Will inflation dampen charitable giving this holiday season?
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We are less than a week away from Giving Tuesday, where charitable organizations look to raise additional funds during the holiday season. Una Osili, associate dean for research and international programs at the Indiana University Lilly Family School of Philanthropy, says the current uncertainty surrounding the economy could dampen charitable giving, but “unprecedented needs” in communities throughout the country have led to expanded charitable commitments.
“Households give when they have the financial resources to give, but also where there are opportunities to give and when they’re asked,” said Osili.
In an interview with the Associated Press, Osili said there are several factors at play with regard to charitable giving heading into the end of 2022.
“Certainly concerns about an economic slowdown have led to more uncertainty as consumers make those decisions about their giving about their spending, and also their saving decisions. They’re keeping that slowdown in mind,” Osili said. “However, we also know that there has been unprecedented need with the COVID pandemic, concerns about global racial and social justice movements, but also the humanitarian crisis in Ukraine and in many parts of the world have led many American households and donors around the world to expand their commitments and increase their generosity.”
Osili says generosity is a “core value” for Americans of all backgrounds. She says during an economic downturn, there are many more households in need of services, which means there are many households with fewer resources to assist those in need.
“Having said that, what we’ve seen during downturns is that Americans tend to prioritize giving to basic needs. So that is giving to organizations that assist those experiencing economic hardship that includes groups like the Salvation Army, United Way, local organizations, homeless shelters, soup kitchens, and so forth. So that I think is something that we can all take some encouragement from during the season, that during downturns, households do prioritize assisting their neighbors in need, even though they may themselves be dealing with some hardships.”
Osili says charitable giving across the board has not been able to keep up with inflation over the past several years. She says households are becoming more strategic with their budgets when it comes to giving.
“Understanding that your dollars can make a difference in your community, and then sitting down together as a family to prioritize the causes and organizations…making those decisions and then allocating those dollars to match those priorities. I think that’s the way that many Americans are approaching giving during this holiday season.”