Philanthropy Through Recession

By and large, philanthropy is quite resilient and can withstand short-term economic fluctuations.

Most recessions over the last 40 years have not significantly impacted the sector. Only The Great Recession had lasting effects on charitable giving. But even in this instance, the sector rebounded within 3 years, recovering equivalent giving levels. In the graphs to the right, you can see that total giving has steadily increased over the last four decades, even when adjusted for inflation. When recessions are highlighted, you can see that while the impact is evident, in the long run giving continued to rise.

Most charitable giving in the United States comes from individuals with high net worth.

The S&P 500 is the strongest indicator of wealth and, therefore, a direct correlation to high-net-worth giving. Yet, while giving follows the general up- and downward trends across time, it typically lags behind stock market volatility by about two years, effectively shielding philanthropy against short-term fluctuations.

External factors can affect different industry subsectors in diverse ways.

During The Great Recession of 2008, many subsectors saw decreases in giving. Yet, with a heightened need to access social services, healthcare, and scholarships, donors rose to the occasion by funding those causes. As philanthropy continues to respond to the unique impacts of the last couple of years, giving has risen to nearly pre-pandemic levels, with each subsector experiencing differing levels of growth and decline year-over-year. As this report is updated in the spring of 2025, it remains too early for recent market volatilities to be assessed related to giving.

Economic Background

The charitable sector is not an island but a part of the broader economy. The same macroeconomic factors that influence the US economy can also influence the philanthropic sector and, often, significantly impact philanthropic efforts. While many factors can affect movement in charitable giving, a few economic indicators rise above the rest.

The Giving USA Foundation found three indicators that give the best clues to individual charitable giving trends.

1. The S&P 500 Index is the greatest predictor of changes in charitable giving.

The Giving USA Foundation found that the S&P 500 was the strongest single predictor of charitable giving out of all the factors they considered for their annual revenue estimate models. The S&P 500 is far more volatile than the comparatively stable charitable giving trends, but the two increase and decrease together—with changes in giving usually lagging changes in the S&P 500 by one to two years. “Because stock market values are an indicator of financial and economic security,” the Foundation explains, “households and corporations are more likely to give when the stock market is up.

This is particularly true, they found, for high-net-worth donors, who are more likely to be directly invested in the stock market. In addition, gifts of appreciated stock make excellent charitable giving vehicles for high-net-worth donors when their investments are doing well.

2. Charitable revenue growth tends to correlate with Gross Domestic Product (GDP).

The GDP is value of all goods and services produced in the country. Gross domestic product (GDP) is one of the most helpful indicators for tracking and explaining changes in revenue across the nonprofit industry. Research shows that charitable revenue growth rises when the GDP is growing, and slows or even falls during periods of relative economic weakness.

Charitable giving in the United States has made up about 2% of total GDP for more than 40 years. In “boom” times, it has reached as high as 2.3%, and in recessions, it has dipped as low as 1.7%—though in the last 20 years it has not declined below 1.8%. This means that, in a slow economy, not only does giving slow down, but it also declines as a proportion the overall economy.

3. Tax Policy: When charitable deductions are higher, charitable giving rises accordingly.

Charitable giving is one of the primary ways that higher-income taxpayers reduce their tax liabilities. It is unlikely that the deductibility of their gifts affects which organizations donors decide to support, but it almost certainly affects how much they decide to give, when they give, as well as how much they choose to leave to nonprofits as charitable bequests.

Trends to Watch

While it is difficult to determine what external factors will play a role in future economic shifts, there are valuable insights to be gleaned from historical trends in giving. Below, you will find key trends and donor behaviors to watch for and consider as you develop a resilient fundraising strategy.

Charitable Giving Trends During Recessions

Overwhelmingly, total charitable giving has increased or stayed flat in current dollars every year since 1983 (Giving USA, 2024). In this time, any declines in overall charitable giving rebounded and continued an upward trajectory.

For instance, while a relative decline was seen following the 2020 and 2021 spikes of giving, early reports from the Blackbaud Institute saw an increase in giving of approximately 2% in 2024 and a compound annual growth rate in the sector of 1.8% over the last five years (2024 Trends in Giving, 2025).

