In December, the American financial information website MarketWatch covered an intriguing development regarding Americans and their charitable giving.
According to a report from the Indiana University Lilly Family School of Philanthropy and Vanguard Charitable released in 2019, the percentage of Americans donating to charity fell substantially from 2000 to 2016.
As of 2016, 53 percent of Americans donated to charity, in contrast with the 66 percent who contributed in 2000. This original figure remained steady until the Great Recession hit America. The report’s co-author Una Osili, associate dean for research and international programs at the Lilly School, said this figure fell and then took a nosedive after 2010. The decline represents a whopping 20 million fewer households giving to charity in 2016.
Declining donations to charity make us wonder what could possibly be driving declining donations to charity.
Osili shared an interesting insight: “Attending services is correlated with giving to religious organizations, but it’s also correlated with giving to secular groups.” Charitable giving is a core value in most of the world’s major religions. A Baylor University study found that people of all religious backgrounds are more likely to donate to charity.
However, religious devotion in America has changed significantly in recent years. The portion of the population who identifies as an atheist, agnostic or “nothing in particular” has grown from 17 percent in 2009 to 26 percent in the present, according to surveys from the Pew Research Center. Sixty-five percent of Americans identify as Christian, marking a 12 percent decline since 2009, according to Pew.
Traditionally, religious organizations have received the bulk of Americans’ charitable donations. Along with the general decline in giving, the amount of donations to religious organizations has been declining. Although religious groups were the primary recipients of charitable dollars in 2018, it was the first year that religious donations fell under 30 percent according to a Giving USA annual report on philanthropy.
This leads us to ask why this decline is occurring. The Lilly School report found that millennials are giving less of their income to charity than their baby boomer and Generation X predecessors. Indeed, the Great Recession has significantly affected people’s economic prospects. With an increased cost of living concerning education, food, housing, and healthcare, younger Americans are especially pinched when it comes to spending their money on charity.
Time will tell if millennials will pick up their charitable giving. Nevertheless, this is a worrying trend. Charitable giving has been a hallmark of American civic culture — it played a massive role in providing aid to millions of Americans before the advent of the welfare state. Sadly, the welfare state has become so ingrained throughout American culture that it has crowded out certain social services that private institutions used to provide.
Policymakers should strongly consider tax reform, containing inflation, and deregulating housing as a means of making the cost of living more manageable, while also providing a robust economy. From there, millennials will be able to have enough disposable income and time to pitch into charities and other related activities outside of the workplace.