Report Projects Growth in Charitable Giving in 2019-20

Report Projects Growth in Charitable Giving in 2019-20

According to a report from the Indiana University Lilly Family School of Philanthropy and consulting firm Marts & Lundy, charitable giving in the United States is expected to increase 3.4 percent in 2019 and  4.1 percent in 2020, exceeding historical ten-year, twenty-five-year, and forty-year annualized averages.

The Philanthropy Outlook 2019 & 2020 projects growth rates of 2.1 percent in 2019 and 3.4 percent in 2020 for giving by individuals; 7.0 percent and 6.1 percent for giving by foundations; 5.4 percent and 5.6 percent for giving by estates; and 3.2 percent and 2.6 percent for giving by corporations. According to the report, strong growth in giving is projected in the areas of education (3.5 percent in 2019 and 5.7 percent in 2020) and health (5.2 percent and 4.4 percent), while giving to public society benefit nonprofits (1.3 percent and 4.0 percent) will see slower growth.

The study offers three scenarios for giving based on economic growth projections and the effects of the 2017 Tax Cuts and Jobs Act. Under an "uneven growth scenario," in which tax cuts for corporations and the wealthy boost the economy but do little to boost wages for average Americans, individual/household giving would grow — given that high-net-worth individuals/households account for a large share of giving — while corporate philanthropy might be negatively affected, especially if overall consumer sentiment declines. Under a "flat growth scenario," overall giving would remain flat or even decline as donors, still unclear about how to maximize the benefits of their giving under the 2017 law, decide to delay some of their giving. And under an "economic downturn scenario," the positive impact of the tax cuts would fade after the first two years, resulting in a decline in charitable giving across the board.

"A multitude of factors are influencing the prospects for charitable giving in 2019 and 2020, including the macroeconomic climate, the potential for the current government shutdown to affect the economy, stock market volatility, and donors’ responses to the 2017 tax policy changes," said Una Osili, associate dean for research and international programs at the Lilly Family School of Philanthropy. "Although no one can know exactly how the interaction of these factors will impact giving in the next two years, The Philanthropy Outlook includes measures to account for their potential effects."

"New Study Predicts Charitable Giving Will Increase in Each of Next Two Years." Indiana University Lilly Family School of Philanthropy and Marts & Lundy Press Release 01/23/2019.