Giving USA Foundation research indicates that, in the past, it has taken an average of three to four years for inflation- adjusted charitable giving to rise back up to pre-recession levels. Between 2008 and 2019, giving increased by $77 billion, from nearly $350 billion in 2008 to $427 billion in 2019. The Great Recession ended in 2009, and yet for the following decade, from 2010 to 2019, the total growth in inflation-adjusted giving was 33%.

Variances to Charitable Giving Across Subsectors

External factors can affect different industry subsectors in diverse ways. Giving can shift away from some causes, while donors prioritize others. For instance, during the 2008 recession, while many subsectors saw decreases in giving, people’s heightened need for access to social services, healthcare, and scholarships encouraged giving to those subsectors—presumably in response to the more pronounced needs in these areas exacerbated by recessionary trends.

Differences in the recovery timeframe were also evident during the Great Recession. While most subsectors rebounded in the following years, giving to the arts, culture, and humanities subsectors did not exceed pre-recession levels of giving again until 2015, in inflation-adjusted terms.

Long-Term Changes to Giving Behavior

In recent years, the breakdown of charitable dollars given by individuals, foundations, bequests, and corporations has fluctuated. Over the last 40 years, giving by individuals has begun to decline as a percentage of total giving, but remains the largest contributor to overall giving year over year. The increasing concentration of wealth throughout the US has resulted in more giving coming from fewer donors, and increases in giving through foundations and DAFs (donor advised funds).

History also shows us that there have been long-term changes in allocations of charitable dollars across subsectors. For instance, while faith communities continue to receive the majority of giving yearly, the proportion of giving to this subsector as a share of all organizations has declined since the early 1980s.

Expert Insights: The Case for Donor-Advised Funds

Although philanthropy is generally resilient through economic cycles, one form of giving has shown itself to be particularly so: individual giving through donor- advised funds (DAFs). In 2020, as givers responded to the COVID-19 pandemic and social justice movements, giving from donor-advised funds increased by 27% with particularly strong impact in specific subsectors. For example, Human Services giving was up 79% from DAFs compared to an overall increase of 9.7%; Societal Benefit was up by 51%; and Health up by 54.2% (National Philanthropic Trust, 2021). During the more protracted downturn of The Great Recession, giving from DAFs decreased by 7%, but that was significantly less than the contributions to DAFs that year, which decreased by 25%. DAF giving also rebounded quickly in 2010 (National Philanthropic Trust, 2020. Giving USA, 2021).

In 2009, the amount of funds granted from DAF accounts to charities was more than the total funds contributed to DAFs (Heist and Vance-McMullen, 2019). During the years leading up to and following the recession, the opposite was true—incoming contributions were greater than outgoing grants.

It appears that DAF giving can blunt the impact of potential decreases from other revenue sources during a recession. Funds can be donated to the DAF during period of economic growth; during these times, resources are likely also more readily available to nonprofits through other revenue channels. During periods of downturn, when giving is less abundant in other channels, the funds can be disbursed from the DAF—perhaps after having had the opportunity to grow. This channel can help smooth out the flow of funds to nonprofits.

A Few Tips for Making the Most of DAFs

DAF donors are intentional If a charity has DAF donors recognize them for who they are, inform them of your impact, and look to increase their giving.
If your database isn’t purpose-built for complex fundraising, it may obscure DAF donors. Look to define and tag these donors in your databases. With 13% of giving coming through DAFs, you probably already have DAF donors in your

7 Steps to Take Today to Recession-Proof Your Organization

Through historical analysis and understanding of recent trends in charitable giving, some key themes emerge that foster resilience. Here are just some examples of how you can continue to proactively future-proof your organization:

Diversify your revenue mix. Philanthropic organizations follow a multitude of revenue models. While different organizations may thrive using various combinations of revenue sources, organizations should avoid an over-reliance on certain sources. A survey of fundraisers in 2024 illustrated that a diverse revenue mix was one of the greatest determinations of resiliency.

