During the now nearly two-year-long COVID-19 pandemic, very few (if any) businesses have remained unaffected. From the automobile to technology to grocery industries, everyone was forced to adapt and innovate. Consider just a couple of what could be many examples—for instance, the rapid rollout of curbside orders for restaurants, or the sudden steep increase in demand for at-home workout equipment. Consumer needs shifted and brands responded by thinking quickly and creatively. And for some of these industries, what were once thought of as temporary solutions are now long-term strategies that are here to stay. Not immune from these sudden requirements for change are nonprofits and other fundraising organizations, which have also been significantly impacted by the events of the last two years.
In a field that relies heavily on making and developing personal connections, global shut-downs and stay-at-home orders forced fundraisers to think on their feet. Seemingly overnight, everything from in-person meetings to annual galas to charity walks and runs were canceled. Questions also arose as many people began to face financial uncertainty due to the unknowns of the global economy and unexpected job loss.
So, with all of this in mind, how has charitable giving since the pandemic began in 2020 stacked up to past trends?
Perhaps surprisingly and despite significant disruption and economic ambiguity, Americans responded generously, giving $471.44 billion in 2020—a 5.1% increase from the previous year. (1) Laura MacDonald, CFRE, chair of Giving USA Foundation, as well as Principal and Founder of Benefactor Group, said this:
“Unprecedented developments in 2020 including the global pandemic, the ensuing economic crisis, and efforts to advance racial justice created intense, widespread need and significantly increased the demand upon nonprofit organizations. Remarkably, generous giving coupled with the stock market turnaround in the final months of the year boosted contributions. As a result, 2020 is the highest year of charitable giving on record.”
Allowing this to be the case were a couple of factors. First, many high-income and wealthy households were shielded from the financial impacts of the pandemic. In many cases, this demographic’s jobs were not just protected, but boomed, yielding plenty of income to then give to organizations and individuals in need. Secondly, as MacDonald explained, the passing of the CARES Act and the prospect of a vaccine rollout in the second half of 2020 gave markets the boost needed to encourage more significant giving. In fact, in the latter part of 2020, the S&P500 grew 16.3% and personal income grew 6.3%. This timing worked in favor of nonprofits and other charitable organizations, as the bulk of giving occurs toward the end of a typical year.
So, one thing seems clear—when people are financially able, they respond in force to the urgent needs around them. However, as the world continues its trend toward “the new normal,” this rate of giving is unlikely to hold. The global nature of the crisis and the urgent need for relief and solutions spurred people to increase their charitable gifts, but for many, this is beginning to feel less necessary. (2) Thus far, comprehensive giving data for 2021 is not readily available, but some early survey results indicate that many people do not plan to maintain the level of giving seen in 2020. In fact, 67% of donors planned to give the same or less in 2021 than the year prior. In essence, what we saw in 2020 was a crisis response to the global pandemic, racial unrest, and economic crisis that—for most—will not be sustained.
What, then, do nonprofits do next? Some organizations have struggled to fundraise over the last two years, while others experienced a significant infusion of donations. In both scenarios, these organizations have likely been searching for and trying out new methods for fundraising. Glimpses of innovation have emerged, with shifts to things like virtual galas and even 5Ks, quick development of products for purchase as a means to fundraise, and online networking. To capitalize on this one-time surge in donations, or to revive their organization from a couple of years of financial difficulty, nonprofits must continue this trend of innovation, continuing to try new tactics—particularly in the technology space.
At Atticus, this is where we believe we can help. For those nonprofits who did experience that boost, our technology can turn those one-time donors into long-term partners. Your donor database may have an influx of new names, which we see as a well of potential. And for those who may be at a loss when it comes to finding new donors, we can help too. With Atticus, you’ll be able to identify individuals whose values match those of your organization and who have a high giving potential. You can see how and through whom those individuals are connected to your organization—taking what is, at first, simply information on your screen and turning it into a meaningful, face-to-face relationship. So, although much has changed about how organizations fundraise, we believe there are more opportunities than ever to connect you with the people who care about your cause and who can help you further it. We see a chance for change and innovation, and we see a smarter way to do good—let’s do it together.
1. Lilly Family School of Philanthropy. (2021, June 15). Giving USA 2021: In a year of unprecedented events and challenges, charitable giving reached a record $471.44 billion in 2020. Philanthropy Network Greater Philadelphia. Retrieved January 25, 2022, from https://philanthropynetwork.org/news/giving-usa-2021-year-unprecedented-events-and-challenges-charitable-giving-reached-record-47144
2. Fidelity Charitable. (2021, August 1). What Comes Next: How COVID-19 Will Influence Giving in 2021 and Beyond. Fidelitycharitable.Org. Retrieved January 25, 2022, from https://www.fidelitycharitable.org/content/dam/fc-public/docs/insights/2021-covid-19-and-charitable-giving.pdf 