The COVID-19 pandemic impacted every facet of life, and shutdowns and layoffs have fueled great need in the U.S. Thankfully, there is good news regarding giving; donors have been giving at a record pace to support organizations that provide for basic needs like food and shelter. Donor-advised funds are showing substantial increases in grants to organizations and an increase in contributions to the funds themselves during the pandemic, according to data from Fidelity Charitable, Schwab Charitable, and Vanguard Charitable.
- During the first half of 2020, Schwab Charitable saw a 46% increase in dollars granted and a 44% increase in the number of grants to charities compared with the prior year. (Source)
- Vanguard Charitable reported a 51% increase in 2020. (Source)
- Fidelity Charitable saw a staggering 667% increase in donations to free food programs as of May 2020. (Source)
It’s inspiring to see that younger generations are also a part of the current giving movement! Schwab Charitable reports that 46% of millennials say they will give more in response to the pandemic, compared with 14% of baby boomers and 25% of Gen X. Fidelity Charitable says that about 25% of donors plan to increase their donations in response to the coronavirus, while 54% plan to maintain their giving levels.
Along with increased giving to organizations providing for basic needs, 2020 brought increased giving to organizations focused on racial justice issues. Benjamin Soskis, a senior research associate at the Center on Nonprofits and Philanthropy at the Urban Institute, says in the past, “there was a small subset of large-scale funders who were committed to racial justice. Now, there’s a much larger group of both individual donors and institutional donors who don’t see it as a kind of fringe, niche interest, but see it as really key to the way they think about all issues.”
From a support standpoint, 42% of Americans say they donated or planned to donate to social justice causes in 2020, and 58% say it was the first year they had ever donated to that type of cause. Of the people who donated to social justice causes, 43% said their donation was in addition to their other charitable contributions.
Outside of donor-advised funds, alternatives to traditional charity are also flourishing. One of those trends is giving through “mutual aid networks.” These are not charities but take the form of neighborhood groups made up of volunteers who meet each other’s and neighbors’ needs. They tend to focus on community and cooperation rather than just offering money and goods to individuals.
Peer-to-peer giving, though not new by any means, also grew tremendously in 2020. GoFundMe is an example of one of the most popular peer-to-peer giving platforms. Donors gave over $44 million to feed America’s most vulnerable populations experiencing food insecurity made worse by the COVID-19 pandemic through America’s Food Fund on the GoFundMe platform last year. America’s Food Fund set a record by becoming the largest GoFundMe of all time.
Personal giving was also a much bigger trend in 2020, especially among Millennials. According to payment app Zelle, nearly 3 out of 4 millennials (defined here as those ages 25 to 34) have sent some kind of financial aid to family or friends or donated to a nonprofit since the Covid-19 pandemic began. The report is based on a survey of over 600 interviews a month of adults ages 18 to 72.
In addition to the joy that helping others through giving brings, there are also tax advantages. If you’re interested in giving strategies for 2021 or wondering how you can maximize your giving while minimizing taxes, please reach out and contact us.