INDIANAPOLIS (Inside INdiana Business) — Philanthropic giving reached a new high across the U.S. in 2019, but the challenges of the COVID-19 pandemic will likely impact donations in 2020, according to economists at IUPUI. At the same time, economic uncertainty stemming from the healthcare crisis will continue to put more pressure on nonprofit organizations to give even more to those in need.
The Lilly Family School of Philanthropy at IUPUI provided an update Monday on Giving USA, a national, long-running study on philanthropic funding sources and uses of the money.
“In 2019, we had a very strong economy,” said Una Osili, an economist and associate dean at the Lilly Family School of Philanthropy at IUPUI. “The stock market was one of the bright spots, growing about 28.9%.”
The report shows U.S. charitable giving in 2019 measured a record $450 billion, up 4% over 2018.
The data indicates 69% of charitable giving was attributed to individuals as many saw their personal incomes grow 4% last year. Meanwhile, the report showed donations from corporate foundations climbed 10% from 2018, due to a strong economy.
“Across the board, in both the real economy and financial sector, we saw strong growth in 2019. And that is actually one of the most important explanations for the results that we’re seeing for broad-based growth (in giving) in 2019,” said Osili.
Moving forward, as the U.S. continues to deal with regional outbreaks of COVID-19, the potential of a second wave, and the economic fallout, charitable giving could take a hit.
“2020 is a very different world than 2019,” said Anna Pruitt, managing editor for the Giving USA report. “We know charitable giving does not take place in a vacuum.”
Pruitt said people respond to things happening around them in an economic and social context.
“People respond when they see their friends post on social media,” said Pruitt.
The Indiana Philanthropy Alliance said its membership is feeling the effects of COVID-19, as they deal with an extraordinary number of requests for funding.
“The needs are immense; the pace is relentless,” said Claudia Cummings, chief executive officer of Indiana Philanthropic Alliance. “I’ve been really proud of our colleagues across the state, as we’ve really risen to the challenge that has hit us all through the tragedies of COVID-19.”
Osili said Indiana has fewer corporate foundations than other states, but the Hoosier state has a strong foundational base.
“As a whole, we have a strong level of giving and rate of giving. Indiana tends to do quite well in terms of percentage of people that give, but our median income is a bit lower,” said Osili, who recently testified before Congress’ Joint Economic Committee on the status of philanthropy during the COVID-19 pandemic.
Osili said the school has been tracking the COVID-19 philanthropic response on a weekly, if not daily, basis and the data reveals uncertainty in many dimensions.
“We have the economy being very uncertain, but also the health environment being very uncertain as the data we’re getting is changing,” said Osili. “We can also juxtapose the uncertainty with unprecedented levels of need. When we look at the food insecurity, we have these cascading needs in many communities, and those are also changing. So, with the unprecedented uncertainty as well as need, there’s an opportunity for nonprofits to really play a role in this environment.”
For Cummings, IPA, and philanthropic organizations, they realize the need to remain solvent during these uncertain times, as they prepare for future uncertainty.
“These professionals have stood up relief efforts at a pace never seen before,” said Cummings. “While also protecting the future of their organizations to ensure that future generations have these institutions available to call upon when the inevitable next wave of incredible disaster might hit upon us in the future.”
EDITOR’S NOTE: Indiana Philanthropy Alliance has announced the launch of the Mutz Philanthropic Leadership Institute. Click here to learn more about the new program.