If you’ve been keeping up with recent headlines about philanthropy, you may have noticed that 2022 was a down year for charitable giving. The economic challenges experienced in 2022, such as high inflation and turbulence in the stock market, left some with less disposable income to allocate toward charitable causes. The 2022 results follow the two best years on record for charitable giving, notably in 2021 when giving surpassed $500 billion for the first time. This situation has increased the need for critical support in all corners of philanthropy.
However, amidst these challenges, there are encouraging developments on the horizon. At a recent Nonprofit Connect program, Dr. Una Osili from the Lilly Family School of Philanthropy at Indiana University shared insights from the Giving USA report and shed light on future philanthropic trends that offer hope for the charitable sector.
Periods of growth often follow economic declines, as indicated by the current increased GDP and record-low unemployment rates. Improved financial stability directly correlates to increased charitable giving, as more people have the resources to support themselves, their loved ones and philanthropy.
The rise of trust-based philanthropy is reshaping the relationships among donors, nonprofit organizations and the individuals they serve. Philanthropy is increasingly embracing trust-based principles, like providing general operating support and more transparent communication. By emphasizing trust and collaboration, this approach aims to create stronger partnerships that positively impact affected communities and charitable causes.
Donor-advised funds are the fastest-growing charitable vehicle, offering the flexibility to earmark assets for charity and maximize tax benefits. National Philanthropic Trust’s new report shows how donors with donor-advised funds are prepared to give during times of crisis. These types of funds provide donors with a reserve of charitable assets for grantmaking. As such, they can help insulate nonprofits from harsh economic conditions. In fact, studies show that donor-advised fund grantmaking increases when the Dow Jones Industrial Average has declined or remained flat.
If anything, these trends and insights underscore the resiliency of the nonprofit sector. It is impressive to watch how nonprofits adapt to make their budgets stretch. What’s even more encouraging is that funders are now requiring less reporting and fewer restrictions, which empowers nonprofits to use the funds for the areas of greatest need. As we look forward to the new horizon of philanthropy, Greater Horizons will continue to actively support our donor’s giving by keeping them updated on philanthropic trends and nurturing their commitment to support the causes closest to their hearts.
Authored by: Nicole Stuke, Senior Philanthropic Advisor