Insights from 2023 Giving USA: The Annual Report on 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 the 2023 Giving USA: The Annual Report on Philanthropy and our insights as to how organizations can apply this knowledge to increase philanthropic results. Some highlights from this report include the following:
For the first time, the number of donors AND overall dollars are down.
One in five gifts is from foundations. Corporations showed the strongest growth rate.
Inflation has impacted giving, with overall giving falling below 2% of GDP.
Giving to health is a bright spot; up 5.1%, on pace with giving to religion.
$14 billion in transformational gifts represent 5% of individual giving.
Innovation is driving giving for Millennials and GenZ.
Let’s dig a little deeper:
Giving fell by $17.3 billion and to 1.8% of GDP
The highest period of inflation in the past 40+ years, a lagging stock market and an uncertain economy put a damper on charitable giving in 2022. Giving was down 3.4% in current dollars and more than 10% when adjusted for inflation. A decline in 2022 comes after the two best years on record in 2020 and 2021. Even though the U.S. GDP grew 9.2% (1.1% adjusted for inflation) and unemployment reached record lows, the pressure on stock markets, rising interest rates and resulting inflation created burdens on disposable income, translating into fewer donors and dollars.
Individual giving is shifting to family and individual foundations
In the past 40 years, growth of giving from foundations (9.8%) is nearly double the growth of giving by individuals (4.9%). Foundations now represent 21% of all giving.
Transformational gifts represent 5% of individual giving
Individual giving made up the majority of giving at 67%, and transformational or mega gifts represented $14 billion, or more than 5% of individual giving. As the wealth gap increases, transformational gifts will become a larger share of individual philanthropy. The increase in these gifts represents a bright spot for organizations with these types of strategies and capabilities in place.
Giving to health organizations grew by 5.1%, on pace with religion and ahead of education
Generosity toward health-related organizations continued to grow after the COVID-19 pandemic. While overall giving was down more than 3.4% (10.1% inflation-adjusted), health-related giving was up 5.1% in current dollars and down just 2.6% when adjusted for inflation.
Innovation and flexibility continue to drive results
The innovation and creativity of the pandemic years continue to impact certain audiences and continues to show impressive results—especially among Millennial and GenZ donors. More than 75% of Millennials and GenZ donors gave online in 2022. Donors continued to reward flexibility and innovation as nonprofits embraced virtual events, cryptocurrency and donor-advised funds. Social media events, Facebook Live fundraisers, Zoom meetings and other techniques are here to stay. In the future, donors will respond to new ways to support the causes they care about most. Now is the time to implement these avenues and more.
What does this mean for hospitals and health care?
Coming out of 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:
Reinvest in efforts to grow your donor base. Fewer donors and fewer charitable dollars signal an opportunity to re-evaluate your organization’s outreach strategies and activities. The contraction of 2022 might simply be a blip after two years of growth and tough economic times. However, the long-term benefit of investing in the growth of your donor base will far outweigh the risk of ongoing shrinkage of donors and gifts. Over the past year, and especially during the pandemic, most organizations have focused on increasing efficiency by shifting efforts from events, annual funds and other base-building activities to cultivating major donors. While bringing back all galas, 5Ks and golf tournaments is not the answer, now is an ideal time to consider more focus on grateful engagement, mid-level giving, social media, online giving and other new gateway strategies to expand your donor pipeline.
Accelerate your donor relationship, donor retention, donor renewal and grateful engagement efforts. The trend of fewer overall donors has likely challenged your efforts to increase general donations in recent years, especially with the economic headwinds of 2022. Health care philanthropy teams must increase their efforts to retain existing donors by fostering authentic and meaningful relationships. In the coming months and years, you must focus on intentionally deepening the relationships we already have with donors of all magnitudes. It’s possible you may be starting to exhaust your current donor portfolio with repeated non-meaningful outreach. It is also possible you have not been attentive enough to the donors signaling they would like to know your organization better. How can you address these? There are strategic ways to better engage donors and prospects, while also reducing donor burnout. Reimagined grateful engagement strategies are just one way to help health organizations build more authentic relationships while broadening the giving appeal of patients and families. These and other engagement strategies prove viable ways to shore up donor pipelines.
Frame your cause to appeal to foundations. The increase in foundation giving may simply be a mechanism individuals are using to better manage their charitable giving, yet gift decisions may still come down to one person or a set of family members. It is crucial to remember creating a foundation is a thoughtful process, and even family foundations are usually designed with specific social goals in mind. How your cause fits with these goals is critical. Passion and purpose must be aligned. Communications and data teams must craft cases for support that clearly demonstrate the potential impact foundations are set up to support. Strategic communication strategies and data-informed initiatives help reduce donor fatigue and enhance donor relationships, fulfillment and giving.
Build on the current support of health. Coming out of the pandemic, the interest and support for health could be at an all-time high. The world saw firsthand the dedication and caring of health care workers and the power of research and health science. Reaction and response to COVID-19 demonstrated what could be done when resources and efforts are integrated, coordinated and applied. Health-related organizations must build on this momentum and support by helping communities envision the future when they come together, specifically through the lens of community health drivers. Capitalize on this environment by creating community-focused campaigns that connect donor passion and generosity to enhance well-being and health of entire communities.
Connect the community to your charitable mission. Giving USA found only 5.4% of Americans recognize when a nonprofit organization has helped them or someone they know. The communities you serve are simply not connecting with your charitable efforts or may not even be even aware of your mission. Even though they may be directly affected, patients, families and the overall community often do not understand that enhanced facilities, advanced treatments and life-saving research are often funded by philanthropic dollars. Identifying priorities, implementing continuous campaigns and communicating these are crucial in the understanding of health missions and the alignment between organizations and communities.
Make giving “frictionless” through innovation. Today’s commerce is focused on eliminating friction. On-demand streaming, home delivery, ridesharing and software-as-a-service are all efforts to capture market share by making spending easier. Philanthropy must push to eliminate friction while making giving easier and more meaningful at the same time. Robust monthly giving programs are mandatory and journey automation is increasingly more important. Innovative giving, such as giving through gaming, digital products, in-app donations, corporate partnerships and giving subscriptions are all areas currently being explored and implemented. If giving to your organization still requires multiple steps, complex online forms, downloadable PDFs or other friction points, it is time to focus on identifying ways to ease organizational giving while still providing meaningful impact.
While the 2023 Giving USA: The Annual Report on Philanthropy provides some disheartening data, it also provides information that can steer us to better, more purposeful strategies. Philanthropy is no longer just a nice-to-have funding option. Philanthropy is now a must-have financial resource that is helping to change the way health organizations fund not only capital projects but also initiatives outside the walls of the hospital. How can this new report help you plan your next moves? How can Accordant partner with you to make your new strategies more effective, efficient and impactful?
About the Authors:
Pamela Ronka Maroulis, FAHP, CFRE, is President and Principal Consultant with Accordant, specializing in building relationships and helping donors support their passions. Pam can be reached at Pam@AccordantHealth.com or by connecting through LinkedIn.
Debbie Ferguson, CFRE, is a Senior Consultant for Philanthropy Operations and Data with Accordant. She specializes in best practices for data solutions, integration and governance as well as patient program evaluation, creation and development. Debbie can be reached at Debbie@AccordantHealth.com or through LinkedIn.