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Financial Planning > Charitable Giving

Charitable Giving Up Nearly 8%, Despite Pandemic

By Michael S. Fischer

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Whatever other havoc the pandemic has caused, it hasn’t closed the wallets of charitably inclined individuals in the U.S. 

Charitable giving grew by 7.6% during the first nine months of this year, compared with the same period in 2019, according to the Fundraising Effectiveness Project’s third quarter report, which is administered by the Association of Fundraising Professionals Foundation for Philanthropy in collaboration with GivingTuesday.

Giving in the second and third quarters offset a 6% year-over-year decline in the first quarter.

Year-to-date donations through Sept. 30 represented almost 70% of 2019’s total giving, which compared with about 65% for the same period last year. 

“What we’re seeing is that people remain very generous and continue to support their neighbors, communities and charitable causes when they face crises and hard times,” Jon Biedermann, chair of the FEP and president and chief executive of The Biedermann Group, said in a statement. 

“Some in the sector were worried that the rebound in giving in the second quarter would be short-lived, as donors suffered prolonged challenges from the pandemic,” Biedermann explained. “While the donors giving less than $250 in the third quarter were not as far ahead as the second quarter, the public remains resolute in their giving.” 

Biedermann noted that people giving $1,000 or more increased in the third quarter. He said this was critical because those donors make up a majority of the donations and were lagging behind in the first half of the year.

The overall number of donors, though, grew at a slower pace in the third quarter, 6% versus 7.2% in the second quarter. The increase in donors was led by an increase in the number of new donors, up 11.7% year over year. 

The only area of significant decline was in new repeat donors — those who gave to charity for the first time in 2019 but so far this year have not given again to the same charity — down by 10.3%.  

Biedermann surmised that many of last year’s new donors switched their giving to pandemic relief organizations this year, which may account for the drop in new repeat donors and the increase in the number of new donors. 

Take the Quiz: What Do You Know About Charitable Giving and Taxes?

The Fundraising Effectiveness Project provides the publicly available Growth in Giving Database of actual donations to nonprofits in the U.S. and Canada. 

The report’s data analysis includes giving details from 2,496 nonprofit organizations based in the U.S. as a subset of the Fundraising Effectiveness Project. The FEP’s database of organizations comprises organizations that raise between $100,000 and $10 million, omitting larger charities such as hospitals and universities.  

What Lies Ahead for Q4 2020

Nonprofit organizations receive between 33% and 75% of their total yearly contributions during the fourth quarter, according to the report. 

It noted that a June survey from the Association of Fundraising Professionals found that 57% of charities expected to raise less money in 2020 than they did in 2019, making fourth quarter giving even more critical this year.

“The absolute priority for charities must be to keep fundraising through these times, no matter your cause,” Ben Miller, vice chair of the FEP and chief analytics officer at DonorTrends, a division of EveryAction said in the statement. 

Charities should continue their fundraising right up until the end of the year as many donors often wait until the last moment, especially if they are considering different tax issues, Miller said. “Approach donors with sensitivity and make clear you understand the challenges of 2020, but don’t be afraid to reach out.” 

So far, so good. Charities are on track for a very successful final three months of the year, according to the report, thanks to the increase in giving and number of donors in the January-to-September period. 

“People came together on GivingTuesday, Dec. 1, and donated $2.47 billion dollars in the U.S. alone,” Woodrow Rosenbaum, chief data officer of GivingTuesday, said in the statement. “This was a 25% increase over the previous year’s total and represented a similar increase in participation.” 

Rosenbaum said that if the trends hold up, an additional surge of donations will happen in the final days of the fourth quarter.

The report notes that a sense of optimism is rising among donors as the COVID-19 vaccine begins to be distributed. 

In addition, the coronavirus relief bill — recently passed by Congress and signed by President Trump — could increase giving if Americans feel more confident about their financial situation, and the stock market remains robust overall. 

Still, the report cautioned, changes in policy, in the economy or the stock market or even in vaccine distribution, could affect overall giving. 

Related: How Did You Give Back This Year? Advisors’ Advice 

Michael S. Fischer

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