To the Editor:

Jeff Cain’s op-ed “Giving USA Misses the Boat on the True State of Generosity in America” (July 26, 2023) is out-of-line regarding the quality of research in the annual Giving USA report on Charitable giving.

The Giving Institute, where I am on the board-of-directors, in collaboration with the Lilly School of Philanthropy, reports on what the Internal Revenue Service identifies as tas-deductible charitable gifts. As such, Giving USA offers important longitudinal data for those of us who work in the philanthropic sector.

Historically, charitable giving has tracked at about 2 percent of gross domestic product, and when the economy grew, so too, did donor activity. Last year, several things happened: The market tanked in the last quarter, inflation was at a record high, and although the economy grew, charitable giving – as defined by the IRS – went down. That trend was replicated in the data monitored by the “AFP Fundraising Effectiveness Project.”

It is also true that the line between traditional charitable giving to established 501(c)(3) organizations is increasingly blurred by different forms of giving and acts of benevolence, including an increase in crowdfunding. Helping someone after a storm or personal tragedy through a platform such as GoFundMe is an act of kindness. But as a direct contribution to an individual – rather than to a traditional charitable agency such as the Red Cross – such giving is not tracked by the IRS, even if it constitutes charity in the mind of the donor.

New forms of giving are also apparent when socially conscious individuals, and even some corporations and foundations, invest in social-impact funds that target entrepreneurial activity in areas such as green energy and minority-owned businesses. Last year, such impact investing topped $1 trillion for the first time, a clear expression of investors’ interest in having a positive impact on society, if only 1 percent of that money went to traditional charities, 2022 would have been a banner year.

It is possible for two things to happen at the same time. While charitable giving went down, benevolence went up, reinforcing the concept that Americans are considerate and caring people. Giving in 2022 to recognized 501(c)(3) organizations may have decreased because of the additional avenues and increased competition for dollars that exist outside the philanthropic sector. This has not escaped the lens of those of us at the Giving Institute. The question is, given the data, how do we respond and engage more people?

Scott R. Lange

Founder & President

Visionary Philanthropic Consulting

Director, The Giving Instiitute