Charitable Giving During the Pandemic: America Hangs On

Do Americans tend to maintain their charitable giving during hard times? In particular, have they continued to give during the pandemic and the subsequent economic downturn? As an attorney practicing nonprofit law, I have observed an increase in the number of requests to set up section 501(c)(3) nonprofits. These requests suggest that overall giving is up, or at least the desire to help others has become more widespread.

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Based upon a September 2020 study by the Women’s Philanthropy Institute, a part of Indiana University’s Lilly Family School of Philanthropy, charitable giving is largely holding up. But donations are at a lesser level than in past catastrophes, given the scale and length of time of the pandemic/economic crises.

Methodology of the Study

The data underlying the study originated in a survey by the Women’s Philanthropy Institurte. The Institute conducted the survey online among 3,405 respondents sampled in mid-May 2020. At that time, the pandemic had begun causing massive lockdowns. The study authors emphasize that the data represent a snapshot of charitable giving habits. Unfortunately, the early months have turned out to be only the beginning of COVID-19’s spread.

Five Key Findings About Charitable Giving

The Institute made five key findings about charitable giving during the first months of the crises. They are:

Finding 1: Around one-third of U.S. households gave directly to charitable organizations, individuals, or businesses in response to the COVID-19 pandemic during the initial months of the crisis.

The giving included cash or in-kind goods that donors gave to charitable organizations, individuals or businesses. More than two-thirds of households participated in the giving.

Finding 2: Nearly half of households engaged in indirect charitable giving in response to the pandemic during the early months of the crisis (for example, by ordering takeout to support restaurants and their employees, or continuing to pay individuals and businesses for services they could not render).

Nearly half of givers donated indirectly by ordering take-out food from restaurants at risk of failing or continuing to pay individuals and businesses for services they were unable to provide. The data suggested that younger and more diverse donors tended to participate in this type of charitable giving.

Finding 3: The majority of U.S. households’ charitable giving stayed the same during the initial months of the COVID-19 pandemic; however, those who reported changes were more likely to say their giving decreased rather than increased as a result of the crisis.

A majority of households did not change their level of charitable giving, although those that reported changes reported a decline. Charitable giving focused more on basic needs and health than previously.

Finding 4: Households were more likely to decrease than increase their charitable giving as a result of conditions present during the early months of the pandemic (such as uncertainty about the spread of the virus and further economic impacts).

The data underlying this finding were much the same as for Finding 3. Donations tended to stay the same, but if there were changes, they resulted in a decline in charitable giving.

Finding 5: Single women were more likely than single men and married/partnered couples to decrease their charitable giving as a result of specific elements of the COVID-19 pandemic during the initial months of the crisis.

The study surmises that more single women than men or couples can find themselves in more precarious financial situations. Thus, they are less able to give, or at least to give money.

Implications for Charitable Giving

In its final section, the Women’s Philanthropy Institute discussed the implications of the study.

  • It is a positive sign that most households did not lower the amount of their donations during the first months of the pandemic. This sign suggests that charitable giving is an ingrained habit that will endure the crises.
  • Nonprofits that wish to encourage ongoing giving should be sure to communicate to potential donors what they are doing to help during the crises and when a potential donor should consider giving.
  • Charities should embrace virtual events, and eventually virtual/hybrid events, to create and maintain a sense of community. That sense of community is crucial for giving, especially among women donors.
  • The crises have resulted in lower monetary charitable giving among women, doubtless caused by economic uncertainty and community shutdowns. Yet giving not involving cash always has been more prevalent among women. Non-cash donations can include writing thank you notes to fellow donors, drafting supportive blog posts or establishing a giving circle. Nonprofits should continue to make appeals to engage in these types of charitable giving opportunities.
  • Even when, because of the crises, donors pause or reduce their charitable giving, nonprofits should continue to include these donors as part of the philanthropic community. Eventually, when Covid-19 is controlled, these efforts to strengthen donor relationships will bear fruit.

For More Information

Interested readers may wish to subscribe to publications by the Women’s Philanthropy Institute.

Originally published at https://nonprofitlawandnews.com.

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Jimmy Verner

Long-time, semi-retired lawyer who practices business law and corporate law online and likes to write about it.