2 Years of Strong Fundraising Returns Projected, and 5 Other Giving Predictions

Posted on

Click here to read on The Chronicle of Philanthropy.

A recent report from the Lilly Family School of Philanthropy suggests a period of “broad philanthropic growth” is on the horizon for nonprofits over the next two years as the economy rebounds after the Covid pandemic.

The report forecasts a 4.1 percent increase in total giving in 2021 and a 5.7 percent increase in 2022. For individual and household giving, the report forecasts a year-over-year rise of 6 percent in 2021 and 3.9 percent in 2022. Meanwhile, giving by all types of foundations is predicted to dip by 1 percent in 2021 but then jump by 8.8 percent in 2022. The report also projects giving from estates will grow 1.1 percent in 2021 and 12 percent in 2022, while giving by corporations is predicted to rise 4.3 percent in 2021 and 6.4 percent in 2022.

The small decline in foundation giving projected for 2021 is due to the spike that occurred the year before, according to Jon Bergdoll, a statistician with Lilly who co-wrote the report with Anna Pruitt. Foundations are expected pull back a bit and revert to more typical levels of giving after an unusually big year for grant making.

“It’s a very slight stumble from a very high point rather than a real drop,” said Bergdoll. “It’s coming back down to earth a little bit.”

The overall growth projected in the report is based on several assumptions, namely that the economy will grow rapidly in 2021 as more people are vaccinated and the need for social-distancing mandates declines.

“We emphasize that charitable giving projections may vary depending on the underlying economic conditions,” reads the report. “If the U.S. economy grows more slowly in 2021 and there is continued uncertainty regarding health conditions, this will likely lead to a less favorable outlook for giving.”

The report is one of several released recently that have begun to prognosticate how charitable giving will change in the eagerly awaited post-pandemic era. We’ve compiled a rundown of key statistics from our recent coverage of attempts to predict the state of philanthropy after the pandemic.

Estimated increase in the number of charitable donations in 2020 — 10.6%

More Americans gave to charity last year than in 2019, with the greatest increase in the form of gifts under $250, according to estimates from the Fundraising Effectiveness Project. Changes to the rules for charitable deductions, passed as temporary measures in the first Covid relief bill, suddenly allowed a lot more Americans to claim tax benefits for small donations. Likewise, the number of donors also grew by about 7 percent from 2019 to 2020.

Share of charities that expect to see a decline in fundraising in 2021 — 43%

A January survey from fundraising consultants CCS Fundraising found that many charities are expecting their fundraising revenue to take a hit in 2021. Thirty-three percent expect a modest decline, while 9 percent expect a significant decline. One trouble spot is is special-event fundraising, with 66 percent of responding nonprofits expecting a decline this year.

Share of foundations that plan to stick permanently with loosened restrictions on grantees

— 56%

The pandemic inspired hundreds of foundations to make big changes to the ways they make grants, loosening restrictions and reducing paperwork, among other things. But how long will that last? A December 2020 report from the Center for Effective Philanthropy found that just over half said they would stick with the changes even after the pandemic; 13 percent said the changes are not permanent.

Share of education grant makers who say racial justice is now the top priority for funds — 39%

The pandemic and its disproportionate impact on minority groups coincided with a major resurgence in civil-rights and racial-justice discourse, spurred by high-profile incidents of police brutality and resulting protests in cities across America. As a result, 39 percent of foundations told Grantmakers for Education in a study released in December that racial justice is now their top priority.

Share of foundation Covid grants that went to human-service organizations — 28%

During the pandemic, foundations focused their dollars on causes perceived to have the greatest need. According to a March report from Candid and the Center for Disaster Philanthropy, human services, along with health and education groups, received the largest shares of grants.

Proportion of people who donate regularly who plan to give to again this year — 87%

A February report from nonprofit tech company FrontStream, based on a poll of slightly more than 1,000 U.S. adults who had given to a charity in the past three years, found that an overwhelming majority said they planned to make a charitable contribution this year. Further, roughly 20 percent said they intended to boost their giving this year. Among the most popular causes were health charities and children’s groups.

Return to Insights & Events