What Giving USA’s Report for Year 2023 Means for Health Care Philanthropy
Accordant is proud to be a member of The Giving Institute and Giving USA Foundation. We value this membership because it demonstrates our commitment to ethics, excellence and leadership in advancing philanthropy.
Each year, Giving USA Foundation, a public service initiative of The Giving Institute, shares data and trends about charitable giving. Accordant is pleased to share highlights from Giving USA: The Annual Report on Philanthropy for the Year 2023 and our insights as to how organizations can apply this knowledge to increase philanthropic results.
The data from this year’s report created mixed reactions. On one hand, we learned that all sources of giving in 2023 declined or remained flat when adjusted for inflation, despite $557.16 billion raised in total. On the other hand, five of the nine sub-sectors, including health ($56.58 billion), reached an all-time high even when adjusted for inflation. Let’s dig a little deeper into some data from the report:
Individual giving is still the largest source of total giving
Bequests continue to trend upwards, reflecting the demographic shifts; 77 million Americans are 60+ years old and will be reviewing how they can protect their charitable passions and avoid taxes as they age
Corporations remain the smallest source of giving but the fastest growing
Additionally, when adjusted for inflation:
Personal disposable income increased, up 3.8%
Giving by individuals decreased by 2.4%
Giving by foundations decreased by 2.3%
Giving by bequests remained flat at 0.6%
Giving by corporations decreased by 1.1%
Giving to the health sector grew by 4.4%
In a nutshell, this is what we learned: Giving dropped again—by individuals, by foundations and by corporations. Giving dropped across the board. The news is discouraging, so how do we move forward from here?
Still grappling with the aftermath from an unprecedented pandemic, along with political and economic unrest, health organizations are encouraged to see continued growth in charitable giving. We also see evidence that “change is the new normal.” As your health organization looks toward fine-tuning philanthropic plans, it must remain flexible, sustainable and include these key areas for consideration:
Individual Giving and Trust
With individual giving remaining the largest source of total contributions, now is the time to prioritize building trust and personal engagement with individual donors for sustained success. Looking ahead, change will be the constant. Demographic shifts, economic fluctuations and advancements in technology and artificial intelligence present both opportunities and challenges for philanthropic innovation. New engagement models are essential to build trust with diverse donors, starting with pipeline donors who contribute sustained, midlevel and monthly giving. Donor retention will be even more critical and will depend on cultivating personal relationships founded on trust, ensuring that donors understand their impact and feel valued. We saw megagifts drop to $14 billion (2% of overall gifts) and while we know we should focus on those with large capacity, that does not mean we lose sight of those who are loyal, recurring donors that help solidify and diversify our base..
Transformational Over Transactional Giving
If your organization’s focus has been on transactional rather than transformational giving, it’s time to reset and adopt a donor-centered approach that keeps donors engaged and committed. One of our current challenges is that organizational expectations are heavily focused on short-term returns, leading to a more transactional approach. This issue is compounded by high turnover in leadership roles within philanthropy organizations. The combination of short-term performance pressure, decreased trust and leadership instability creates a recipe for disaster. To address this, we need to reevaluate our organizations, redefine success and extend our horizon for considering success. By engaging executives and boards, we can rethink the role of philanthropy and establish more meaningful performance measures, ultimately enhancing donor engagement.
Donor Advised Funds
What exactly are donor-advised funds (DAFs) and why are they so important? A DAF is a fund established within a charitable organization that enables donors to make contributions, receive immediate tax benefits and recommend grants to charitable causes over time. It is no surprise DAFs are gaining popularity right now, especially in times of political and economic uncertainty. With tax structures in flux and many countries facing elections this year, individuals are using DAFs to protect their assets while still dedicating substantial funds to charitable purposes. The current boom in DAFs isn’t just among the wealthy; advancements in technology have enabled everyday employees to contribute $500 to $1,000. This accessibility has led to an increase in the number of DAFs and overall charitable contributions, with many people benefiting from corporate matches. This shift highlights the growing role of DAFs in facilitating widespread, impactful giving.
Philanthropy has transitioned from being a supplemental funding option to an essential financial resource…
While the 2024 Giving USA: The Annual Report on Philanthropy reveals some challenging data, it also provides critical insights to shape more effective strategies. Philanthropy has transitioned from being a supplemental funding option to an essential financial resource, transforming how health organizations finance capital projects and initiatives beyond hospital walls. However this report informs your future plans, Accordant is here to help you build sustainable strategies as the work around us continues to evolve.
About the Authors:
Betsy Chapin Taylor, FAHP, is CEO of Accordant. She can be reached at Betsy@AccordantHealth.com or through LinkedIn.
Pamela Ronka Maroulis, FAHP, CFRE, is President and Principal Consultant with Accordant. Pam can be reached at Pam@AccordantHealth.com or through LinkedIn.
Comments