Giving was 0.7% below the inflation-adjusted all-time high of $488 billion in 2020 – when donors responded to the onset of the COVID-19 pandemic, the ensuing recession and an outpouring of concern over racial injustices.
As two of the leadresearchers who produced this report, we found that inflation changed how far each charitable dollar went in 2021. We also saw that a significant percentage of giving came from extremely large gifts and that many charities whose 2020 donations declined may have experienced a rebound.
However, higher inflation, particularly over time, can influence other economic trends that are more likely to influence how much money is donated. Those changes, in turn, can lead to declines in giving.
Some of the largest donations made in 2021 went to donor-advised funds, financial accounts known as DAFs.
Two billionaires who took that route were Twitter co-founder and former CEO Jack Dorsey and SpaceX and Tesla CEO Elon Musk.
Donors who transfer money into DAFs get big tax deductions right away but can decide which causes to support later. That’s similar to what happens when someone moves wealth into a foundation.
But while foundations are required to report every grant they make, all the money distributed to a particular charity from DAFs that are held at the same DAF-sponsoring organization is lumped together. This makes it impossible to separate out one individual’s support for specific causes. As a consequence, some donors may prefer to give through a DAF rather than a foundation for the anonymity.
We expect transparency to be an important issue for our research in the future. As megagifts grow as a share of individual giving, it is important to understand how much megadonors are giving and where the dollars are going.
A rebound for the arts
Giving to the arts, culture and humanities rose by 22% in 2021 as many museums, theaters, ballet companies and other arts groups resumed in-person events and found ways to continue to make use of hybrid events. That growth, the biggest for any of the nine categories we track, marked a sharp reversal from 2020, when those gifts fell 7%.
Similarly, gifts related to health, a category that includes donations to hospitals, grew 2.9% in 2021 after a 6.9% decline a year earlier.
Conversely, gifts slated for colleges, universities and other educational causes fell 7.2% in 2021, following a 15% increase in 2020.
Overall, giving in 2021 stayed well above pre-pandemic levels. The total donated was at least 5% higher than in 2019 for seven of the nine categories we track.
The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.