Insights

What the 2021 Giving USA Report Tells Us About How We Respond to Crisis

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Each year since 1956, the non-profit sector anxiously awaits the results of the Giving USA Report, the most influential annual publication tracking charitable giving in the U.S., and this year was no different. What was different this year was the convergence of unprecedented, simultaneous events that profoundly impacted the lives of nearly everyone. These events included: the COVID-19 pandemic accounting for more than 600,000 U.S. deaths and nearly four million deaths world-wide; widespread unemployment; record-smashing weather disasters producing more than $95 billion in damages in the U.S. alone; the murder of George Floyd, triggering protests and long-awaited conversations about structural racism; and a presidential election with more than 159 million Americans voting (the highest percentage since 1900).

Yet despite these challenges, or perhaps because of them, Americans responded to the unprecedented needs in 2020 with an increase of 5.1% in charitable giving to a new record high of nearly $472 billion. More than 53% of the U.S. population made philanthropic gifts in 2020, revealing a similar generosity seen in response to 9/11 and the Great Recession of 2007. The statistics this year, in many ways, were not surprising. Individual giving (including bequests) accounted for the largest percentage of total giving at 78% ($366 billion). Foundation giving – including independent, community and operating foundations – had the largest increase from previous years, totaling $88 billion. Corporate giving, however, was down 6.1%, presumably due to the shuttering of businesses from the COVID-19 pandemic, a decline in corporate pre-tax profits, and a drop in the GDP.

The Giving USA report revealed that giving to community foundations, which has more than tripled over the past 15 years, continued to have a significant impact on granting in 2020. Much of this can be attributed to the growth of donor advised funds. According to the Community Foundations Public Awareness Initiative, grants from donor advised funds totaled more than $6.7 billion in 2020 (an increase of more than $2 billion over 2019) and allowed for quick activation of resources to address the year’s large-scale challenges.

The Chicago Community Trust saw record growth in both gifts received and grants recommended by donor advised fund holders to the nonprofit sector. The Trust’s fund holders recommended 13,980 grants to nonprofit organizations, totaling more than $954 million. The top five sectors receiving grants from Trust donor advised funds include: Education, with more than $187 million; Food Agriculture & Nutrition, with more than $183 million; Human Services, with more than $156 million; Community Improvement and Capacity Building, with more than $112 million; and Philanthropy Volunteerism and Grant Making Foundations with more than $101 million. Additionally, the Trust worked with its partners to distribute over $90 million in COVID relief and has leveraged more than $100 million to the community through its strategic partnerships. ​

But what does this all mean? While 2020 was an anomaly in many ways, and charitable giving is never an exact science, we feel confident certain trends will continue. Individuals will continue stepping up to help their communities and neighbors in the face of unexpected crisis, adversity, and inequities. We also expect to see donors continue to employ strategies for flexible, effective giving. By providing an easy and expedient method of responding to urgent needs without impacting liquidity in a volatile economic environment, donor advised funds have proven to be a critical and invaluable philanthropic tool. In fact, we’re seeing this trend continue in the current fiscal year, with Trust donors making more than $1 billion in grants to date. The stock market continues to rise, and with it, appreciated securities are flowing in from donors at a rapid pace, providing individuals with the ability to build support for future challenges. And, we saw organizations that created robust hybrid communications and online giving tools benefit with increased donor support.

If there’s one take-away from 2020, it is that we cannot predict the future. But we can predict that we will continue to be responsive to the needs of our communities. The Trust is building on our understanding of how donors are mobilizing their giving to develop strategies for individual and collaborative philanthropy that can address longstanding societal issues and make our communities more resilient to future crises. There is power in working together to address the most critical challenges facing our region and nation. With that in mind, we are excited to see what 2021 brings.