One of the big questions for 2021 is how philanthropy will be affected by the events of the past year.  The best predictors of philanthropy have traditionally been Gross Domestic Product (GDP), S&P 500 performance, and household income. Donor surveys also come into play as nonprofit organizations navigate this uncertain year.

One of the big questions for 2021 is how philanthropy will be affected by the events of the past year. The best predictors of philanthropy have traditionally been Gross Domestic Product (GDP), S&P 500 performance, and household income. Donor surveys also come into play as nonprofit organizations navigate this uncertain year.

According to a study recently completed by the Indiana University Lilly Family School of Philanthropy, 25% of donors surveyed expect to give more this year; 53% will stay the same and 70% said that they have a fair or a great deal of confidence in nonprofits responding to the pandemic. In addition, 30% of foundations surveyed increased their payout rates and 72% of businesses increased their contributions. This is all good news for nonprofits. However, based on additional data collected by the IU Lilly Family School of Philanthropy, nonprofit organizations are reporting healthy giving by existing donors but little acquisition of new donors because of the limitation on in-person relationship building.

The school’s Andy Ware reported in a recent blog that GDP is likely to grow in 2021 as long as vaccines continue to be administered as planned. And while the S&P 500 is expected to continue its volatility, predictions are of strong overall performance. Individual wealth and income should grow as a result. Ware shared the following predictions for giving in 2021 & 2022:

  • Total giving is anticipated to rise 4.1 percent in 2021 and 5.7 percent in 2022.
  • Giving by American individuals and households is predicted to increase by 6.0 percent in 2021 and by 3.9 percent in 2022.
  • Giving by foundations is predicted to decline slightly by 1.0 percent in 2021 and then grow by 8.8 percent in 2022.
  • Giving by estates is predicted to increase by 1.1 percent in 2021 and by 11.9 percent in 2022.
  • Giving by corporations is predicted to increase by 4.3 percent in 2021 and by 6.4 percent in 2022.

Ware noted that donors may respond positively or negatively to potential policy changes proposed by newly elected federal and state representatives. Higher taxes could dampen charitable giving, while increases on capital gains taxes might incentivize individuals to give more to nonprofits.

All eyes are on the philanthropic sector as we hope for positive results in 2021 and 2022.

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