2021 Trends in Philanthropy

By Mary Walker, Petrus Blog Contributor

Latest Information on Giving Trends

Giving USA 2022: The Annual Report on Philanthropy for the Year 2021 was released in June.  The Indiana University Lilly Family School of Philanthropy researched and wrote the report. 

The following are highlights that I thought would interest Petrus clients and blog readers. The opinions expressed below are my own. If you would like more detail, summary information is available for free here. You can subscribe to the ENTIRE report here.

• Strong Giving Trend in 2020 Continued in 2021

In 2020, the year that we adjusted our fundraising programs and expectations due to COVID, more money was given than in any previous year studied--and about 5% more than in 2019. See last year’s blog post for my analysis of why 2020 was a time of great generosity.

When adjusted for inflation, the amount given in 2021 was essentially flat. So, the bad news is that philanthropic giving did not grow in 2021. HOWEVER, this bad news is really good news. Why? Because giving DID NOT regress to pre-pandemic levels in 2021. This is an encouraging signal for fundraising in 2022. In others words, a lot of giving happened in 2020 AND 2021, a year when pandemic restrictions eased and people were getting back to a more “normal” lifestyle. There is reason to be optimistic that 2022 will be a good year too. 

• BY FAR the Largest Amount of Giving Goes to Religious Organizations

In fact, the percentage of donations going to religious charities INCREASED by over 5% year-to-year, to 27% of the total amount donated. To compare, education is the next highest sector, at 14%. 

This is GREAT news for those of us who fundraise in the faith-based world. Our benefactors have actually amped up their generosity as the effects of the pandemic were slowing down. Again, we should ask why. My totally unscientific personal observation backed by my husband the usher is that church attendance is probably about 60-80% of pre-pandemic numbers. In other words, our parishes and campus ministries HAVE LOST our weekly touch with a significant number of people over the past two years. Those who have “come back” are seeing the gaps in the pews. They may be concerned about the future of the faith and MORE inclined to give toward outreach activities.

• Bequest Giving is Trending Upward

Bequest giving is volatile year-to-year. This is because a few very large bequests can skew the results. For example, 2020 was a strong year, and 2021 was down by over 11% adjusting for inflation. However, this decline STILL reflects the second-highest level of bequest giving. If your ministry is not actively engaged in education and outreach for planned giving, you WILL miss SIGNIFICANT gifts in future years. 

Bonus piece of random information that came from a discussion of the report’s findings. There is a link between pet ownership and bequest giving. Those who have pets and love animals are more likely to make a bequest. When making donor visits, be sure to notice if the household has pets!

• Giving by Foundations Grew, Continuing the Trend 

Overall, the economy has been good over the past five years. Because much of foundation funding comes from stocks and other financial instruments, nonprofits have benefited. However, many foundations are “personal” in nature, such as family foundations. While there may be a formal application process for funds, it is important to treat foundations in the same way you treat individual benefactors capable of making a major gift. The first time a foundation hears from you SHOULD NOT be from a proposal! That is, we need to move beyond the grant proposal and make connections with the decision makers. We should be engaging in a more “grassroots” identification of foundations, such as researching what family foundations are within your geography or working with your local community foundation.

• Giving by Corporations Took a Big Jump in 2021

Corporate giving was about 4% of total giving, a growth of nearly 24% since 2020. 

I suspect corporate giving IS NOT a major fundraising outreach in our ministries, and I’m not suggesting that it should be. HOWEVER, it is obvious that corporations are in the giving mood, and if your ministry has an opportunity that might interest the business world or improve community circumstances, this is a good time to reach out. Also, this category includes in-kind giving, so businesses might be more inclined than ever to help out with materials/food/services for events. 

• Public-Society Benefit Giving Grew by over 23%

This category of giving includes a wide variety of charities, national donor-advised funds, United Ways, and civil rights organizations. Because many of our churches and ministries also volunteer in this sector, we should look for opportunities to communicate this engagement to potential donors. A person inclined to give to one of these charities might also be inclined to give to a ministry that promotes volunteerism for that charity.

• More First Time Donors Are Giving Again

This is great news! The number of people who gave in 2020 AND 2021, but not before, is up by over 26%. This MAY suggest a trend that benefactors are more open to ongoing support. Perhaps it’s time to focus fundraising efforts on monthly giving programs AND make special efforts to reach out and thank those making a first-time gift. 

Conclusion: NOW is a Great Time for Donor Engagement

The generosity displayed in 2020 continued through 2021. Today, inflation and an uncertain economy present challenges and opportunities for fundraisers. EVERYBODY understands that costs have gone up, and will certainly understand increased need. On the other hand, the personal circumstances of benefactors influences what they can give. 

The only way we can find out the concerns of our particular giving community is to ASK! We fundraisers need to be “out there,” listening to donors AND executing the best practices of our profession.