Giving USA: the results are in on 2020 | June 2021
The Giving USA: The Annual Report on Philanthropy is “the longest running, most comprehensive report on philanthropy in the United States”. The report on the unprecedented time that was 2020 recently dropped. It answers the lingering questions about how the stunning events of last year impacted giving and, most pertinent to us, the arts & culture sector.
So what happened?
2020 charitable giving in the United States broke records — gifts from individuals, corporations, bequests, and foundations totaled $471.44 billion, an increase of 5.1% (in current dollars) from 2019. As the report notes, this equates to more than $1.29 billion per day. Individuals contributed 78% of that amount. (The wealth profile of the individual givers, bolstered by the impact of growth in the S&P 500 and the market recovery in 2020, are all contributing factors; the majority of Americans are continuing to struggle financially.)
But within those record numbers is a serious gut punch. While seven of the nine charitable sectors* saw growth, giving to the arts, culture, and humanities sector is estimated to have declined 7.5% to $19.47 billion. When adjusted for inflation, the decline is 8.6%.
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$19.47 billion may sound like a lot. But for yet another year, giving to the arts — a $800+ billion industry that represents over 4% of America's GDP and employed over 5 million workers pre-Covid — remains stagnant at 4% of total American giving. This is more staggering when you consider that arts and culture represents a greater portion of the economy than transportation, tourism, and agriculture.
Why the decrease? The Arts Funders Forum (AFF) research program offers some insights. Our data indicates that rising generations — those who represent the future of cultural philanthropy and are increasingly making decisions for their family philanthropies — do not see the link between arts giving and social impact. We know that rising gen donors want to make transformational impact through their giving. What’s more, we’ve seen a decline in relevance of the institutional system; rising gen donors say there is little to no transparency about the destination of their philanthropic gifts to organizations. (Our research program puts quantitative and qualitative data together, to develop and drive new narratives on how the arts impact our society, and why the arts are an essential force. Read more here.)
So, friends, we have much work to do.
Even as people across the globe turned to art, music, and creativity to stay sane and safe in 2020, there is obviously a disconnect between the importance of art in our lives, the call to support artists and the arts infrastructure, and the knowledge of how to best do so.
The Giving USA report articulates again that those who can give do so in times of crisis — when need and relevance are clearly communicated. But AFF research shows us that both art funders and cultural leaders tell us that the arts do a subpar job of expressing the sector’s value to society — art and culture is considered a “nice to have” not a “must have.” Therefore, we must continue to clarify the role of the artist, arts funder, and arts organization — essential to global progress and our humanity. Together, I believe there are steps we can take to reverse these trends and inspire a metamorphosis. So let’s get to work:
1. Organizations must tell new narratives about the impact of the arts on our most urgent global challenges: It is vital to position the institution as a conduit to the cause. The next generation of arts funders and investors is passionate about supporting institutions, collaborators, incubators, and creative entrepreneurs who serve as drivers, catalysts, and resources to solve our most urgent global challenges. Arts organizations are called upon to define their role in democratically advancing our society. Organizations can best do this by listening to what communities want and hearing about the change they wish to see. Then, they can dive into that work with transparency and honesty. They can tell the stories of how the organization - in partnership with the community - promotes and advances those causes. It is possible for organizations to tell stories about how they achieve social and educational impact AND are dedicated to top-notch performance, exhibition, collection, and care. These are not mutually exclusive.
2. Funders and investors can develop alternative funding models that better align with their investment preferences and values: for-profit models, social enterprise, impact investing (to name a few) are vehicles that appeal to the rising generation. These models also align with how artists actually work — as creative entrepreneurs — and can help funders better achieve impact, legacy, and transformational giving in the cultural economy.
3. Create more — and more effective and groundbreaking — partnerships and collaborations across industries: this will leverage philanthropic possibilities and democratize the traditional base of supporters.
If you would like to talk further about these topics, please reach out.
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*The sector characterized as “health” also declined, attributed in part to the cancellation of in-person fundraising events that drive giving to disease-specific health organizations. The sector that saw the biggest gain is “public-society benefit organizations”, which includes a range of entities from donor advised funds to civil rights organizations.