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For 20 years, experts have sounded the alarm on the decline of charitable giving in the US. Then came the pandemic, which led to a wave of new donations and volunteers to nonprofits. For some leaders, this was a sign that perhaps the retreat from philanthropy was reversing course.
But it’s clear now, according to a substantial new report released today by a group of nearly 200 philanthropic leaders, that Covid-19 did not bring about any lasting reversal of declining charitable giving — and many of the trends identified in the 2010s have only since accelerated.
Today, the number of donors to and volunteers with nonprofit organizations continues to decline, even though the total amount of money flowing to the nonprofit sector has gone up. In other words, more money is being given, but by fewer people.
These are some of the key takeaways from the report, authored by a group called the Generosity Commission. Over the past three years, this commission funded more than $2 million in research to better understand the state of giving and volunteering in America.
The report is among the most comprehensive surveys of the field. The last time such a broad assessment of philanthropy was published was in 1975, with the release of the Filer Commission, which fueled lasting reforms in nonprofit governance and tax policy.
This time, the Generosity Commission similarly recruited top researchers to better clarify US philanthropic trends.
- The Stanford Center on Philanthropy and Civil Society studied contemporary giving patterns
- The Urban Institute think tank researched the nonprofit sector specifically
- The University of Pennsylvania School of Social Policy and Practice drilled down on the role of the pandemic
- The University of Maryland’s Do Good Institute looked at factors that influence giving and volunteering
- Hattaway Communications led public opinion research on Americans’ motivations and aspirations when they give
It should be said that this project wasn’t led by disinterested parties. The Generosity Commission wants to figure out how to increase giving and volunteering to the more than 1.7 million nonprofit organizations across the United States, 88 percent of which have budgets less than $500,000.
The report’s findings highlight some of the key debates that have been mounting in philanthropy over the last decade: Why does giving and volunteering matter? What constitutes generosity and can it really be measured? Why is nonprofit participation declining?
Its takeaways are relevant for those grappling with how to make a difference, a topic that we’ve been covering at Vox and that I’ve personally been trying to think through. Last month, I published an essay exploring why I changed my mind about volunteering; the piece sparked a lot of discussion about what really “counts” when it comes to service. This new report adds to the broader debate I touch on in my essay about privileging certain types of generosity over others, and forces readers to consider the stakes of a diminished nonprofit sector.
The authors make the compelling argument that there are many social services we’ve come to take for granted that nonprofits will always provide. And leaders with the Generosity Commission suggest it’s too risky to expect the government, the business sector, or even informal acts of generosity to ultimately fill these roles.
They may be right. But other countries have much less robust nonprofit sectors while still providing social services, and so to convince a clearly skeptical US public, charitable groups will need to think harder about how they tell their story. The case for supporting nonprofits can’t simply be that nonprofits have historically assumed these responsibilities in America, or that Alexis de Tocqueville famously admired them and therefore we should stick to nonprofits out of tradition.
We’re facing something of a Rorschach test right now: Recently, the New York Times published a sobering article on the threat posed by declining volunteer paramedics. The Generosity Commission could argue that this situation perfectly encapsulates why it’s critical to motivate more people to step into these formal volunteering roles that have served American communities for decades. Yet others could reasonably say that in a country as wealthy as the US, we shouldn’t depend on volunteer labor to fill these jobs, and indeed, most other nations don’t.
The state of volunteering and giving, according to the Generosity Commission
Many nonprofits are still flush with cash, but not all nonprofits are experiencing a money boon. Some are receiving less money than they used to, and according to the Urban Institute, these are most likely to be small, community-based nonprofits — the type of groups most reliant on volunteers to support their mission and local contributions to balance their budgets.
Even for the organizations with ample funding, their donations increasingly come from a concentrated pool of wealthy donors. According to the Fundraising Effectiveness Project data included in the new report, 43 percent of dollars given to nonprofits in 2020 came from gifts of more than $50,000, up 11 percent from 2019.
In 2020, GivingTuesday reported that there was a 5 percent increase in charitable dollars from the previous year, reaching a record annual $471 billion. But by 2021, there were fewer total donors than there were in 2019. The Fundraising Effectiveness Project further reported that the number of donors dropped by 3.4 percent in 2023, after already having dropped 10 percent in 2022, and 5.7 percent in 2021. Most of these drops have been concentrated among those with lower levels of education, income, and wealth.
There’s similarly been a drop in the number of volunteers, even with the rise of virtual opportunities. AmeriCorps reported that 23 percent of the country formally volunteered in 2021, down from 30 percent in 2019. It’s the steepest drop since the agency started collecting data in 2002.
And this decline is taking a toll on organizations: Nearly half of nonprofit CEOs reported in 2023 that finding enough volunteer help was a major problem for them, up from 29 percent in 2003.
Okay, but why are people donating and volunteering less?
Perhaps it seems intuitive that people who make less money would be less likely to donate or volunteer. But research has shown that, at least historically, it’s the poor who donate more of their incomes to charity. The Generosity Commission suggests that while economic insecurity certainly is part of the story, cultural shifts and changes in habit formation are likely at play, too.
