Americans got less generous in 2022, as soaring inflation and the slumping stock market took a significant toll on charitable giving.
Total giving fell to $499 billion, down 3.4% from a record year of donations in 2021, according to Giving USA 2023: The Annual Report on Philanthropy for the Year 2022, released Tuesday.
It was only the fourth time in the last 40 years that Americans donated less than they did the prior year, before inflation adjustments, according to the report, a publication of Giving USA Foundation, 2023, researched and written by the Indiana University Lilly Family School of Philanthropy.
When adjusted for inflation, giving in 2022 fell 10.5%.
Stock market declines weighed on donors, according to the report. Notably, the S&P 500 plummeted toward the end of the year, when a large share of charitable giving takes place. Also, 40-year high inflation rates took a toll, it found.
Generous giving early in the pandemic
Last year's drop in donations comes after two very strong years of charitable giving. Contributions topped half a trillion dollars for the first time in 2021, totaling nearly $517 billion, buoyed in part by a stock market rally.
Donors supported causes to address the Covid-19 pandemic, economic crisis and racial justice in 2020 and 2021.
In 2022, individuals, who provide the largest share of giving, curtailed their donations even before adjusting for inflation. Contributions from foundations, corporations and estates all fell after accounting for inflation.
Six individuals and couples gave nearly $14 billion, the report said. Very large gifts from some of the richest Americans represented nearly 5% of individual donations for the second year in a row.
International affairs and foundations were the only sectors that saw inflation-adjusted growth in giving last year. Support for Ukraine likely drove increased international donations.
Which charitable sectors suffered? Contributions to religion, education, human services, health and the arts, among others, all fell after taking inflation into account.
"Declines in giving like those we saw in 2022 have a tangible impact on nonprofit organizations, especially those that rely on charitable dollars to support their daily work," said Amir Pasic, the school's dean. "Nonprofits and donors alike experienced the steady, negative impacts of inflation such as the growing cost of goods and high interest rates throughout 2022, and many of those challenges remain."