Nonprofit and Giving Outlook for 2022

The effects of the pandemic have been felt across all business sectors. However, the nonprofit sector, whose funding generally relies on face-to-face networking (think galas, marathons, concerts), suddenly had to innovate to continue generating income when lockdowns put an end to those events. Early projections suggested that the COVID-19 pandemic would only compound the other challenges nonprofits regularly face, painting a grim picture of how they would weather the storm.

The remarkable news is that despite last year’s extraordinary circumstances, charitable giving was up in 2020, indicating that the American population rallies to help the less fortunate when everything goes sideways.

And even better, the forecast for this year through 2022 is just as favorable.

By the Numbers

The Outlook for Charitable Giving report from the Lilly Family School of Philanthropy at IUPUI in Indianapolis highlights some encouraging statistics and projections. Total charitable giving was anticipated to increase by 4.1% for 2021 (the final numbers are yet to be calculated, of course) and 5.7% for 2022. The report also predicted increases in all four major contributing sources:

• Giving by American individuals and households were predicted to increase by 6.0% in 2021 and by 3.9% in 2022
• Giving by foundations was predicted to decline by 1.0% in 2021 but then soar to 8.8% in 2022
• Giving by estates was predicted to increase by 1.1% in 2021 and by 11.9% in 2022
• Giving by corporations was predicted to increase by 4.3% in 2021 and by 6.4% in 2022

Historically, this type of giving is influenced by factors such as growth in the gross domestic product (GDP) and in the Standard & Poor’s 500 Index (S&P 500).

The S&P 500 impacts individual and household giving, particularly among those with median and higher incomes. Generally, as income and wealth increase, so does household charitable giving.

Estates are also affected by the condition of the stock market, as the amounts bestowed usually depend on the health of the assets when the donor passes. Growth in assets means more will likely be donated from the estates.

Finally, giving from foundations and corporations alike is affected by the state of both the GDP and S&P 500: for foundations, since economic trends guide their philanthropic budget, and for corporations because they represent the statistics affecting GDP and the S&P 500.

In short, so long as we continue to see growth in GDP and the S&P 500, nonprofits could very likely expect to see the philanthropic projections above.

Going Forward

It is important to remember that we are still in very uncertain times and that no forecasting model, no matter how scientifically founded, can foresee the future with absolute certainty. The predictions above are based on overall economic conditions, and some variables could affect said conditions. Factors such as new variants and waves of the COVID-19 virus, the continued rollout of vaccines, market volatility, and policy changes as the pandemic continues could all impact the philanthropic forecast.

There are, of course, methods that can help nonprofits face whatever future awaits. Ideally, anything that can simplify the process of contributing will help. In her Bloomerang article, fundraising coach Claire Axelrad recommends the following fundraising strategies:

Make it easy for your donors to give.

• Ask yourself: what creates ease for the donor? For yourself?

Make giving to YOU easy.

• Conduct a website self-audit. Is it easy to find your site? Is it easy to navigate? Can your donors clearly see your mission, making it more likely that they will donate?
• Review your technology. Do you have the most up-to-date payment options? Can your donors contribute directly, or are they redirected elsewhere (e.g., PayPal or an off-site website form)?

Make receiving new, renewed, and upgraded gifts easy.

• Use leveraging strategies (corporate matching gifts, peer-to-peer campaigns, tribute, and monthly giving programs).
• Review your retention strategies. Do you have a donor loyalty plan? Or a gratitude strategy that can inspire donors to upgrade their own donations?

Additionally, you can check out our blog for more options on future-proofing your nonprofit during unprecedented events like the COVID-19 pandemic.

Regardless of what the future holds, if precedent is any indication, Americans will intentionally and happily continue to support each other through the more difficult times. As it was once famously stated:

“No one has ever become poor by giving.”

―Anne Frank, The Diary of Anne Frank

How Sekure Can Help

In these uncertain times, raising the funds you need can be challenging. To learn how Sekure can help you in achieving your fundraising goals, contact us today. Our Payment Experts can help you find the best payment processing solution to accept donations worry-free. In the meantime, be sure to check out our blogs on payment processing and the best donation tools.