Dale Bannon serves as the National Community Relations and Development Secretary for The Salvation Army.
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For those of us who work in the nonprofit space, the Giving USA report that came out this summer was a punch to the gut. The Indiana University Lilly Family School of Philanthropy summed up the findings with this headline: "Total U.S. charitable giving declined in 2022 to $499.33 billion following two years of record generosity."
On its face, I shouldn’t have been surprised given the historically generous response by donors during the crisis years of the pandemic, but it is rare to see a decline in giving year-over-year. In fact, the numbers were sobering:
• Giving was down 10.5% when adjusted for inflation.
• Giving by individuals dropped by 6.4%.
• Giving by corporations dropped by 3.4%.
The reasons for the decline are not surprising. During that time period, economic uncertainty remained high as the stock market dipped and inflation spiked. At the same time that people were taking a hard look at their own household finances, there also could have been a sense of “donor fatigue” after the urgent requests for help during the pandemic.
What Declining Donations Mean For Charitable Organizations
For charitable organizations focused on meeting need, the decline in donations is a double dose of a difficult reality. First, as need continues to increase, so does the decline in donations, causing nonprofit leaders to stretch dollars further to provide assistance. Second, charities and nonprofits are being hit with the same economic uncertainty and inflation as everyone else. That means it’s more expensive to continue to provide meals, shelter and utility assistance for the simple reason that everything costs more.
It’s certainly true that need during the pandemic received intense media coverage. At the same time, discretionary income actually increased for some people as a result of government subsidies and funding. From my perspective, those two factors—the extreme public need and the means to help—fueled the public response.
Today, we're seeing an interesting trend at The Salvation Army as it relates to giving: The total number of donors has decreased, but the average size of each gift has grown. That suggests to me that nonprofits like us must be even more intentional about finding new donors to help replace those who have given for decades or more.
We are in a moment where media coverage is less intense and government assistance has leveled off, making the situation more challenging. At the same time, we’re seeing new areas of need that are critical. For example, evictions are on the rise after a long government moratorium. During the pandemic, housing relief efforts led to a decline in the rate of unhoused people. But with evictions rising, so too could the rate of unhoused people, which could lead to a greater strain on social service organizations.
Even more daunting are emergency disaster services. As the recent destruction in Hawaii demonstrates, disasters are now in a perpetual cycle, with the destruction on an ever-greater scale and the impact on people increasingly expensive.
How Nonprofits Can Engage The Next Generation Of Donors
All of this makes the ongoing challenges of charitable organizations clear: How do we continue to engage the public by telling the stories of people in need in a compelling and dignified way?
To solve that problem, we must find new ways to reach the next generation of donors. By sharing a wide variety of stories about the new face of need, nonprofits can remind the public not only how important their generosity is but also how it helps such organizations provide assistance, comfort and hope. After all, the stories of our clients are the stories of our mission.
At the same time, we must be creative. Nonprofits can ensure there are ample (and easy) opportunities for younger donors to volunteer to demonstrate the growing need for volunteers in their community and the power of generosity. Nonprofits can also consider forming young professional organizations that create a culture of giving back and a space where members can take ownership and build opportunities of their own.
Do I think we will see increases in annual giving going forward?
I do. But I also believe the wisest nonprofit leaders know we can’t expect that growth to simply happen. We have to tell compelling, honest stories that connect with donors, make it easy for them to give and demonstrate the value and effectiveness of their gifts.
Looking Ahead
As we enter a new post-pandemic era, we must embrace new opportunities to help those most in need. Organizations that can break through today could be in the best position for the future.
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