Giving USA is a publication that reports on the sources and uses of charitable giving in the United States for over 60 years. Each year they publish “The Annual Report on Philanthropy,” which takes a deep dive into giving within the US. Their report covers areas of giving such as Corporations, Bequests, Foundations, and Individuals. As we read the most recent report for 2023, we can see there has been a change in the areas of giving.
Individual Giving
Individual giving has reigned as the top form of giving within the US, contributing to more than half of the giving within a year. For 2023, according to Giving USA, 67.2% of individuals gave $374.4 billion to nonprofit organizations. This was a mild increase from 2022 at $368.6 billion but a decrease from 2021 at $390.5 billion. Although the amount may fluctuate, individuals will consistently remain at the top of the giving list for two main reasons: personal fulfillment and tax benefits.
Bequests
Bequests are not as common as individual giving and only account for 7.7% or $42.7 billion of giving in 2023. This is an increase from 2022 ($40.7 billion) and 2021 ($41.3 billion). Bequests are donations that are given as part of a legacy and lasting impact “give” to ensure that their legacy continues to support causes they value after their death. This is often handled through their will with specific instructions for how the nonprofit organization is to handle the money. Bequests can also be used to reduce estate tax. By giving to a charitable organization, the taxable value on an estate can be reduced and lower the estate taxes owed.
Corporations
Coming in as the lowest section in 2023 are corporations at 6.6% or $36.6 billion of giving within a year. This is an increase from 2022 ($35.5 billion) and 2021 ($31.8 billion), which shows that businesses are taking more of an interest in impacting societal causes. For corporations, many donate through their Corporate Social Responsibility programs. This allows them to support charitable causes while improving their social image, strengthening their brand loyalty, and demonstrating their commitment to social and environmental issues. Please note, almost all major corporations have a foundation arm that gives to the community, and more are including community work opportunities for their employees. This helps boost employee morale and engagement by allowing their employees to support causes they care about.
Foundations
Foundations are the 2nd largest area of giving within the US, with 2023 showing 18.6% of foundations giving a total of $103.5 billion. This is an increase from 2022 ($101.8 billion) and a significant increase from 2021 ($88.9 billion). This shows that foundations have significantly increased their giving in the last two years. Most foundations are family-operated, which gives them the opportunity to expand funding as they see the need grow within the community.
For foundations, their giving is going to focus on mission alignment. Foundations are established with specific missions or goals, often focused on social, educational, environmental, or health-related issues. By donating to mission-aligned organizations, the foundation achieves its objective and maximizes its impact. It is important to note, most foundations want to support programs and services that an organization already has established with a history of success. This is a part of their strategic philanthropy flow, where they carefully select nonprofits to fund based on their potential for effective and long-term impact. By supporting well-run organizations, foundations aim to create meaningful and sustainable change in their areas of interest.
Conclusion
The 2023 Giving USA report highlights notable shifts in charitable giving across various sectors in the United States. Individual giving remains the dominant form of philanthropy, driven by personal fulfillment and tax benefits. Bequests, while less common, have seen a steady increase, providing lasting legacies and tax advantages. Corporate giving, although the smallest sector, is growing as businesses increasingly engage in social responsibility efforts to enhance their public image and employee morale. Foundations, the second-largest area of giving, have significantly increased their contributions, focusing on mission alignment and strategic philanthropy to achieve long-term impact. Overall, these trends reflect a dynamic and evolving landscape of charitable giving in the US.
Now that you understand giving trends within the US, its time to ensure your fundraising strategy aligns with the proper funding opportunities. As a BryteBridge Connect member, our consultants can assist in building a comprehensive funding strategy that provides the organizations with financial stability to carry out the mission.
As consultants, BryteBridge Nonprofit Solutions is here to help you navigate the “Giving” journey and unlock your nonprofit’s full potential for financial stability. For more information, join BryteBridge Connect Membership for Live Bootcamps, Webinars, and classes. Speak to a BryteBridge Consultant today by calling 877-857-9002.