Embrace digital transformation. From reducing your manual processes through workflow automation and AI tools to thriving in remote working environments and embracing new platforms, organizations must adhere to a new focus on delivering strong digital experiences to their stakeholders.

Find and target major donors. Data from our Vital Signs series—supported by the 2024 Genosity Commission Report in—found that, while the overall amount of dollars donated continues to grow, the number of individuals donating money since the last recession has been shrinking. Organizations should familiarize themselves with their donors on file as well as prospects who have the capacity to make a major gift. Additionally, many major donors search out alternative vehicles for giving and tax benefits to make their philanthropic dollars go further. Organizations should ensure they are prepared to accept non-cash gifts.

Focus on donor retention. While first-year donor retention remains a challenge among nonprofit organizations, multi-year retention rates remain strong. Marketing and fundraising strategies must be aligned to best frame and communicate the societal values embraced by an organization’s mission and programs.

Invest in a sustained giving program. Data shows that revenue per donor increases in the years preceding the two years following a donor’s commitment to a sustainer program (50% to 300%, with even the low end far exceeding the typical return for non-sustaining donors). As a strategy choice, there is substantial value to be had in sustainer fundraising (Sustainers in Focus, 2015-2016).

Add to your donor pool. Organizations need to focus on strategies that address the changing macroeconomic environment we find ourselves in. To provide the most long-term growth, organizations must continually add to their pool of donors. Recent Blackbaud Institute research into Gen Z giving behaviors, as well as spontaneous donor retention, illustrates the value of laying groundwork today for a wider, more engaged donor pool tomorrow.

Harness the power of peer-to-peer fundraising. The acceleration of avenues like crowdfunding, do-it-yourself, and peer-to-peer fundraising will continue to be a cohesive component of overall fundraising strategies. Speaking to individuals on a one-to-one versus a one-to-many level, these campaigns continue to gain traction, connecting people to the causes they care about through the channels they regularly use.

TIPS: How Nonprofit Finance Teams Can Drive Impact While Facing Recession Uncertainty

As they’ve proven time and again, nonprofits are spectacularly resilient. Your nonprofit has learned a lot over the past decade, giving you more tools and more opportunities to add value and refocus existing resources. Here are a few tips to guide you:

Understand where you are now. When the economy is unpredictable, or everyone is predicting a downturn, it helps to take stock of where you are, what your goals are, and how your priorities are aligned. Getting realigned on your priorities makes the decision process simpler if programs do need to be pulled back or funding needs to be shifted. It’s important to review this information so your team can be proactive in addressing funding issues or increased demand before they happen.
Create momentum in the short term. When there are storms in the forecast, it makes sense to be prepared. Depending on the last time your organization had to take an intense look at its finances, your financial ducks may already be well- aligned. But it never hurts to review the small ways money flows in and out of your organization. Look for ways to negotiate better rates, find new discounts, and trim unnecessary expenses. Also, fine-tune your income channels to make sure they are revenue-wise.
Plan for the long term. Given a long enough horizon, nonprofits will experience every economic cycle at least once. The organizations that successfully weather storms look farther than next week or even next year. Short-term adjustments are crucial for surviving economic uncertainty, but to thrive, you need to be prepared for the long-term shifts that will affect your organization. This data-driven approach also helps keep you from organizational inertia. You prune processes that are no longer serving you, even though that is the way it has always been done.
Create a foundation for the future. Learn more in this Cost Containment Guide for Nonprofit Finance Teams.

Conclusion

As your organization keeps an eye on the larger economic landscape, rest assured that downturns such as recessions are not, in and of themselves, indicators that charitable giving will be impacted in the long term. This report is just one resource your organization can use to better understand the macroeconomics of philanthropy.

As the last few years have shown us, change is here to stay and can promote more critical and nimble approaches to fundraising and donor management. Tips like those listed above can give you the edge you need to thrive through times of uncertainty.

Ashley Thompson
Matthew Nash
Kate Averett Anderson
Carrie Watkins
Lori Poer

With thanks to Giving USA™ for their research partnership.

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Philanthropy Through Recession

Table of Contents

Introduction

Those who know what’s come before are best prepared for what’s ahead.