Inflation and Philanthropy

By Zoe Lawhorn

2022 is halfway over, and researchers are busy examining emerging financial trends and the practical implications for our nonprofit community. As inflation begins to dominate headlines, I wonder what the impact of yet another economic shift might have on our nonprofit community and individual philanthropic giving habits.

In 2021, giving increased across the board from the type of donor (business, individual, foundation, etc.) to every type of nonprofit recipient (arts and culture, education, human services, etc). American donors gave $484.85 billion total, reflecting a 4% increase from 2020.

According to The National Philanthropic Trust, “The largest source of charitable giving came from individuals, who gave $326.87 billion, representing 67% of total giving.”

I worked as a fundraiser for nearly ten years before coming to the Women’s Fund of Smith County, and from my experience in the field, I know that individual donors have always contributed the largest percentage of philanthropic support to nonprofits. This comes as a surprise to a lot of people, who tend to assume large corporations give the most away.

In 2021, corporate giving totaled $21.08 billion — and while that marked a 23.8% increase from 2020, it’s still a much smaller figure than what private individuals gave together.

Each part of the philanthropic puzzle combines to create critical support for the work of our nonprofits, and yet the individual donor has always been the largest collective contributor. You have to wonder what the impact of inflation might be on our comprehensive giving in the coming months.

One thing we know for sure is that inflation will certainly impact the bottom lines of the nonprofit community. As prices rise, and the value of the dollar contracts, the cost of providing services can expand quickly, busting projected budgets and increasing the pressure on nonprofits to do more with less.

It’s also likely if not inevitable that the most vulnerable people will be hit hardest by inflation, creating a surge in demand for nonprofit services.

Some experts fear that individual donations may go down in response to tightening household budgets, and they could be right; however, the last two very uncertain years have produced increased charitable giving, signaling that donors both large and small (with respect to their giving levels) understand how important their support remains, and so they continue to generously give.

While our vision of the financial forecast in the days ahead may be murky at best, one thing is clear: individual gifts make the work of our cherished nonprofits possible. Whether your support is in the thousands of dollars, or in the tens, you play a critical role in making much needed services available to those in need. Don’t underestimate the power of your giving.

As a collective giving circle, the Women’s Fund of Smith County leverages the giving power of individuals, and since 2009, we have awarded over $2.5 million in grants to 29 different nonprofit agencies. These grants have launched new and innovative programs, as well as expanded existing projects with far-reaching impact - not results for one year, but for many years to come.

All types of giving ultimately impacts people on an individual level, whether it’s a meal for a hungry child, medical care for the uninsured, a backpack full of much needed school supplies, or access to education.

So, as we continue to navigate uncertain financial waters, be encouraged that your generous act makes a difference; give what you can to the nonprofits whose missions align with your values. Volunteer your time, and rest assured that no matter the value of a dollar, your giving remains invaluable in its capacity to change lives.

Zoe Lawhorn serves as president of the Women’s Fund of Smith County, a collective giving circle of more than 350 women with a mission of transforming our community by funding programs that enrich the lives of women and children. Any woman with a giving heart is welcome to join our organization. Please visit www.womensfundsc.org for information about membership and outreach.

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