A recent Wells Fargo study finds that while 67% of Americans gave to charity in the past year, economic worries have led to a decline in charitable contributions for many, with 29% reporting they gave less this year than the previous one. Half of the respondents (51%) even stated they didn’t have enough money to give. Despite mounting economic challenges, generosity remains a core value for many Americans, even as financial concerns cause some to tighten their purse strings.
The research highlights the tension between people’s desire to contribute to meaningful causes and the financial realities they face. A striking 52% of Americans say their reduced charitable giving directly results from the current economy, underscoring the strain caused by rising costs, inflation, and other economic pressures.
Stephanie Buckley, head of Trust Philanthropic Services at Wells Fargo, explains, “The data shows us that the pinch of rising costs is driving a moral dilemma. Many Americans are in a standoff between what they want to do and what they can do.” Despite this dilemma, a significant portion of Americans continues to support charitable causes, with 53% of givers donating the same amount as last year and another 19% giving more.
Happiness is a Key Factor of Generosity
Happiness and personal values are key motivators behind American generosity. Nearly half of those giving (46%) say it brings them happiness, and 45% donate because it aligns with their personal values. Additionally, 32% give due to a personal connection to the cause, and 25% feel a moral obligation to contribute.
Interestingly, financial incentives like tax deductions or peer pressure are not major factors — only 10% donate for tax benefits, and just 5% give because others are doing so.
Charitable Givers Express Desire for Better Planning
The study also reveals that while many Americans are committed to giving, few seek professional advice on optimizing their charitable contributions. Over half (52%) report not receiving any advice on giving, and 27% rely on friends and family for guidance. Despite lacking structured advice, 57% of Americans express interest in being more strategic about their charitable donations.
Buckley recommends a more thoughtful approach to philanthropy: “Not having a plan can often lead to a ‘smear the peanut butter’ approach, where people write checks and donate without thinking about how it aligns with what’s really important to them. Having a plan can help block out some of the noise and ensure you are giving with intention.”
Giving Tuesday Still Lacks Awareness
The study also examined the impact of Giving Tuesday, a global day of giving that follows Thanksgiving. Surprisingly, 64% of Americans have never heard of Giving Tuesday, though of the 36% who are familiar with it, 40% participate, and 17% say it encourages them to donate more than they originally planned.
As Buckley notes, “The idea behind Giving Tuesday is to inspire a wave of generosity. It’s a moment to bring us together, with intention, to have an impact on the communities around us.”
For those unfamiliar with the event, she encourages people to consider donating time, money, or talent to causes that are meaningful to them, particularly as the year-end giving season draws near.
Here are some strategies to foster greater generosity:
- Budget for Giving: Many Americans already budget for their essential expenses, so incorporating charitable donations into their monthly budget can make giving more consistent. Setting aside a fixed percentage of income, no matter how small, ensures generosity becomes a regular habit.
- Give Time, Not Just Money: Volunteering time or offering skills can be just as valuable, if not more so, than monetary donations. Many nonprofits rely on volunteers to help them fulfill their missions, and offering time can often directly impact communities.
- Support Local Causes: Directing donations to local charities can help strengthen communities and support smaller organizations that often struggle for funding. Local giving also tends to create more immediate, tangible benefits.
- Create Workplace Giving Programs: Employers can encourage employees to donate through workplace giving programs, where employees can set up automatic payroll deductions for charity. Matching donations can also incentivize giving.
- Research and Optimize Giving: Americans can be more strategic in their giving by researching causes or organizations they are passionate about. Doing so can ensure donations are going to organizations that are efficient and transparent in their use of funds.
- Make Use of Giving Days: Participating in giving days like Giving Tuesday can help focus charitable giving during the year-end season. Being aware of these days can encourage both spontaneous and thoughtful donations.
- Give to People in Need: Small acts of kindness, like helping someone in need, can be as valuable as large-scale donations. Whether it’s providing a meal, offering help with errands, or donating clothes, personal gestures of generosity can have a profound impact.
- Encourage Others: Inspiring friends, family, and coworkers to engage in charitable activities, like participating in food drives or fundraisers, creates a ripple effect. Social influence is powerful; encouraging others to join can amplify the impact.
Overall, despite the economic struggles many Americans are facing, the spirit of giving persists, with many finding ways to contribute even in difficult times.
