Changes to the Giving Landscape: Giving before and after the Great Recession
The share of households that give to charity declined 13 percentage points from 2000 to 2016, according to a new report examining giving before and after the 2008/09 recession. This report was researched and written by the Lilly Family School of Philanthropy.
According to the researchers, “The percent of households who gave stayed fairly stable from 2000 to 2006, but then began declining in 2008.
The Recession seems to have had an impact on household giving. The percent of households that give has been declining since then and we have yet to see a rebound.” (emphasis added)
The researchers, Chelsea Clark, Ph.D., and Xiao Han, found that different factors impact the percent of household income given to charity.
“There are certain segments of the population who give a higher percentage of their income. People with higher incomes and more wealth tend to give more than people with lower incomes and less wealth. Older generations tend to give a higher percent of their income compared to younger generations.
“Some demographic groups gave three to five percent of their income, while others gave half of a percent. But overall, this balances out to around two percent when you study the full picture.
“There weren’t significant differences in the percent of household income given from the pre- to post-Recession period based on race and gender. Instead, we found that economic variables had more of an impact on changes to giving,” Clark explained.
Encouragingly, the overall average percentage of income given by all households remained relatively stable from before to after the Great Recession.
“Most of the decline in the percent of households who gave might have been driven by declines in income, or by households who stopped giving or never formed a habit of giving, during the Recession era. In terms of the percentage of income given, that stayed relatively stable over the years,” Han said.
In other words, households who continued to give from before to after the Great Recession continued giving a similar percentage of their incomes, even if their income dropped during this timeframe.
It’s an important finding for fundraisers and other nonprofit practitioners to take note.
“Households who continued to give, gave consistently, even under difficult economic conditions,” Clark said. “Even though the Great Recession was the biggest economic downturn since the Great Depression, many people didn’t stop giving. The dollar amount they gave may have changed, if income decreased, but most people gave a consistent percent of their income, even during hard times.
“For nonprofit practitioners, it’s important to note that you can keep fundraising, even during a Recession. You don’t have to be worried that all of your donors will completely stop giving.
“Giving can become a habit. Even if the economy is hit hard, some people will not change their giving behaviors dramatically.”
The two researchers also emphasized throughout the report that other factors do influence giving besides the economy.
“We discussed the decline in religiosity in the U.S., because people who are more religious not only give more to religious causes, but they also give to secular causes at higher rates. As a result, it’s a concern that as Americans become less religious, they may also become less charitable, impacting philanthropy,” Clark said.
The report, Changes to the Giving Landscape, was funded by the Vanguard Charitable’s Philanthropic Impact Fund.