A recession is expected to curtail Americans’ generosity following a record year for charitable donations
SEATTLE (AP) — A recession is expected to curtail Americans' generosity following a record year for charitable donations, but the recent wave of money dedicated to fighting the coronavirus and racial inequality in the U.S. is offering a beacon of hope for nonprofits in 2020.
The Giving USA report, released Tuesday, estimates nearly $450 billion was donated to charities in 2019, a 2.4% uptick from the previous year when adjusted for inflation. It marked a record year for giving that reflected a booming economy.
Giving amounts by individuals held steady, representing 1.9 percent of total disposable income, and they continue to make up the majority of dollars donated — nearly 70% in 2019. The rest is given by foundations, corporations and estates. Some wealthy people like Bill Gates may give both individually and through their foundations.
The Ford Foundation announced an effort last week to increase its giving by $1 billion through a bond that aims to help keep afloat donations-dependent nonprofits through the uncertainty ahead, including groups addressing both the pandemic and racial injustice.
“Our challenge is not to save any particular organization; it is to save the soul of our democracy itself,” Darren Walker, the foundation's president, said in a statement.
Though there’s sure to be disruptions in 2020 after the pandemic forced businesses to shut down and sent the economy into its worst recession in decades, donor confidence remains high, said Rick Dunham, chairman of the Giving USA Foundation board.
Dunham said his consulting firm, Dunham+Company, surveyed 630 U.S. donors in April and 80% said they would keep giving, largely because they felt more optimism about the economy recovering quickly compared with the recession a decade ago.
“I just think donors will rally and are rallying, and anecdotally, we’re seeing it with some of the organizations we work with,” Dunham said. “We’re seeing record giving days. We’re seeing a record amount of money given."
United Way, a nonprofit that relies heavily on middle-class donors, said it has raised $900 million worldwide since mid-March, when many states instituted virus restrictions that disrupted daily life.
The charity is among the largest in the U.S. and has at times seen as much as a tenfold spike in online donations compared with the responses to other disasters in recent history, said Tolli Love, United Way Worldwide’s chief investor relations officer. Among its signature programs is the 211 referral and information hotline, which has seen a 300% to 400% increase in calls for help ranging from food and rent payments to health care and mental distress.
Love said United Way also is developing initiatives to address racial inequity as a part of its coronavirus relief efforts.
“As we try to go back to normal, normal wasn’t so good for everyone prior to the pandemic,” Love said.
The two needs are intertwined given that black people and Latinos have been hit hardest by the virus, said Una O. Osili, a professor at Indiana University's Lilly Family School of Philanthropy and a lead researcher on the Giving USA report.
Like with coronavirus relief, to which Twitter CEO Jack Dorsey pledged $1 billion, individual giving has surged significantly for black civil rights and grassroots social justice groups since George Floyd's death, Osili said.
The black man died May 25 after a white Minneapolis police officer pressed a knee into his neck for several minutes, sparking protests around the globe.
But the wave of donations is not without growing pains. GoFundMe said Tuesday that it’s putting on hold $350,000 worth of donations for a foundation whose name sounds like the Black Lives Matter organization but isn't related to the group at the heart of the protest movement. The online fundraising platform said it’s working with Black Lives Matter to ensure the money gets to the right cause.
The recent demonstrations have drawn parallels to the civil rights movement in the 1960s, when Giving USA’s trends showed an increase in education-related donations that addressed the era's social upheaval. The result of those donations cemented the missions of many black civil rights groups, including what was then known as the United Negro College Fund, Osili said.
Now, that same push for racial justice is seeing a bolder resurgence, forcing companies not just to write checks but to reconsider their vendors, hiring practices and company culture.
“We’ve seen corporations get involved before, but I think the speed and broad and bold nature of this moment seems very encouraging," Osili said. “And the question, of course, is for how it will be sustained.”
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