Foundation Giving Numbers for 2020 Show 15 Percent Increase

Photo by Joel Muniz on Unsplash

Two months ago, Giving USA issued its annual report on donor revenue trends. The report, its 65th annual, is based on research conducted by the Lilly Family School of Philanthropy at Indiana University–Purdue University Indianapolis (IUPUI). Overall, the report finds that giving climbed in 2020 to $471.44 billion. Adjusted for inflation, this represents a 3.8 percent increase over 2019. US giving in 2020 was 2.25 percent of US gross domestic product (GDP).

National trend data, while helpful, can obscure variation within the field. Many nonprofits are still suffering. It is notable, for example, that according to the Johns Hopkins Center of Civil Society Studies, as of June 2021, the nonprofit sector is still down 685,000 jobs from February 2020—a 5.5 percent decline. Of course, donations are but one source of nonprofit revenue, and only the third largest at that. Sector-wide, earned income comes first and government contracts second. Many nonprofits that relied on earned income suffered the most.

When the pandemic-induced economic shutdown hit, many observers, including NPQ, feared donor revenue might fall, as happened during the Great Recession. The actual numbers are displayed below:

Giving Data by Donor Type (2020)

Billions
Change (inflation-adjusted)
Percent of Total

Individuals
$324.10
1.0%
68.8%

Foundations
$88.55
15.6%
18.8%

Bequests
$41.19
9.0%
8.8%

Corporations
$16.88
-7.3%
3.6%

Most notably, foundation gifts went up 15.6 percent, increasing from $76.61 billion in 2019 to $88.55 billion in 2020. That’s $11.94 billion more—over half the total rise in giving of $22.78 billion. (The 2019 total was $448.66 billion).

When the pandemic began, many, including NPQ, called on foundations to double payouts. While foundation responses varied widely, many funders did increase their payout rates significantly. Notable examples include Mary Reynolds Babcock, Libra, Ford, Doris Duke, MacArthur, Kellogg, and Mellon. While the amount of the 2020 increase was unusual, foundation funding as a percentage of total giving has been rising for some time now, from 5.8 percent of total giving in 1980, to 10.7 percent in 2000, to 14.2 percent in 2010, to 18.8 percent in 2020.

As for the other numbers, bequest revenue might have been affected by rising stock values, although a few large bequests can independently cause numbers to rise. The fall in corporate donations is consistent with a long-term trend of declining donations as a percentage of profits. Another factor: even though many large corporations saw profits rise, many smaller companies suffered or shuttered entirely. While press releases from large corporate foundations garner greater attention, as a percentage of revenue, small companies often give more—according to the nonprofit SCORE (née Service Corps of Retired Executives), as much as 250 percent more.

One effect of rising foundation payments is that once again—for the third year running—individual giving remains below 70 percent of total giving, a major deviation after a half-century of consistently exceeding that amount. Still, even though individual donations are a smaller percentage of total donations than they once were and only increased by one percent more than inflation in 2020, the fact that they increased at all, in a year when most expected them to fall, is significant.

What caused this growth? While a single answer does not exist, many factors help explain this outcome. One surely was the pervasive sense of urgency. After all, 2020 was marked by both the COVID-19 pandemic and a historic uprising against anti-Black racism.

There are also financial factors. Due to CARES Act relief payments, personal income climbed 6.1 percent. Moreover, the stock market (Standard & Poor’s 500) climbed 16.3 percent. Additionally, a $300 universal charitable deduction was added to tax forms in 2020, which allowed small donors to claim a small tax break. One novel development: in 2020, after two decades of decline, small donor giving reportedly increased, with one study finding that donations of under $250 went up 15.3 percent.

Who got the donations? Clearly, not all sectors did equally well. Doing best were public benefit nonprofits—a category that oddly includes both donor-advised funds and racial justice groups. The arts did the worst, an unfortunate outcome given that arts nonprofits suffered the most from COVID-induced operational restrictions.

Giving by Nonprofit Type (2020)

Change from 2019
$ Given (Billions)
Percent of Total

Public benefit
14.3%
$48
10.1%

Environment/animals
10.3%
$16.1
3.4%

Human services
8.4%
$65.1
13.6%

International affairs
7.8%
$25.9
5.4%

Education
7.7%
$71.3
14.9%

Gifts to foundations
0.8%
$58.2
12.2%

Religion
-0.2%
$131.1
27.5%

Health
-4.2%
$42.1
8.8%

Arts, culture, humanities
-8.6%
$19.5
4.1%

One other factor worth mentioning is that not all forms of giving are captured by these numbers. Only 501c3 organizations are reflected in the Giving USA data, but in 2020 many communities developed sophisticated networks of mutual aid. A study last year from the Lilly School, based on a survey of 3,405 respondents, found that 56.1 percent of them had engaged in some form of giving amid COVID, even as only one in three (32 percent) gave to 501c3 organizations; in many instances, this non-501c3 giving involved providing support for local businesses.

Prospects for 2021 and Beyond

What does the funding picture for 2021 look like? For its part, the Lilly School, partnering with the Wharton School of Business at the University of Pennsylvania, projects even faster growth in giving in 2021 and 2022 than last year, with giving overall projected to climb 4.1 percent in 2021 and 5.7 percent in 2022 and annual increases of four to six percent projected in both corporate and individual donations. These numbers should be taken with many grains of salt; it’s worth recognizing that this level of growth typically requires rising stock markets, and if stock values plateau or fall, donation growth will likely be less.

Of course, many questions lie beyond the numbers. The Giving USA study is not designed to consider more fundamental issues, such as whether cultural changes in philanthropy and among individual donors to support equity and racial justice and give nonprofits more flexibility will have staying power, or whether the recovery of small donations in 2020 might prove more than a blip. Still, the data provide a useful window that calls our attention both to who gives and to where donor funds are directed.

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