Americans across racial and ethnic lines turned away from traditional philanthropic outlets between 2000 and 2018, according to a new report. Notably, they are pulling back from donating to religious causes, in part due to demographic changes and diminishing trust in the institutions.
The changes are across the board: giving rates, which started at a high point of around 70% participation at the beginning of the 21st century, now stand at below 50%.
The report, The Giving Environment: Giving Trends By Race and Ethnicity, is the latest installment of the Lilly Family School of Philanthropy at the University of Indiana Everyday Donors of Color research series. It does not include the time of the coronavirus pandemic, when nonprofit needs were highlighted and consumer spending options, especially for travel and entertainment expenditures, were diminished. It does include boom times, as well as the Great Recession of 2008-2009, and more notably reflects a fairly consistent trend of giving decline.
The Great Recession accelerated pullbacks from philanthropy across racial lines. During the pre-Great Recession period (2000-2006) philanthropy among Asian Americans rose by eight percentage points, but between 2008 and 2018 giving among that cohort fell 21 percentage points. Giving within the Hispanic community increased two percentage points in the pre-Great Recession period but plummeted 23 percentage points afterward.
Funding among Black Americans which had slipped by 1.5 percentage points between 2000 and 2006, accelerated to a 14-percentage-point drop through 2018. Only American Indians, whose giving rates had fallen 11 points before the Great Recession, slowed the losses afterward: this cohorts giving slipped by 7 percentage points during the post-Great Recession period.
Declines in religious giving outstripped those for secular giving during the full 2000-2018 period. Hispanic American donors pulled back their religious giving by 18 percentage points, compared with cutting their secular giving by 11 percentage points. Black Americans cut their religious funding by 17 percentage points while trimming their secular giving by 11 percentage points.
Asian Americans also cut their religious giving by 17 percentage points, while pulling back their secular giving by only six percentage points. And American Indians cut their giving nearly equally: this cohort pulled back its religious giving by 25 percentage points and its secular giving by 24 percentage points.
Religious donations still made up a higher percentage of donations, however. Overall, Black Americans tithed an average of 3% of their income to religious causes, compared to 1.3% of their income to secular outlets. American Indians put 2.7% of their income toward religious institutions, but only 0.9% of their income to other causes. Asian Americans earmarked 1.9% of their income to religious causes and 1% to other outlets, and Hispanic Americans put 1.5% of their income toward ecumenical concerns and 0.9% of their income to secular outlets.
While the Great Recession might have been responsible for some tightened purse strings, other factors played into the giving changes as well. “Older households had a stronger commitment to giving,” Una Osili, associate dean for research and international programs at the Lilly Family School of Philanthropy and lead at the Philanthropy Project Team that produced the report, told The NonProfit Times. “They also had higher levels of trust and embeddedness in local communities. Younger Americans have much lower levels of trust in institutions. They also are less likely to do a lot of the things correlated with charitable giving, like being part of a religious congregation, buying a home or having a family.”
When younger donors do give, their largesse is more likely than previous generations to flow to emerging concerns such as environmental nonprofits. “We also see an increase in giving to community-based organizations because people know them, they trust them, they’re proximate to the [donor’s] community,” Osili said.
Younger generations may also have notions of philanthropy that go beyond merely giving to established 501(c)3 organizations. Some may be giving to smaller, less-established nonprofits, and their funding data would not have been scooped up by the analytics that fed into the report. And others may be making contributions in nontraditional ways.
“For many nonprofits, thinking about how to engage in more diverse ways with [younger] donors and thinking about entry points for a more diverse group of future donors [is critical], whether that’s engaging them as volunteers, building advocacy campaigns or helping them get to know the organization,” Osili said. “Then, as part of that larger notion of what it means to be a donor, expanding that definition. And as part of that, thinking about how to engage them as donors financially.”
The main findings of this report are based on the Indiana University Lilly Family School of Philanthropy’s Philanthropy Panel Study (PPS). PPS is the generosity module of the longitudinal panel study of the University of Michigan’s Panel Study of Income Dynamics (PSID). PSID was launched in 1968 and is the longest-running longitudinal survey among U.S. households. It is a nationally representative sample of the U.S. general population, initially including more than 18,000 individuals and 5,000 households.
In 1997, samples were updated to reflect the changes in immigrant demographics. More specifically, two major changes were made: 1) the core sample was reduced, and 2) a refresher sample totaling 511 households was introduced to better reflect post-1968 immigration demographics. With acknowledgment of the changing immigration demographics in terms of size and composition, PSID undertook a major project to refresh the 2017 immigrant sample. The main goal of these multiple changes was to provide a nationally representative sample; these changes did not oversample for any one specific subgroup. PSID data is publicly available to all researchers.
A full copy of the report, along with related infographics, is available here: https://philanthropy.iupui.edu/research/current-research/donors-of-colors.html
