by Anna Pruitt

Giving USA 2023: The Annual Report on Philanthropy for the Year 2022, revealed that giving to religion grew 5.2 percent in 2022 to a total of $143.57 billion. However, when adjusting for the 30-year high inflation rate of 8.0 percent, giving to religion declined by 2.6 percent. In Giving USA, giving to religion includes giving to congregations, religious media, and missions – it does not include religiously-motivated or inspired organizations. Even with this narrow definition, giving to religion receives 27 percent of charitable giving dollars, making it by far the largest recipient category of giving.

Giving in Context

The Giving USA report, released in June, is published by Giving USA Foundation and is researched and written by our team at the Indiana University Lilly Family School of Philanthropy at IUPUI. To better understand what is happening in giving to religion, it is helpful to understand the unique context for total giving in 2022. High inflation and the drop in the stock market created difficult conditions for giving in 2022 all around. In fact, total giving declined for only the fourth time in the last 40 years in current dollars. The decline in total giving follows the two best-ever years for charitable giving: 2020 and 2021. The acute needs created by the COVID-19 pandemic, recession, and movement for racial justice in 2020 were met with extraordinary generosity. Giving was further lifted by a strong performance in the S&P 500 for both 2020 and 2021. We are all living in unprecedented times, and the unusual results for giving in the last few years reflect this.

Giving to religion took a hit in 2020, declining by 0.4 percent in current dollars or 1.6 percent when adjusted for inflation. This decline followed the COVID-19-related closures of many congregations, many of which were not prepared to pivot to online services and online fundraising. In 2021, giving to religion recovered, growing 6.3 percent (1.6 percent adjusted for inflation). Though that recovery continued in 2022 with giving to religion growing in current dollars, it was not enough to outpace inflation in 2022. In fact, giving to religion in 2022 was still slightly lower than it was in 2020 when adjusted for inflation.

Understanding the Factors

There are several factors that help to explain these results: first, giving to religion is dominated by gifts from individuals, and giving by individuals declined by 6.4 percent in 2022 (-13.4 percent when adjusted for inflation). Households of all levels were impacted by the conditions of the year. The drop in the stock market likely dampened giving from high-net-worth donors, and the decline in disposable personal income (the amount that households have left after paying taxes) and high levels of inflation may have left households with fewer dollars to give to charity.

Secondly, multiple studies have reported that attendance rates for religious services have not yet returned to pre-pandemic levels. While some congregants have moved to online-only services, it appears that some individuals did not return after congregations stopped meeting in person. Growth in current dollars means that the households that did return are giving even more than they did in the previous year, however, they are not giving enough to keep up with inflation.

Thirdly, declines in religious affiliation may also be having an effect. The number of Americans who report that they are unaffiliated has been climbing in recent years. In the most recent Pew Research Center survey, 29 percent of adults reported having no religious affiliation, compared with only 16 percent in 2007. These types of widespread changes may have an impact in the long term for giving to religion.

Seeing the Bigger Picture

What do these results mean for the future of giving to religion? Our 40-year historical data set offers a reason to feel hopeful: giving to religion tends to grow slowly and steadily. The five-year annualized average growth rate for giving to religion is 2.8 percent. While this is slower than the 3.3 percent annualized average growth rate for total giving, it tends to be fairly consistent. We have also seen religion bounce back from each decline. After giving to religion dropped in 2008, at the height of the Great Recession, it grew again the following year, and over time, exceeded the previous highest level of giving.

There are other trends that are worth observing for 2023 and beyond. One study found that Millennials had actually increased their attendance levels in 2022 compared to 2016, demonstrating that it will remain important to reach out to younger individuals to help build the pipeline of donors. In addition, new financial tools such as low-minimum, religiously-focused donor-advised funds and digital giving cards gained traction in 2022 and may be a way to engage congregants in charitable giving. Time and again, we see that this sector is resilient—and innovative.

Anna Pruitt is the Associate Director of Research at the Indiana University Lilly Family School of Philanthropy and the Managing Editor of Giving USA: The Annual Report on Philanthropy, the longest-running annual report on charitable giving in the United States. Anna also works on The Philanthropy Outlook, a report that projects charitable giving for two years and explains how economic variables impact those projections. 

Questions for Reflection

1. 1. Do you see the trends outlined above in your congregation? If so, what is the narrative about the change in giving?
   2. How can seeing the bigger picture of giving to religion over time help change the narrative of giving in your setting?