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Charitable Giving Expected to Return to Pre-Pandemic Patterns in 2021

Posted: 5/17/2021

Click here to read on The Chronicle of Philanthropy.

Charitable giving will likely return to pre-pandemic patterns this year, potentially resulting in declines in year-over-year revenue for human-service charities whose programs were in high demand in 2020, according to a new report from GivingTuesday's Data Commons research arm.

The report, released Tuesday, reviewed how the events of 2020 affected the behavior of charitable donors and offered predictions on how giving would change in 2021. The report is based on aggregated 2020 data from 74 charitable-giving platforms and focuses on giving to established nonprofits that raise no more than $25 million annually.

The report estimated that overall giving in 2020 increased 5.2 percent from 2019, driven mostly by large donations from supporters who had previously given to an organization in 2019 or earlier.

Further, the long-term downward trend in the number of overall donors was reversed in 2020. The 1.3 percent increase in the number of supporters was driven "almost completely" by an 11 percent increase in the number of small gifts of $101 to $500. The number of donors who gave $100 or less increased by less than 1 percent. The number of donors who gave $501 to $5,000 increased 2.2 percent, while the number who gave $5,001 to $50,000 declined by 4 percent. The number of donors who gave more than $50,000 increased by 5.3 percent.

According to Woodrow Rosenbaum, GivingTuesday's chief data officer, it's unclear if smaller-dollar donors will continue to give in such volume.

"This is the question about so many things we observe in 2020: Was that a one-off, or does it herald a change? To a degree, we don't know," said Rosenbaum. "It remains to be seen how much of that was driven by the emergency of the moment. But what we expect is continued volatility."

But most nonprofits, by number, saw fundraising revenue drop 5 to 10 percent as the lion's share of giving went to organizations with already-robust fundraising totals and whose work was directly related to the effects of the pandemic. Another factor in that decline: Many smaller nonprofits temporarily halted fundraising in the early days of the pandemic.

"We saw more organizations drop out of the data set than ever before," said Rosenbaum. "Smaller organizations were more impacted. There was also some pessimism. We heard from organizations who were saying we think people are going to find it hard to give so we're not going to ask."

As the pandemic recedes in severity and local economies begin to bounce back, the authors expect human-service groups to see their fundraising levels go back to what they were before the crisis and charities less directly connected to the pandemic response and civil-rights issues to recapture donors who had given before but not in 2020.

The report recommends maintaining contact with new 2020 donors and reminding them of the impact of their gifts. In addition, the authors urge charities to promote recurring donations to keep new donors in the fold. That will be an important tactic for fundraisers looking to hold onto contributors who gave $500 to $5,000 in 2020.

"Whether or not we continue to tap into the desire of the American public to be generous depends on whether or not we go and meet them," said Rosenbaum. "Being present and giving people the opportunity they're looking for to affect change is one of the ways that we can recover strong."

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