The Great Recession hastened this decline: US households donating to nonprofits fell from 65.4 percent in 2008 to 53 percent in 2016. Yet these downward trends continued even after the economy recovered. By 2018, the proportion of households giving fell below 50 percent, according to the Philanthropy Panel Study, leading some economists to argue that “shocks to income and wealth” cannot fully explain the drops we’ve seen since.
Millennials in particular give less today than previous generations did when they were at the same age and life stage. Some researchers speculate that delays in other traditional markers of adulthood, like marriage and buying a house, may have discouraged charitable behaviors.
Another leading explanation is declining religiosity. Americans who identify as religious are far more likely to donate to charity, but as of 2020, only 47 percent of Americans belonged to a church, synagogue or mosque, down from 70 percent in 1999. However, many Americans today identify as spiritual, and there’s some evidence that practicing spiritual activities like yoga and meditation are linked to giving and volunteering.
Other explanations include declining trust in institutions, broader social disconnection, and changing tax incentives. Some experts argue that a focus on courting high-dollar donors has sidelined smaller contributions, fueling a negative cycle in giving.
The report doesn’t give any firm answers, and emphasizes there’s much more to understand, especially when it comes to understanding informal giving.
What the Generosity Commission recommends
The commission makes nine recommendations to address giving and volunteering rates, some clearly heavier lifts than others.
To change the culture, the report recommends enlisting more public figures and leaders to talk about how they benefit from giving and volunteering, and to include young people and employers in the conversation. They also recommend that philanthropies issue marketing and development grants to nonprofits, mutual aid networks and giving circles.
The report recommends further research, particularly on the intersections with faith, social connection, and informal modes of generosity. (Jane Wales, the commission co-chair and vice president of Philanthropy and Society at the Aspen Institute, told me some Gates-funded research on informal giving is currently underway.) The report also says more needs to be done to help smaller, under-resourced nonprofits learn about emerging best practices.
The Generosity Commission makes two policy recommendations — one to sufficiently fund the IRS to regulate the nonprofit sector, and another to create a new non-itemized charitable tax deduction, to incentivize more Americans to give. (The deduction would make it easier for people who don’t typically itemize their taxes—particularly middle and lower-income households—to receive tax savings from charitable giving.) The authors note that we’re coming up on an opportunity for Congress to push these changes, given that the Tax Cuts and Jobs Act of 2017 will expire at the end of 2025.
“If we had some version of that [tax deduction], it would validate giving to [nonprofit charities] as the normative civic act,” Benjamin Soskis, a senior research associate at the Urban Institute and an editor of the Generosity Commission report, told me. “That could be a big ask of the [Tax Cuts and Jobs Act]. But it’s also possible that the days of nonprofits’ predominance within the charitable landscape are passing.”
There are bigger questions here
If the glory days of nonprofits are passing, what would come next?
Probably something worse, according to the Generosity Commission. It argues that the nonprofit sector remains the bedrock of American civil society, providing valuable goods and services that the government and the market has not and likely will not ever do.
To its credit, the commission repeatedly stresses appreciation for informal modes of giving and volunteering, like mutual aid networks and crowdfunding platforms. It also admits that its perspective is increasingly at odds with how many people, especially in younger generations, think about volunteering and giving. The researchers find that most Americans identify as generous, aspire to be generous, 74 percent of Americans self-identify as “generous” — and may not buy the claim that declining nonprofit contributions signal declining generosity.
Similarly, younger Americans report that they’d rather give directly to individuals, rather than to intermediary organizations. The evidence is mixed on whether political giving may “crowd out” charitable giving, and further study will be required to clarify whether forms of social engagement like protesting are used as substitutes for volunteering.
Woodrow Rosenbaum, the chief data officer of GivingTuesday, has pushed back on the idea that giving is in decline at all, saying that’s only true if our measurement yardstick is based on monetary gifts to nonprofits. Survey research from GivingTuesday suggests that younger Americans simply “have less rigid demarcations” between various modes of giving — whether that’s to nonprofits, GoFundMes, individuals, or political campaigns.
Still, the Generosity Commission believes those activities are unlikely to ever fully substitute for the daily work of nonprofits. When I asked Wales, the commission co-chair, about this question, she emphasized that the political appetite for building out the welfare state is just lower in the US than in other countries, and she suggested it would be difficult to build the kind of system they have in Europe.
Perhaps one of the most compelling arguments the report makes is that participation matters for healthy democracies. The commission asks us to consider whether declines in formal giving have contributed to mental illness and increasing levels of loneliness. (The authors suggest yes, but, again, conclude more research is needed.) One of its studies found that giving to a charity increases a person’s likelihood of joining one or more community groups by nearly 10 percentage points; volunteering increases it by a rather stunning 24 percentage points. This kind of data lends new weight to the idea that formally giving and volunteering could strengthen civil society — both collectively and individually.
The debate over the definition of generosity notwithstanding, one thing is clear: nonprofits increasingly depend on a limited number of rich benefactors. And ceding a sense of empowerment to improve the world to the ultra-wealthy is what keeps Wales up at night.
“People ask why does participation matter if there’s enough money to go around to nonprofits, why does it matter if it’s concentrated in the hands of just a few people,” she told me. “And from my own perspective, it’s got everything to do with the health of our society. The last thing you want is large portions of American society to feel they lack agency and are not part of the everyday decision-making in their own community.”
