Report Predicts Uptick in Giving in 2024 and 2025

With giving to nonprofits declining each year after nearly record highs in 2020 and 2021 during the pandemic, it’s been difficult to know when the sector’s outlook would turn around. 

A new report, “The Philanthropy Outlook 2024 and 2025” from the Lilly Family School of Philanthropy at Indiana University, has bold predictions. Researchers expect giving to increase by 4.2% this year, followed by a 3.9% increase in 2025 — a complete reversal of Giving USA’s 3.4% drop in giving for 2022. This rate is also above average for the past decade’s 1.9% growth rate.

In recent years, numerous variables have affected giving, including the pandemic, racial justice movement, stock market fluctuations and high inflation rates. To conduct this study, researchers considered “19 unique variables” to predict giving for the next two years, but caution that the past few years have been disruptive and filled with uncertainty so these expectations could change. 

“However, it is important to acknowledge that these findings do not necessarily mean a return to business as usual,” according to the study. “In the wake of the disruptions of the past few years, organizations of different sizes and within different categories may be facing unique opportunities and challenges.”

The report is broken down into the same four categories as Giving USA, so let’s take a look at each category. 

Individual Giving

The average growth for American households is projected to rise by 2.6% this year. That rate is expected to also increase by 3.4% in 2025. That growth is attributed to average growth in personal income and net worth, which typically leads to increased charitable giving, according to the report. Meanwhile, stock market gains can cause an increased number of individual million-dollar gifts to charity.

Additionally, an above-average growth in consumer sentiment will assist in the year-over-year charitable giving growth. 

“Consumer sentiment, a measure of consumers’ attitudes toward their finances and the economy, is expected to improve as inflation returns to more typical levels after reaching exceptionally high rates in recent years,” according to the report. 

Individual giving will make up 63.1% and 62.8% of giving, respectively, in 2024 and 2025. This is a slight decrease from Giving USA’s 2022 proportion of 64%.

This chart shows the predicted giving distribution by source, for 2024 and 2025. | Credit: “The Philanthropy Outlook 2024 and 2025” by Lilly Family School of Philanthropy at Indiana University

Foundations

In 2024, giving from community, private and operating foundations is expected to increase 10.3% — an above average rate. Next year, it’ll increase another 5.3%. Stock market and GDP growth will be the main contributing factors in the growth. 

“Since foundations typically budget their giving based on asset growth, trends in the prior year’s S&P 500 impact giving in the current year,” according to the report. “As such, the majority of the projected increase in foundation giving for the years 2024 and 2025 will be influenced by growth in the prior year’s S&P 500.”

Foundations will comprise 22.6% of giving in 2024, with a slight increase next year. This is slightly higher than Giving USA’s 21% in 2022. 

Estates

Cash and non-cash legacy gifts will grow by 2.7% in 2024 and 5.5% in 2025. Next year’s growth trends above average, possibly an indication of the great wealth transfer being underway. Net worth gains, such as increased home values and stock market gains, is mostly attributable to the increases in both years. 

“Giving by estates can vary greatly from year to year,” according to the report. “This volatility is mostly due to very large bequests made by a few estates in a given year. Therefore, a significant increase one year will suppress the rate of growth in giving the following year. The projected increase in bequest giving in 2024 and 2025 is expected unless substantially large estate gifts are processed in 2023 or 2024.”

Estates will make up approximately 8.4% of giving in 2024 and experience a small uptick in 2025. This is slightly lower than 2022’s 9% from Giving USA in 2024 but roughly equal in 2025.

Corporations

Predictions for corporate giving, which includes gifts from corporate foundations, are a 1.9% and 2.6% increase, respectively, for 2024 and 2025. These gains are attributed to growth in both GDP and the stock market, but fall below average for this category. 

Corporate giving, at 5.8% of total giving, is expected to remain steady from 2024 to 2025. This remains on pace with Giving USA’s 2022 figure.

However, any number of economic or political factors could change this outlook. 

“Many economists now agree that the U.S. appears to be on track for a ‘soft landing,’ in other words, achieving a decline in the inflation rates of the last few years without tipping the economy into a recession,” according to the report. “Still, several factors could change the outlook. A lower-than-predicted or negative GDP, which could occur due to lower consumer spending, ripple effects from high interest rates and shocks to the global economy, could negatively impact current projections. In 2025, donors may respond to potential policy changes ushered in by newly elected federal and state representatives.”

For more about expected trends this year, download NonProfit PRO’s free resource, “40 Nonprofit Trends for 2024.”