Report: People With Lower Incomes Donate Less, Say Wealthier People Should Donate Instead
A special report from the BBB Wise Giving Alliance revealed trends in donations over the past five years that may sound an alarm for nonprofits: Giving has declined among younger people and people with lower household incomes.
The results of its report, "Special Donor Trust Report: Donor Participation,” comprised responses from more than 2,100 U.S. adults who completed the survey in December 2021. A secondary study analyzed responses from more than 1,100 Canadian adults.
“News about declining numbers of households contributing to charities is concerning as this makes the sector more vulnerable and less pluralistic,” H. Art Taylor, president and CEO of BBB’s Give.org and co-chair of the Generosity Commission’s Policy Task Force, said in a statement. “Unfortunately, our survey also shows that people who stopped or decreased their giving to charities over the past five years are least likely to say they might increase their giving moving forward.”
Here is a closer look at the findings of the U.S. study.
People Wish Wealthy Would Give Instead
Most people who reduced or stopped giving said they don’t earn enough to donate and that people with more wealth should give to charity instead of them. Specifically, among people with a household income above $70,000 (the median U.S. household income was $70,784 in 2021), 59% of those who stopped giving said wealthier people should donate instead. That’s compared with 47% of all people who stopped giving.
Generally speaking, 6.1% of people with a household income less than $70,000 stopped donating in the past five years, and 19% said they decreased their contributions. Conversely, only 10% of households with an income of $200,000 or more reported decreasing or stopping their charitable giving.
Only 13% of people with a household income less than $70,000 increased giving compared with 29% of people with a household income of $200,000 or more. People with household incomes less than $70,000 were also less likely to maintain their giving (42% versus 49%, respectively).
These trends may have developed due to inflation rates and the relative stagnation of wages around the time the survey was conducted in 2021.
Gen Zers Want to Be Asked to Give
The youngest age group in the study — Generation Z, whose members were aged 18 to 24 in 2021 — reported significantly different contribution behavior compared with the oldest group — matures, aged 76 and older.
While 71.6% of matures maintained or increased their contributions, only 42.2% of Gen Zers reported the same. Further, 29.7% of Gen Z participants stopped making or decreased donations, while only 19.3% of matures did the same.
There were some surprising findings on the reasons for decreased giving across generations. Specifically, only 27.3% of Gen Zers cited financial constraints as the reason they stopped giving to charity; they were more likely to say they stopped giving because they hadn’t been asked to give (45.4%), or because they don’t feel connected to the charity (about 27%). For baby boomers, 76.9% stopped giving because they couldn’t afford to, while 3.8% stopped giving because they hadn’t been asked to give.
People Give More Because It Feels Good
The biggest reason for increased or maintained contributions was because donating makes people feel good, with more than half of people who maintained (53.8%) or increased (56.6%) their contributions saying so.
Many people who increased their giving agreed with the statements “I feel connected to a community” (64.1%) and “if I fall, others will catch me” (54.2%). In comparison, only 29.6% and 28.7%, respectively, of people who decreased their donations said the same. This trend was similar among participants with household incomes above $70,000 — 47.8% of those who stopped giving and 70.5% of those who increased contributions said they felt connected to a community.
Gen Zers who maintained their contributions were more likely than matures to say they did so because they wanted to be part of something bigger than themselves (47% versus 19.6%). They were also more likely to say they donated to build their reputation (12.1% versus 0%, respectively).
Other reasons for donating were that “everyone should contribute what they can” — most commonly reported by baby boomers (34.2%) — and because of their faith or religion — most commonly reported by matures (27.5%).
Outlook for Charitable Sector
Approximately 64% of people surveyed were not surprised to hear that the percentage of American households donating to charity dropped from 66.2% in 2000 to 49.6% in 2018; however, 61.8% were still concerned about it. This is not the only data to show drops in donations. The latest data from the Fundraising Effectiveness Project and Giving USA indicate declines in charitable giving in 2022.
In order to make up for this decline in giving, nonprofits must recognize what potential and current donors consider important when deciding to donate. Here are some of the themes survey respondents said would impact their future giving:
- Donor upgrades. People who donated more reported they would increase their contributions moving forward if they knew more about what would be done with their donation (40.3%), were more easily able to find charities serving their community (27.9%), and could more easily access federal tax deductions (26.8%).
- Donor renewals. People who stopped making contributions said they would be highly likely to increase contributions in the future if it was easier to find charities serving their community (17.6%) and if charities were led by people with the same political identity as them (17.6%).
- Nonprofit insight. Millennials and Gen Zers were most likely to say that knowing more about community charities and charities led by people with similar sociodemographic backgrounds would make them more likely to donate.
- Emerging channels. Younger generations were more likely to trust solicitations from people they know via giving circles, social media, crowdfunding, or TV.
- Donor engagement. People who increased or maintained their giving were more likely to say they had positive experiences when they were more engaged with charities. For example, 58.6% of people who were engaged with charities as recipients of services or participants in a program reported highly positive experiences, compared with 23.2% of those who were not actively engaged with charities.
Related story: What Americans Think About Nonprofits, Per New Study