COVID-19’s Impact on Charitable Giving

While the story of COVID-19 in the United States is still being written, the first bit of research is shedding some light on how the virus and the resulting recession is beginning to affect charitable giving. 

The Indiana University Lilly Family School of Philanthropy’s Women’s Philanthropy Institute just released “COVID-19, Generosity, and Gender:  How Giving Changed During the Early Months of a Global Pandemic.”  It’s perhaps the first legitimate research into how people’s charitable giving is changing during this health and economic crisis.  Note that for purposes of the study, the “early months” of COVID-19 is based on data collected through the middle of May.

In normal times, giving tends to track well with the state of the greater economy.  For instance, during the Great Recession when the economy was in turmoil, total giving declined by 7.2% in 2008 and fell another 8.0% in 2009.  The same seems to hold true for the early days of the current recession.  A survey at the end of April found that 63% of non-profit organizations reported decreased fundraising revenue during the first months of the pandemic.

Yet those declines are not falling equally across all types of charities.  During recessions contributions to basic human needs increases while all other categories decline.  Indeed, during the early months of the pandemic the study found that 21.4% of households plan to decrease their giving to education, arts, and environment related charities.  The study notes “early data show that, similar to previous recessions, organizations dedicated to basic needs and health could fare better than those focused on religion, and especially better than those serving all other purposes.”

Yet COVID-19 hasn’t just caused a recession, it’s also analogous to a natural disaster.  While I recognize it’s not precisely a disaster event, the virus has similarly inspired a dramatic and sudden outpouring of organizations directly responding to the “disaster.”  In the early months of this crisis, 32% of households made a charitable gift to an organization that serves people struggling because of COVID-19 and the resulting recession. 

We experienced the overwhelming philanthropic response in Door County as well.  The United Way – Door County Community Foundation Emergency Response Fund (www.RespondDoorCounty.org) received perhaps 80% of its contributions in the short period from when we activated it in March until Governor Evers’ Safer-at-Home order was terminated in mid-May.

What’s fascinating is the universality of COVID-19 related giving.  The study shows “no direct relationship between charitable giving in response to the pandemic and how greatly the state in which one lives was affected by the virus during the initial months of the crisis.  This runs counter to studies on disaster giving, which show that those living in areas closest to a disaster are most likely to give for disaster aid.”  This seems to imply that at least in the early days of the pandemic’s arrival in the United States, our citizens were united as one country and we were willing to help our fellow Americans, regardless of in which state they lived. 

One surprise was the amount of giving that did not involve a non-profit at all.  48.3% of households gave to their community by doing things they wouldn’t otherwise have done such as “ordering takeout to support restaurants and their employees or continuing to pay individuals and businesses for services they could not render.”

Like many families whose jobs were secure, my wife and I ordered take-out meals far more often than normal and when I finally got a haircut, I also paid for the previous three appointments that were cancelled. 

The study highlights one important statistically significant demographic difference among the households included in the study.  Among single men whose giving is declining, 23.4% attribute it to furloughs or business closures reducing their personal income.  For single women, that number was a markedly higher 31.8%. 

“There are also gender difference in the pandemic’s effects,” the study notes.  “Women have been on the frontlines of the crisis at work and at home – from comprising the majority of essential workers to having greater caretaking responsibilities for children and older relatives.  It follows, then, that these roles have left little room for donating time and money, despite a strong body of research demonstrating that women are particularly included toward these behaviors.”

While the recession will likely result in lower giving overall in 2020, the study concludes that “the fact the majority of households did not adjust their giving during [the early months of the pandemic] can be viewed as a positive sign for philanthropy.”

This article, which originally appeared in the Peninsula Pulse, was written by Bret Bicoy, President and CEO of the Door County Community Foundation.

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