Charitable Giving Surges in 2021
Amid the emotional and financial stress of the pandemic, Americans opened their hearts and pockets wider than they have in the past. Based on a DickersonBakker study of people who donated to at least one charitable organization in 2020, 90% of those polled said they expected to give even more through 2021. The study was released in the summer of 2021.
In 2020, charitable giving reached record highs, growing 5.1% since before the pandemic. DickersonBakker, a charitable giving consultancy firm, reported that it was one of the steepest year-over-year increases since it started tracking.
When polled in 2021, 59% of respondents said they expected to give about the same as they did in 2020, while 31% said they planned to give “a little” or “substantially” more.” Only 10% said they planned to give either “significantly less” (2%) or “somewhat less” (8%).
The increase in charitable giving corresponds strongly with donors’ sense of financial security. Nearly 75% of donors said their financial security was the same or better in 2021 than it was in 2020, while 79% said their savings and investments had increased in the past year.
Looking Ahead to Charitable Giving in 2022
In a blog post written just before Christmas, DickersonBakker noted that charitable giving should continue to rise in 2022, but probably not at the same rate it did in the two years prior. Rising interest rates projected in 2022 could mean that older Americans have more income to give away next year and could also spark more interest in annuities and trusts as giving vehicles.
Changes in tax laws could reduce some incentives to make charitable donations. However, if the new legislation increases the capital gains tax, it could incentivize high earners to donate stocks and real estate to offset capital gains.
DickersonBakker also noted that corporate giving and donations made through foundations could grow in 2022 as business returns to usual and corporate profits return to pre-pandemic levels. The firm projected, “All indicators suggest that charitable giving will remain strong well into 2022.” If you’re looking to claim some last-minute tax deductions through charitable giving, you still have a few days to connect with your favorite qualified 501(c)(3) organization and make a contribution.
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