Resource Library

The State of Giving

Resource Library

The State of Giving

What We Know and What We Don't

by David P. King, PhD

The good news: giving grew in 2019. Americans gave $450 billion to charity in 2019. In the midst of strong economic conditions, overall giving rose 4.2% over the past year (2.4% adjusted for inflation). With the release of the annual Giving USA report last week researched and written by our colleagues at the Indiana University Lilly Family School of Philanthropy and published by Giving USA Foundation, we learned that 2019 was a strong year for philanthropy. Despite turbulent end of the year financial markets, steady growth was on par with what we might have expected from a strong economy and general philanthropic trends. Giving was up – 4.7% by individuals, 2.5% by foundations, and a whopping 13.4% by corporations.

Even giving to religion, which has lost overall market share alongside other charitable sectors for many years, grew slightly (2.3% or .5% adjusted for inflation) in contrast to a decline in 2018. Of course, giving to religion (defined as congregations, denominations, missionary societies, and religious media) still remains by far the largest overall recipient of charitable dollars.

The bad news: religious giving still lagged far behind the growth of almost every other charitable sector. Only international affairs ranked significantly lower. It was a banner year for growth in education as well as arts and culture organizations, two areas that often see significant growth in good economic times. Environmental causes have also experienced remarkable growth as climate change has increasingly caught the attention of major donors as well.

From what we learned on philanthropic trends in the most recent Giving USA report, little seemed to change in the last year. Yet, of course, it goes without saying that everything has changed in 2020 – whether the Covid-19 global pandemic leading to massive unemployment, an economic downturn, and the shuttering of almost all congregations, conferences, and travel as well as large-scale protests against racial injustice in the wake of George Floyd’s murder in Minneapolis.

What might that mean for those of us focused on the intersections of faith and giving? The short answer, obviously, is that we do not know. Giving to religion has always relied on the distinctive connection of both religious identity and activity. Religious affiliation itself is a predictor of giving. The teaching and practices within faith traditions often encourage giving as well, and higher levels of engagement in a religious community serves as one distinctive indicator for predicting an individual’s charitable giving. But for the first time in our lifetime, religious communities cannot meet together. With what we know from the National Study of Congregations’ Economic Practices (NSCEP), most congregations receive the vast majority of their resources in person during worship services. When in-person worship was no longer an option in March, most religious leaders moved services and giving options online. For many, this was a new experience. For larger congregations, the infrastructure and technology were already in place.

The first surveys reporting on what congregations have experienced these past few months have offered mixed results. Several mainline denominations (American Baptists, United Methodists, and the Presbyterian Church USA) have polled their own congregations and found many managing well. In fact, most initial research points to higher viewership of online services measured against past attendance. Trends in online viewership, however, do not always match trends in giving. At the high end, 90% of PC(USA) congregations report that giving has decreased since the outbreak began. In an earlier April poll, Barna found 80% of Christian leaders noted a decline in giving. Declining trends in giving are concerning, but initial surveys note an even more concerning distinction between types of congregations. While the majority may have experienced some decline in giving, there is a significant group where giving has declined precipitously or almost stopped.

Other polls, however, particularly from our colleagues at ECFA, note that “Optimism outweighs Uncertainty.” These surveys point to the different levels of resources (finances, technology, staff, social capital) that defined congregations before these recent crises that have perhaps only accelerated in the past few months pointing to those organizations who are managing well, accessing Paycheck Protection Program funding, and transitioning online in contrast to those without significant safety nets and access to other resources. Yet, in these surveys and our own Lake Institute interviews with religious leaders, we find religious leaders overwhelmed and tired but generally optimistic and resilient about the ongoing life of their community despite significant challenges.

Giving to religion has always served as a bit of an outlier alongside most other charitable giving sectors with different motivations and reasons for giving. Perhaps that is true in these days as well. Religious institutions have never been closed to in person services for so long. Religious affiliation and engagement continue to fall. Yet religious engagement may actually be up in recent online viewership and activity. As most congregations are debating a timeline or process for reopening their buildings, many are also on the frontlines organizing against racial injustice. Others are perhaps addressing the topic of racial injustice seriously in their communities for the first time.

Early reports for the first quarter of 2020 note declines in giving but point to the rise of the number of smaller gifts from individuals. If large donors are pulling back, perhaps everyday individuals are stepping up. We have seen that throughout these past few months as food banks reported receiving $120 donations from individuals tithing off their stimulus checks, others shopping for family and neighbors who could not go out, and congregations passing out water at Black Lives Matter marches. 

We know 2019 was a good one for philanthropy, but we also know that 2020 is a very different year. What does the future hold for religious giving? There really is little way to know, but I feel confident that if we keep our eyes open and look broadly at where giving, volunteering, and civic engagement is happening, we will continue to find religious organizations and people of faith at the center.

by Melissa Spas

As David outlines above, the Giving USA 2020 report shows little change in giving to religion in 2019.  Giving to religion increased 2.3 percent between 2018 and 2019, with an estimated $128.17 billion in contributions. Inflation-adjusted giving to the religion subsector stayed relatively flat with growth of 0.5 percent in 2019. Giving to religion reflects 29% of the $450 billion given in 2019 overall, and an even larger proportion of the $309.66 billion given by individuals.

Knowing this big picture can help us to make sense of our individual context and the value of what we do as part of a broader landscape.  In the February 11, 2020 issue of Insights, Meredith McNabb noted that “Reliable research also gives us the tools to deal more fruitfully with issues of true disagreement.” In challenging times, it is worthwhile to prepare ourselves, our colleagues, and our organizations with as much good information as we can for planning, change management, and deep understanding.

We have greater confidence in the Giving USA estimates of giving to religion, thanks to the new baseline established by our own National Study of Congregations’ Economic Practices. However, it remains to be seen what impact the current pandemic and related economic crisis may have on congregational giving and giving to religion… that impact probably won’t be measurable until 2021 and beyond.   

We do know, however, that the presence of and leadership provided by religious organizations has had a significant positive impact in local communities over time. This impact is spiritual, social, and material. In 2016 Partners for Sacred Places found that the average historic sacred place in an urban environment generates over $1.7 million annually in economic impact. Referring to this as the “economic halo effect”, it includes employment, a network of vendors and suppliers, and the activity of congregational partners and visitors in the immediate vicinity of the sacred place. 

Measuring the good of philanthropic investment can help us to see with a new perspective the importance of what we contribute in our day-to-day work. Whether it’s the mission of a faith-based non-profit organization, the value to a community of a local religious congregation, or the vitality of a faith community itself, knowing more about the big picture of faith and philanthropy helps us all to do our work more effectively. 

DATE: June 23, 2020
TOPIC: Research and Scholarship
TYPE: Article
SOURCE: Insights Newsletter
KEYWORDS: Religious Giving
AUTHOR: David P. King, Melissa Spas