Charitable donations in the United States reached a record $485 billion in 2021, though that increase was at a pace slowing down by inflation, according to a report released Tuesday that takes a broader look at American philanthropy.
The Giving USA report said donations in 2021 were up 4% from a record 2020 of 466,000 million, but fell 0.7% when adjusted for inflation.
Laura McDonald, president of the Giving USA Foundation, said many nonprofits are feeling the pressure because donation prices are not increasing as fast. In response to the intense needs in the first phase of the COVID-19 pandemic, as well as calls for racial justice, 2020 has increased unusually, but has generally returned to the previous pattern.
“In 2021, many donors returned to their favorite causes, and many areas that struggled in 2020 returned in 2021,” McDonald’s said in a statement.
Donations to groups promoting arts and culture, which were suffering during the pandemic, increased by 27.5% to more than 23.5 billion in 2021. In contrast, donations to educational organizations, which saw donations during the pandemic to create virtual learning programs and new back-to-school safety precautions, fell 2.8% to $71 billion in 2021.
“The giving environment is evolving in many ways,” said Amir Pasik, dean of the Indiana University Lilly Family School of Philanthropy, who researched and wrote the report published by the Giving USA Foundation. “Strong economic growth has fueled institutional forms of philanthropy, such as Translated into strong performance from foundations and corporations.”
However, the report found that according to figures adjusted for inflation, private donations were essentially flat in 2021, when accounting for inflation, rose 4.9% to $327 billion, down from 2017’s peak of nearly $342 billion. Experts say these totals contradict predictions of proponents of the Tax Cuts and Jobs Act, passed in 2017, who said the law would increase donations.