Charitable giving by U.S. households has declined steadily over the past two decades, a pullback recorded among families of all major racial and ethnic backgrounds, according to data released Tuesday.
The Giving Environment report by the Indiana University Lilly Family School of Philanthropy explores charitable giving trends by race and ethnicity—a topic that has not been extensively studied, according to the report—and looks at declines in giving among communities of color during the nearly two-decade period from 2000 to 2018.
The report—also part of the school’s Everyday Donors of Color research series, which examines what it labels as the “declining donors” phenomenon—expands upon previous research, which showed a significant drop in the percent of U.S. households that gave to charity between 2000 and 2018, while also examining how various factors help explain giving rates among different racial and ethnic groups.
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“Our previous research found that the share of all U.S. households that give to charity dropped from about two-thirds to about half between 2000 and 2018. In our new study we see that the decline in participation in giving was experienced across races and ethnicities, with different groups seeing differences in the timing and extent of the declines,” says Una Osili, Ph.D., associate dean for research and international programs at the Lilly Family School.
Though overall participation rates declined among all racial and ethnic groups in the U.S. during the period in question, the report concludes that the timing and extent of these declines was different among each group and was influenced by both economic and non-economic factors, such changes in religious participation and affiliation, engagement in informal giving, and a decrease in interpersonal trust.
Among the key findings was how religious giving rates declined between 15% and 25% for all groups between 2000 and 2018, with Hispanic-American households experiencing an 18% decrease. Secular giving rates also experienced an overall decline across all groups, ranging from a decrease of 6% among Asian-American households to a decrease of 24% among American-Indian households.
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“Several factors appear to have influenced declines in giving participation by donors of colors. Economic shocks such as recessions can have long-lasting implications over time for everyday donors from communities of color, especially for their financial giving. Trust in institutions and trust in individuals also affect whether, where and how these donors give,” Osili says.
According to the report, the recession of 2008 served as a key turning point. Giving by American-Indians decreased by 11% pre-recession and another 7% following the recession, meanwhile, Asian-American giving rates increased by 8% before the recession and declined by 21% post-recession. The report cites these figures while suggesting that times of economic downturn influence philanthropic behavior by race and ethnicity in different and complex ways.
“People of color are often disproportionately affected by economic downturns and other financial shocks,” says Osili. “Closing the racial wealth gap and engaging donors of color in culturally relevant and appropriate ways are both critical to increasing philanthropic participation and fostering a more inclusive and equitable society.”
Chief among the non-economic factors that help explain the decline in giving rates is a gradual decline in interpersonal trust among all racial and ethnic groups. In particular, interpersonal trust among Hispanic-Americans declined more substantially than other groups; around 26% of Hispanic-Americans agreed that others can be trusted in 2000, while only 8% agreed in 2022.
The Giving Environment explores the implications of these and other findings for nonprofit professionals, including charitable organizations seeking to develop meaningful ways of engaging everyday donors of color while aligning with the values and preferences of diverse communities. The report also includes case studies illustrating some of the various ways that diverse communities of color practice generosity, such as funding collaboratives, giving circles, and partnerships with culturally relevant institutions and organizations.
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“Philanthropy does not conform to a one-size-fits-all approach,” Osili says. “It’s important for nonprofits and philanthropy professionals to understand the formal and informal channels through which communities of color practice generosity and to adapt their strategies for reaching and retaining donors of diverse backgrounds and rich traditions of generosity. Authentically engaging donors in long-term efforts to build trust in their organizations is also important, as our research suggests trust is another important factor in developing strong relationships.”
The report concludes that philanthropy does not conform to a one-size-fits-all approach, while acknowledging that communities of color may have a broader notion of philanthropy that goes beyond monetary giving.
Another key observation concerns the rise of digital fundraising and recurring giving, especially among younger donors, which presents an opportunity for nonprofits to reach a diverse donor base through the utilization of technology-driven fundraising solutions.
The report is also supplemented by a second new report, The Speed of Trust: An Experiment Examining the Effect of Trust on Giving among Members of Diverse Racial/Ethnic Groups, which explores whether a participant’s awareness that a charitable organization is highly trusted by others affected that donor’s willingness to donate to that charity and/or to give directly to a person in need, while also examining whether willingness to give in either way was influenced by the participant’s race or ethnicity.
The study concludes that the trustworthiness of an organization is an important factor in a donor’s decision to give to a charitable organization, mirroring the sentiments of the Giving Environment. Both reports were supported by funding from the Bill & Melinda Gates Foundation.
“Generosity is inherent in all cultures; it is expressed and carried out in different ways in different communities. By better understanding the diverse practices and long-term giving trends of donors of color, both donors and nonprofit organizations gain valuable insights on ways they can come together to achieve shared goals,” Osili says.
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