adults grew 30% from 2019-2023. [2]

Shifts in Subsector Giving

The report also highlighted notable shifts in giving patterns across different charitable subsectors. Donations to religious organizations declined significantly, receiving less than a quarter (24%) of total giving for the first time in 50 years. However, public-society benefit and human services organizations saw strong growth, increasing by 7.2% and 1.7% respectively when adjusted for inflation. In particular, even when adjusted for inflation, giving to health, education and the arts reached record highs. The data suggests donors are increasingly prioritizing causes that have a broad societal impact, such as human services and public-benefit programs. It may also reflect shifting values of donors towards more secular causes. Nonprofits will need to carefully evaluate their value proposition and communicate their impact to attract this shifting donor interest.

Megagiving & Giving by Wealthy Donors Decreases  

The report emphasizes the importance for nonprofits to diversify their donor base and fundraising strategies, rather than relying heavily on megagifts or wealthy donors alone. Megagifts (donations of $550 million or more) decreased from 5% of individual giving in 2022 to 2% in 2023. The decrease in megagiving indicates a reduced influence of exceptionally large donations. There is also a growing reliance on wealthy donors, which may be problematic for long-term sustainability, particularly as donor retention rates have declined. Everyday donors are falling away, highlighting the need for nonprofits to engage more broadly.

Upcoming: Implications and Actionable Strategies

The 2024 Giving USA Report highlights opportunities and challenges for nonprofits, offering vital insights to help nonprofits rethink and enhance their fundraising strategies, and adapt to an evolving philanthropic landscape by embracing the Investment-Driven Model™.  In our upcoming articles, we’ll look at the implications of these shifts in donor giving, as well as the strategies and actions nonprofits can take to not only stay afloat – but thrive – in today’s evolving fundraising arena.  

In difficult times, experts can guide the way. Convergent Nonprofit Solutions understands the importance of nonprofit organizations and their role in communities nationwide. Look to Convergent Nonprofit Solutions to help you navigate opportunities and challenges.

[1] Giving USA 2024 Annual Report on Philanthropy Analysis Vlog
[2] Giving USA Special Report: Giving by Generations, 2022