Charitable donations after inflation fell for second straight year in 2023

Americans gave less money to charity in 2023 for the second straight year, reversing years of increases as nagging inflation left small donors feeling pinched.

The nonprofit Giving USA reported this week that philanthropic donations dropped by 2.1% after inflation to $557.16 billion in 2023. The only other times in the past 40 years that inflation-adjusted giving declined year-over-year in the annual report were 1987, 2008, 2009 and 2022.

Donations over the past two years became fewer and larger as individual gifts under $1,000 became rarer, said Wendy McGrady, vice chair of Giving USA. She noted that small donations typically decline in tough economic times.

“If you’re spending more money on bread and eggs, you’re probably not giving your $100 to charity anymore,” Ms. McGrady told The Washington Times. “None of us wants to see that, because participation by the individual donor is the backbone of philanthropy.”

According to Giving USA, pandemic stimulus money drove inflation-adjusted charity to record highs in 2020 and 2021, with annual gifts exceeding $500 billion for the first time. In 2022, giving fell again by 10.5% after inflation.

The national network of nonprofit professional service firms found that giving by individuals dropped by 2.4% and made up 67.2% of charity last year, down from 73% in 2013.

Donations fell by 2.3% year-over-year from foundations, which grew to account for nearly 1 in 5 gifts and more than $100 billion for the second straight year. They fell by 1.1% for corporations and stayed flat for bequests at 0.6% growth.

Adjusted for inflation, international relief gifts fell by 1.6% last year and religious donations fell by 1%, making them the two biggest financial losers. Total giving in different categories ranged from a low of $21.2 billion for the environment and animals to a high of $145.81 billion for organized religion.

“The state of giving is strong despite high inflation,” Philanthropy Roundtable President Christie Herrera said. “We even see some promising areas of growth with increases in giving from foundations and corporations. Americans are rising to the challenge of supporting the most vulnerable in our communities, giving over half a trillion dollars to charity in 2023. Despite the challenges posed by inflation, the nonprofit sector demonstrated its enduring strength.”

The Giving USA report comes as social services, food pantries and homeless shelters have struggled to meet a surging demand from migrants and working-class families as costs have soared in recent years.

According to Giving USA, an 8% inflation rate in 2022 contributed to an 8.4% drop in giving that year. Last year, a 4.1% inflation rate added to a 2.1% decrease in financial donations.

But Michael E. Hartmann, co-editor of The Giving Review, a publication of the conservative Capital Research Center, said it’s impossible to measure charity only in dollar signs.

“If charity … is becoming more and more something only for the wealthier and wealthiest among us, that’s bad, for a lot of reasons,” said Mr. Hartmann, who was not involved in the report. “If charity is alternatively defined in the way most people would understand it, there really may be less reason for discouragement.”

Collage Group, a Bethesda, Maryland-based consumer research company, found in a survey this year that more Americans donate items than money, and nearly as many volunteer their time.

The same survey found 72% of nondonors blamed “a lack of funds” for not donating, compared to 34% who said they never give money.

“That insinuates an openness to donating this year if concerns about finances ease or, possibly, if they’re given other options like one-time donations or donating items or time,” said Jack Mackinnon, Collage Group’s senior director of cultural insights.