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Charitable giving increased 10.6 percent in 2020, report finds

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Charitable giving in the U.S. increased 10.6 percent on a year-over-year basis in 2020, a report from the Fundraising Effectiveness Project finds.

Conducted by the Association of Fundraising Professionals and the Center on Nonprofits and Philanthropy at the Urban Institute and based on an analysis of sample data from nearly twenty-five hundred nonprofits in AFP’s Growth in Giving Database, the 2020 Fourth Quarter Report found that the number of people making a gift increased 7.3 percent, with an 18.5 percent jump in new donors and a 13.7 percent increase in recaptured donors — those who gave to a charity before 2019, did not give to that charity in 2019, but gave again in 2020.

At the same time, the overall donor retention rate continued to fall, down some 4.1 percent, to 43.6 percent — the lowest rate recorded since the project began tracking that data point in 2009. The repeat donor retention rate also fell, down 3.9 percent to 59.6 percent, while the retention rate for new donors dropped 9.2 percent, to 19.3 percent.

According to the report, the growth in giving in 2020 was driven by year-over-year increases of 15.3 per cent in gifts of less than $250, 8 percent in gifts of between $250 and $999, and 10.4 per cent in gifts of at least $1,000.

One factor in the increase in small gifts could be Congress’s decision a year ago to allow all taxpayers, not just those who itemize, to claim a charitable deduction, Jon Biedermann, chair of the Fundraising Effectiveness Project, told the Chronicle of Philanthropy. “It’s striking,” Bierdermann added, “that on December 31 there was a 28 per cent increase of $300 gifts, which is exactly the maximum amount a donor can take using the universal charitable deduction.”

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