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February 18, 2025

Carl G. Hamm webFrom the Desk of

Carl G. Hamm ¦ Partner

Sustaining Democracy

With dramatic changes in federal policy and the unexpected loss of government funding for nonprofits likely this year, organizations are scrambling to ensure their essential work continues with as little disruption as possible. In the face of this uncertainty, smart nonprofits are seizing this opportunity to establish or supplement their endowments as a solution for long-term stability, strengthening our society in the process.

Government funding depends on political shifts, budget cuts, and legislative priorities that mirror larger ideological divides regarding the government’s role. While some push for increased federal and state funding for nonprofit services, others argue for reduced governmental influence, resulting in a continuous cycle of funding instability.

The built-in stability of endowments allows organizations to adapt strategically to the unexpected rather than always reacting in crisis mode. A strong endowment also demonstrates thoughtful planning and financial responsibility to donors, inspiring their trust and ongoing investment through private philanthropy.

In 1835, Alexis de Tocqueville noted that our culture of voluntary charitable giving is a hallmark and strength of American democracy, unlike in other countries where the government acts as the primary funding source for social services. In today’s context, his insightful observation remains perhaps more relevant than ever before.

Each of us has the individual freedom—and is uniquely incentivized through our tax system—to financially support the causes and organizations that align with our personal values and priorities. This sense of personal responsibility and participation in improving civil society through charitable giving is fundamental to our democracy and way of life.

In this time of uncertainty, one thing remains clear: the generosity of individuals and families represents the enduring strength of American democracy. Now more than ever, nonprofits must prioritize financial self-sufficiency. As government funding becomes more unpredictable, organizations must turn to those who care most deeply about their existence to build financial resilience and sustain their important work.

Through philanthropic giving, we uphold the values of civic engagement, self-reliance, and collective action that de Tocqueville admired nearly 200 years ago. With healthy endowments strengthened through intentional, strategic fundraising, organizations can serve their communities, champion their causes, and ensure that American society thrives for generations to come—a legacy well worth pursuing as we work through the days ahead.

How U.S. Charitable Giving Is Changing

Although the $557 billion donated to charity by Americans in 2023 represents a 2.1% decline when adjusted for inflation, U.S. donations have increased significantly over the past two decades. According to Giving USA, giving has grown by approximately 42% since 2003. However, while overall charitable contributions have risen, the most recent available data shows that the percentage of Americans who give to charitable causes has decreased. This share dropped from 66.2% of all U.S. adults in 2000 to 45.8% in 2020. The total amount donated has risen, but the percentage of Americans who are donors has fallen.

Research has shown that the long-term decline in Americans’ participation in charitable giving accelerated during the first year of the COVID-19 pandemic. The proportion of Americans who contributed to charity dropped from 49.6% in 2018, the last year for which data is available, to 45.8% in 2020 — an almost 4% decrease over two years. The rate of Americans giving to charity had declined by 3.5% in the previous two years, suggesting that the pandemic may have hastened the decrease in the participation rate for giving.

Positive news: Donors who continue to support charities are contributing more than before, even when adjusted for inflation. The total amount the typical U.S. donor increased from $3,131 in 2018 to $3,651 in 2020, reflecting a 16.6% rise over just two years. Research also indicates that American donors with higher incomes, greater education, and more wealth are donating larger sums than they previously did.

The declining numbers of American donors are significant because philanthropy plays a key role in meeting the spiritual, intellectual, and material needs and aspirations of people from all backgrounds. COP, 2-12

Younger Donors: Issue-Driven & Technology-Focused

A new report from the Indiana University Lilly Family School of Philanthropy finds that giving across all generations between 2003 and 2021 has declined since 2008. Generation Z and Millennial donors are more focused on supporting issues than on specific organizations and consider themselves active social change agents. In addition, these donors are decidedly tech-forward, learning about and advocating for causes on social media, making donations online, and participating in crowdfunding at higher rates than older generations.

Other Key Findings

  • While basic needs and religion are top causes for philanthropic giving across all generations, giving to education is less common for younger donors.
  • Compared to Millennials who gave to religious causes, Generation Z donors who gave to religion were significantly less likely to support secular causes—a contrast to the historical trend of religious donors being more inclined to contribute to secular causes.

PND, 2-4

Top 25 Philanthropists Awarded $30 billion in 2024

Forbes reports that the total lifetime giving of the nation’s top 25 philanthropists rose 14% to $241 billion in 2024—$30 billion more than last year’s total—yet charitable giving hasn’t kept pace with their fortunes. Significant stock market returns largely supported the fortunes of the 25 biggest givers, which drove a combined increase in net worth to $1.6 trillion—an 18.5% year-over-year rise.

Top Givers of Note

  • Warren Buffett and his family topped the list in giving $5.3 billion last year—total giving $62 billion) over his lifetime (30% of his net worth).
  • George Soros has given away a larger percentage of his current net worth than anyone else on the list (76%).
  • MacKenzie Scott awarded more than $2.6 billion in 2024.
  • Jeff Bezos—worth an estimated $250 billion—moved up one slot with lifetime giving of $4.1 billion, notably the smallest percentage (1.6%) of his wealth among the top 25.
  • Bill Gates and Melinda French Gates (lifetime giving $47.7 billion; 26% of combined net.

Forbes, Jan 25

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