Charitable giving in the U.S. is predicted to grow by 4.2% in 2024 and 3.9% during 2025 in inflation-adjusted terms, according to The Philanthropy Outlook 2024 & 2025. The report is researched and written by the Indiana University Lilly Family School of Philanthropy and presented by CCS Fundraising.
Changes in total giving for the years 2024 and 2025 are predicted to exceed the most recent 10-year, 25-year, and 40-year annualized averages for growth. In general, increases in the U.S. economy, as reflected in the value of stocks, Gross Domestic Product (GDP), and household income, will lead to a rise in philanthropic giving in 2024 and 2025, according to researchers.
The researchers predict that giving by individuals, the largest percentage of giving, will be 63.1% for 2024 and 62.8% for 2025. According to data in the most recent Giving USA report, published last year with data from 2022, giving by individuals was 64% of all philanthropy.
“This widespread anticipated growth is driven by economic factors that have long been associated with charitable giving, such as growth in the stock market and rising household income and wealth,” according to Amir Pasic, Ph.D., the Eugene R. Tempel Dean of the Lilly Family School of Philanthropy via a release. “As we reach the halfway point in a decade that started off with several historic events, we expect to see a return to established patterns in giving.”
The researchers noted that the philanthropic sector is diverse, and charitable organizations working in disparate fields or regions might have experiences that differ from the overall national picture.
The Philanthropy Outlook uses empirical data to develop year-to-year inflation-adjusted growth rates for total giving and giving by all four donor sources: households, foundations, estates, and corporations. The report describes how different economic variables impact giving by each source and explores conditions that may affect the outlook for giving.
“This report can serve as a planning tool for nonprofits and fundraising leaders. With American generosity expected to expand in the coming years, it is important for nonprofits to put a strategy in place and to stay up-to-date on the factors that could impact this outlook,” said Peter Hoskow, principal and managing director of CCS Fundraising.
The study’s key findings include (all growth rates are reported in inflation-adjusted terms):
* Total charitable giving is predicted to grow (4.2% in 2024 and 3.9% in 2025), rising above the historical 10-year, 25-year, and 40-year annualized average rates of growth.
* Giving by households is predicted to grow (2.6% in 2024 and 3.4% in 2025) but will trail the rate of growth for total giving.
* Giving by foundations (10.3% in 2024 and 5.3% in 2025) is expected to experience strong growth, outpacing growth rates for total giving in 2024 and 2025. The growth rate in 2024 is above the historical 10-year, 25-year, and 40-year annualized average rates of growth, while the rate in 2025 is slightly below those averages.
* Giving by estates is predicted to grow (2.7% in 2024 and 5.5% in 2025). The growth in 2025 is above the historical 10-year, 25-year, and 40-year annualized average rates of growth.
* Giving by corporations is also projected to grow (1.9% in 2024 and by 2.6% in 2025) but will lag historic rates of growth for this sector.
Projections for giving are based on econometric models. Changes to the variables used in the models have the potential to change the outlook for giving, according to researchers.
The past few years have been characterized by an unusual combination of circumstances, including the COVID pandemic, the movement for racial justice, large fluctuations in the stock market, and high inflation rates. To forecast charitable giving in this complex landscape, researchers tested 19 unique variables to find the combination that they believe had the greatest predictive accuracy for the next two years, according to the report’s authors.
Researchers project that in general, growth in personal income for all types of households will positively impact total giving in 2024 and 2025. Growth in the previous year’s S&P 500 influences certain types of giving for the subsequent year, especially giving from foundations. Other factors that will positively influence total giving in 2024 and 2025 include growth in consumer sentiment and growth in the current year’s S&P 500.
