This month, the Fundraising Effectiveness Project (FEP) released its Quarterly Fundraising Report examining charitable giving trends in the first half of 2022. The report revealed several troubling findings for the charitable sector, including a drop in donations and donors compared to last year.
The report found that fewer Americans are donating to charity, with the number of donors dropping 7 percent in the first half of the year compared to the first half of 2021. This decline in donors marks a continuation of a troubling, decades-long trend that has seen the number of American households donating to charity fall from roughly two-thirds of households in 2000 to less than 50 percent in recent years. FEP indicates the biggest decline came from smaller donors. Those giving between $101 and $500 declined by 8 percent, and donors giving below $100 declined by 17.4 percent.
It’s possible this decline is related to the expiration of the charitable deduction for non-itemizers. For the past two years, there was a non-itemizer charitable deduction in place, capped at $300 in 2020 and $300 for individuals and $600 for joint filers in 2021. With the non-itemizer deduction in effect, nonprofits saw a sharp increase in giving from smaller dollar donors. However, the provision expired at the end of 2021, and since, giving from smaller dollar donors has dropped precipitously.
Like the number of donors, the amount of donations declined as well. While the report found charitable giving was up 6.2 percent compared to the first half of last year, giving did not keep pace with the approximately 8.5 percent inflation rate in the second quarter. This underscores how inflation is blunting the impact of charitable giving and diminishing the value of each dollar donated to a nonprofit. And the outlook ahead is no less perilous, with recent polling indicating nearly 50 percent of voters who are “very concerned” about inflation plan to give less to charity this year than they did last year.
To reignite giving from smaller donors and provide nonprofits with the resources to weather the storm of inflation and respond to recent disasters, the Charitable Giving Coalition is working with the sector’s champions on Capitol Hill to renew and expand the non-itemizer charitable deduction. The Universal Giving Pandemic Response and Recovery Act (S.618, H.R.1704) would renew the non-itemizer charitable deduction and increase the cap to one-third of the standard deduction, or about $4,000 for single filers and about $8,000 for joint filers. To build momentum for the bipartisan bill in hope of getting it included in year-end tax legislation, the CGC is hosting a DC Fly-In next month. You can find more information about the Grow Giving Now Fly-In and register for it here!