Pulse of Philanthropy: COVID-19’s Impact on Charitable Giving
Although the story of COVID-19 in the United States is still being written, the first bit of research is shedding some light on how the virus and the resulting recession are beginning to affect charitable giving.
The Lilly Family School of Philanthropy’s Women’s Philanthropy Institute at Indiana University just released “COVID-19, Generosity and Gender: How Giving Changed during the Early Months of a Global Pandemic.” It’s perhaps the first legitimate research into how people’s charitable giving is changing during this health and economic crisis. (For the purposes of the study, the “early months” of COVID-19 refer to data collected through the middle of May.)
During normal times, giving tends to track well with the state of the greater economy. For instance, during the Great Recession, when the economy was in turmoil, total giving declined by 7.2 percent in 2008 and then fell another 8.0 percent in 2009. The same seems to hold true for the early days of the current recession. A survey at the end of April found that 63 percent of nonprofit organizations reported decreased fundraising revenue during the first months of the pandemic.
Yet those declines are not falling equally across all types of charities. During recessions, contributions to basic human needs increases while all other categories decline. Indeed, during the early months of the pandemic, the study found that 21.4 percent of households planned to decrease their giving to education-, arts- and environment-related charities. The study notes, “Early data show that, similar to previous recessions, organizations dedicated to basic needs and health could fare better than those focused on religion, and especially better than those serving all other purposes.”
Yet COVID-19 hasn’t caused just a recession – it’s also analogous to a natural disaster. Although I acknowledge that it’s not precisely a disaster event, the virus has inspired a similar dramatic and sudden outpouring of funds going to organizations that are responding directly to the “disaster.” During the early months of this crisis, 32 percent of households made a charitable gift to an organization helping people who were struggling because of COVID-19 and the resulting recession.
We experienced the overwhelming philanthropic response in Door County as well. The United Way–Door County Community Foundation’s Emergency Response Fund (RespondDoorCounty.org) received perhaps 80 percent of its contributions during the short period from when we activated it in March until Governor Evers’ Safer at Home order was terminated in mid-May.
What’s fascinating is the universality of COVID-19-related giving. The study shows “no direct relationship between charitable giving in response to the pandemic and how greatly the state in which one lives was affected by the virus during the initial months of the crisis. This runs counter to studies on disaster giving, which show that those living in areas closest to a disaster are most likely to give for disaster aid.”
This seems to imply that at least during the early days of the pandemic’s arrival in the United States, our citizens were united as one country, and we were willing to help our fellow Americans, regardless of their state of residence.
One surprise was the amount of giving that did not involve a nonprofit organization at all. The study found that 48.3 percent of households gave to their community by doing things they wouldn’t otherwise have done, such as “ordering takeout to support restaurants and their employees, or continuing to pay individuals and businesses for services they could not render.”
Like many whose jobs were secure, my wife and I ordered takeout far more often than normal, and when I finally got a haircut, I also paid for the previous three appointments that had been canceled.
The study highlights one important, statistically significant demographic difference among the households included in the study. Among single men whose giving is declining, 23.4 percent attributed it to furloughs or business closures that have reduced their personal income. For single women, that number was a markedly higher 31.8 percent.
“There are also gender differences in the pandemic’s effects,” the study notes. “Women have been on the front lines of the crisis at work and at home – from comprising the majority of essential workers to having greater caretaking responsibilities for children and older relatives. It follows, then, that these roles have left little room for donating time and money, despite a strong body of research demonstrating that women are particularly inclined toward these behaviors.”
Although the recession will likely result in lower giving overall in 2020, the study concludes that “the fact that the majority of households did not adjust their giving during [the early months of the pandemic] can be viewed as a positive sign for philanthropy.”
Bret Bicoy, President and CEO, Door County Community Foundation
Contact Bret Bicoy at [email protected]