IU Lilly Family School of Philanthropy News: News & Events: Lilly Family School of Philanthropy: IUPUI

IU Lilly Family School of Philanthropy News: News & Events: Lilly Family School of Philanthropy: IUPUI

For First Time in Nearly Two Decades, Only Half of U.S. Households Made Charitable Gifts in 2018

The share of Americans donating to charity fell from two-thirds in 2000 to half in 2018, according to a new study released today by the Indiana University Lilly Family School of Philanthropy at IUPUI.

Just 49.6% of U.S. households made a charitable contribution in 2018, the latest year for which comprehensive data is available. That is a drop of almost 17 percentage points from 2000, when 66.2% of American households gave charitable donations, the study finds. The report, The Giving Environment: Understanding Pre-Pandemic Trends in Charitable Giving, examines giving patterns during that timeframe using data from five nationally representative studies. It finds a consistent decline in giving participation across those datasets and provides new insights into the decline. The report is based on research funded by the Bill & Melinda Gates Foundation.

“We’ve seen a downward trend in households’ participation in giving since the Great Recession, but this is the first time that only half of U.S. households donated to charity,” said Una Osili, Ph.D., associate dean for research and international programs at the school. “This new research offers clear evidence of a substantial decline in formal charitable giving rates prior to the unprecedented events and challenges of 2020. It is also important to acknowledge the many additional ways individuals are participating in philanthropy today, including newer means such as crowdfunding and impact investing, and more traditional ways, such as in-kind giving and mutual aid.”

Data is not yet available to show whether the decline in participation continued in 2020. In order to fully understand the impact of the pandemic, the social justice movement and other developments of last year, it’s important to understand what the charitable giving landscape was like in the years leading up to 2020, and the new study provides that perspective, researchers said.

The study primarily analyzes the latest data from the Lilly Family School of Philanthropy’s Philanthropy Panel Study (PPS), a module of the University of Michigan’s Panel Study of Income Dynamics. As a nationally representative longitudinal study, the PPS follows 9,000+ households over time and provides the most comprehensive data available on giving trends by U.S. households. Fact sheets on findings from the new PPS data, about household giving in 2018, are being released along with the new report.

Both Secular and Religious Giving Participation Declined, but at Different Rates

The study shows that the percentage of U.S. households that donate to religious causes began to decline prior to the Great Recession of 2008-2009. Between 2000 and 2004, 46% of households gave to religious causes, but that steadily declined to 29% in 2018.

The decline in the share of households giving to secular causes did not begin until after the Great Recession, and it occurred at a slower rate than the decline in the percentage of households giving to religious causes. After hovering between 55% and 57% from 2000 to 2008, the share of households donating to secular causes dropped from 52% in 2010 to a new low of 42% in 2018.

Decreases Cross Socio-Demographic Groups

Overall giving participation rates decreased between 2000 and 2018 for members of all racial and ethnic groups studied. Giving participation by Hispanic households experienced the largest drop in giving rate, an 18.5 percentage point decline from 2000 (44.0%) to 2018 (25.5%). In that same period, the giving rate by Black households declined 15.9 percentage points (48.7% to 32.8%) and participation by white households decreased 13.3 percentage points (71.2% to 57.9%).

Only Part of Decline in Giving Participation Is Due to Changes in Income and Wealth

In the PPS data, just one-third of the decrease in charitable giving participation from 2000-2016 can be directly attributed to shifts in income, wealth, and homeownership, suggesting that factors such as decreases in interpersonal trust, empathy and compassion, among other factors, also may play a role.

Researchers also analyzed data from the General Social Survey (GSS), which includes questions about interpersonal trust. GSS data indicate interpersonal trust and giving participation rates declined simultaneously between 2002 and 2014. In addition, both interpersonal trust and giving participation rates fell more among younger Americans (30 or younger) than older Americans (older than 30). In 2002, younger Americans reported an 84.5% giving participation rate, with a 24.7% trust rate. In 2014, the giving rate and trust rate among younger Americans decreased to 78.9% and 18.6%, respectively. Although this correlation does not mean that the decline in trust helped cause the decline in giving participation, it suggests there may be a relationship between the two, the researchers said.

Changing Philanthropic Landscape

“The philanthropic environment continues to evolve rapidly, with a wide variety of changes driven by factors such as innovations, technology, donors’ preferences and nonprofits’ practices,” Osili said. “The COVID-19 pandemic, increased awareness of racial and social justice issues, and the economic crises in 2020 likely shifted aspects of the philanthropic landscape, as well.”

The new study is part of the Lilly Family School of Philanthropy’s ongoing research designed to increase understanding of changes occurring in the charitable giving environment. Upcoming research from the school will delve further into potential explanations for the decline in charitable giving participation. Better understanding of the factors influencing donors’ decision making, especially among diverse and newer donors, can help identify ways to expand and improve the giving experience for both donors and charities, Osili said.

Read the full report

About Lilly Family School of Philanthropy

The Indiana University Lilly Family School of Philanthropy at IUPUI is dedicated to improving philanthropy to improve the world by training and empowering students and professionals to be innovators and leaders who create positive and lasting change. The school offers a comprehensive approach to philanthropy through its undergraduate, graduate, certificate and professional development programs, its research and international programs and through The Fund Raising School, Lake Institute on Faith & Giving, the Mays Family Institute on Diverse Philanthropy and the Women’s Philanthropy Institute. Follow us on Twitter, LinkedIn, or Instagram and “Like” us on Facebook.

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