New report finds significant charitable activity outside of nonprofits
The annual “Giving USA” report and other tallies of financial donations to charities are widely considered the best measures of American generosity. But new research suggests that a significant share of Americans are giving money that isn’t counted because it doesn’t go to nonprofits.
According to research, almost a third of Americans donate money to organized community organizations that are not registered charities, such as self-help groups or rental assistance funds. Additionally, about a third make cash donations to individuals, often friends or family members, through direct payments, crowdfunding efforts, online fundraisers, or other means. .
These findings are the first in a series of reports published by GivingTuesday. The organization behind the annual post-Thanksgiving giving blitz that brings in billions in donations to the charitable world takes a deep dive into philanthropy in all its forms.
Data Commons, the research arm of GivingTuesday, aims to measure what experts say is hard to measure but increasingly important to understand: the wide range of informal and often individual ways in which people pursue social good, including including self-help groups, crowdfunding platforms like GoFundMe, meal trains for sick neighbors, and neighborhood rental funds.
These informal donations aren’t counted in the annual “Giving USA” tally, which recently reported $471.4 billion in support for nonprofits in 2020. GivingTuesday researchers hope to soon have estimates on the amount of charity missed in these counts.
This week’s report is based on surveys of 1,000 people in each of the seven countries. It examines models of charity – both financial and non-monetary – and reinforces the common view that much of the world practices philanthropy in ways unlike American-style giving.
In Canada, Britain, and the United States, giving primarily focuses on cash and in-kind contributions to registered charities, according to Data Commons surveys.
The other four countries – Brazil, India, Kenya and Mexico – have less robust formal charitable systems, but still see remarkable expressions of generosity. Eighty-two percent of Kenyans, for example, are “super givers” who donate money, items and time. Ninety-seven percent of Kenyan respondents said they had given money in the past year, 37 percentage points higher than the share of Americans who said the same.
The study also found that very small proportions of people in any country gave through only one means. Only 8% of Americans donate just money, goods or time.
Still, “the charitable sector is very focused on one particular type of giving and a particularly transactional relationship with donors,” says Woodrow Rosenbaum, Chief Data Officer of GivingTuesday. “That’s not how they prefer to be engaged, so we’re leaving a lot of opportunities on the table by not embracing it, celebrating it, and understanding it better.”
Data Commons continues to investigate and plans to report findings regularly. He is also hosting a webinar on Thursday, April 14 to discuss, among other topics, the history and traditions of giving in communities, self-help groups, and other ways people organize around their giving.
What motivates donors
Philanthropy experts who study the decline in giving by average Americans argue that more research and attention should focus on giving outside of the nonprofit sphere. Philanthropy ignores the many other ways people support the common good, argues Stanford scholar Lucy Bernholz.
Bernholz and his colleagues at the Center on Philanthropy and Civil Society held 33 focus groups with low- and middle-income families across the country in 2019 to understand the ways Americans give. When asked how they try to make the world a better place, only 20% cited donating money.
“Participants rarely mentioned tax codes in reference to their giving, but instead discussed local giving, civic engagement, and a myriad of informal acts of giving, including sharing kindness and connecting with others – and they spoke of these acts often and enthusiastically,” the report noted.
the Generosity Commission, which funded the center’s study, is conducting additional research on self-help groups and other expressions of charity that take place outside of nonprofits. Launched in October with $2 million in funding of some of the largest foundations in the country, the commission said it aims to understand and “tell the whole story” of generosity and examine whether the decline in monetary giving partly reflects a change in the way people define and engage in philanthropy.
Researching all forms of giving, not just cash contributions, will help nonprofits better understand what drives charitable behavior, says Rosenbaum of GivingTuesday. It will also offer insight into how people want to create a better community and world.
“When we only measure one type of donation, we miss a lot of people,” he says. This raises equity issues for people whose cultures value forms of giving other than cash donations made to a nonprofit organization. “If we don’t count how people give, we don’t give as much to their desire to support the community as other donors.”
The Charities Aid Foundation publishes similar research on generosity that examines financial giving, volunteering and helping strangers. The 2021 edition of its “World Giving Index” found Indonesia to be the most generous country in the world: more than eight in 10 Indonesians gave money in 2020, and its volunteer rate was over three. times the world average. Kenya ranked second, while the United States – which was once among the top 5 countries in the declining ranking since 2018 – was 19th.
Unlike GivingTuesday, the Charities Aid Foundation does not investigate whether donations are made through non-profit organizations or outside the sphere of registered charities.
Data teams in 50 countries
Data Commons was born out of efforts to track GivingTuesday’s contributions to nonprofits. It now collects and analyzes donation data throughout the year from some 300 sources, including charity payment processors, donation platforms and donor-advised funds.
Investigative work represents new research. GivingTuesday leaders say it’s always been their intention to encourage generosity of all kinds around the world, not just cash donations. The organization now has data teams in 47 countries to study and track donations.