Many are unfamiliar with sector’s services, institutions, and debates affecting philanthropy’s future, Lilly Family School of Philanthropy research shows
At a time when there is concern about public confidence in society’s institutions, Americans have a broadly favorable impression of charitable giving and nonprofit organizations, but many know relatively little about how philanthropy functions, its impact on their lives, or how its current controversies could shape the future, a new study from the Indiana University Lilly Family School of Philanthropy finds.
The report, What Americans Think About Philanthropy and Nonprofits, examines public awareness, attitudes and perceptions of philanthropy, philanthropic sector institutions, and policies that govern and affect charitable giving. It is based on a nationally representative survey of 1,334 adults conducted in summer 2022 (additional information is in the methodology section below). The research is funded by the William and Flora Hewlett Foundation.
Americans see philanthropic giving as valuable: more than three-quarters of those surveyed feel that society as whole benefits a large or moderate amount when Americans donate money to charity. About 80% said that in-kind giving (i.e., giving property such as clothes, household items, or a vehicle to a nonprofit), giving money to a qualified 501(c)(3) nonprofit, and direct person-to-person giving were very or somewhat important. Three out of four felt that mutual aid was very or somewhat important.
People surveyed generally defined philanthropy as the giving of time and/or money to nonprofit organizations. About four in 10 included giving of ties (making connections across one’s networks) or testimony (i.e., advocacy, honoring lived experiences, and bearing witness to stories). Younger people (Millennials and Gen Z), women, people with more education, and donors had more expansive views of what constitutes philanthropy compared to older people (primarily Baby Boomers and Gen X), men, people with less education, and nondonors. Philanthropy and nonprofits were viewed more positively than government and for-profit entities.
Yet despite these generally favorable opinions, just 5.4% of people surveyed said they or anyone in their immediate family received services from a charitable organization or nonprofit in the past year. Considering the many ways people engage with nonprofits in daily life, from education, disaster relief and religious services to amateur athletics, civic beautification or the arts, this suggests many Americans may not recognize that these and other public services are provided by nonprofits.
Additionally, only one in three people is aware that the percentage of Americans giving to charities declined markedly over the past two decades, even though the decrease has been widely discussed in the media and other public forums for years. People who give to charitable organizations were not significantly more likely to identify this trend than were nondonors.
“Although the American public appears to have confidence in philanthropy compared to the government or private sector, there are some key challenges ahead,” said Una Osili, Ph.D., associate dean for research and international programs at the Lilly Family School of Philanthropy. “American households are less knowledgeable about the specific benefits that the philanthropic sector provides and have concerns about the overall transparency of the sector. This study helps us better understand public views, which in turn can bolster the efforts of nonprofits and the sector’s leaders to help build greater levels of knowledge and trust that are vital to sustaining philanthropy, with mutual benefit to donors and recipients alike.”
The study also explored how aware and knowledgeable the public is about various philanthropic entities. In general, less than one in three respondents said they were familiar with any of the philanthropic entities listed, which included private, community and corporate foundations; crowdfunding campaigns; limited liability companies; donor-advised funds; giving circles; and impact investing.
A plurality of respondents was familiar with community foundations (37.3%), followed by crowdfunding campaigns (31.2%). On the other end of the spectrum, fewer than one in 10 indicated familiarity with giving circles (7.9%) or impact investing (6.6%).
Larger percentages of Americans said they had “heard of” many of these charitable entitles, although they lacked a sense of familiarity with them. People with more education and those who more frequently attended religious services rated themselves as more knowledgeable about charitable giving and philanthropy.
Levels of trust in all three sectors of society are low but the plurality (39.0%) of respondents said they trusted nonprofits completely or very much, the highest response for any of the institutions in the survey. Religious charitable organizations are seen as both the most trustworthy (35.6%) and the most transparent (25.1%) types of philanthropic entity, followed closely by community foundations (30.9% and 21.9%, respectively). Corporate giving and impact investing were least trusted, with only about one in 10 respondents indicating that they trusted them completely or very much. The public has a high level of confidence (76.5%) in the ability of the philanthropic sector to solve problems.
One quarter or less of respondents said any philanthropic sector entity asked about in the survey was completely or very transparent. Less than 12% of those surveyed saw private foundations, corporations and high-net-worth individual donors as very or completely transparent in their giving practices.
Many Americans are not familiar with recent debates and public policy shifts that have an effect on charitable giving now and could have significant bearing on the future direction of philanthropy. The majority of respondents frequently indicated a lack of awareness or uncertainty about how key recent public policies such as the Tax Cuts and Jobs Act (TCJA) and the CARES Act are affecting philanthropy and the nonprofit sector. Similarly, few indicated knowledge or opinions about controversial topics such as donor-advised funds, foundation payout rates and “big philanthropy”—defined here primarily as giving by foundations and wealthy donors.
Fifty percent of those surveyed expressed no opinion about whether a universal charitable deduction (such as the one Americans were able to take on their taxes in 2020 and 2021 as a result of the CARES Act) should be made permanent. Among those who expressed an opinion, nearly half (48.7%) reported that their giving would stay the same if a universal charitable deduction became permanent, while a third (33.2%) said they did not know whether or how their household giving would be impacted and 14.7% said it would increase somewhat.
More than half (54.2%) said they had no opinion on how foundations distribute their funds. Among those who held views about foundation payouts, nearly 80% preferred that foundations operate in perpetuity rather than grant out their assets quickly.
About one in 10 Americans said they were familiar with donor-advised funds (11.4%), with an additional one-third indicating that they had heard of them (37.8%).
Survey respondents found value in both large and small financial contributions. They preferred the idea of smaller donations from many donors when directly contrasted with larger donations from the wealthiest Americans. But when asked about both types of giving separately, they seemed to feel that big gifts can have a bigger impact and thus may perceive them as being more important to American society broadly.
“Philanthropy is often referred to as the voluntary sector because its ability to meet needs and address societal challenges depends upon people’s awareness of those issues and their willingness to respond generously with their resources,” said Amir Pasic, the Eugene R. Tempel Dean of the Lilly Family School of Philanthropy. “Gauging the extent to which Americans are informed and engaged by the sector and the organizations and people comprising it is vital to its ability to thrive and to improve our world. We look forward to sharing and discussing the insights gained through this research with colleagues in philanthropy and with the public.”
All results presented in the report rely on data obtained from an original survey developed by the Indiana University Lilly Family School of Philanthropy and fielded by Ipsos Public Affairs on behalf of the school. The survey was conducted on KnowledgePanel®, the largest online panel in the United States that relies on probability-based sampling methods for recruitment to provide a representative sampling frame for adults in the U.S. All data was collected between July 19 and August 5, 2022. The target population comprised adults aged 18 and older residing in the United States. The final sample size for the study was 1,334 qualified interviews.
About the Lilly Family School of Philanthropy
The Indiana University Lilly Family School of Philanthropy at IUPUI is dedicated to improving philanthropy to improve the world by training and empowering students and professionals to be innovators and leaders who create positive and lasting change. The school offers a comprehensive approach to philanthropy through its undergraduate, graduate, certificate and professional development programs, its research and international programs and through The Fund Raising School, Lake Institute on Faith & Giving, the Mays Family Institute on Diverse Philanthropy and the Women’s Philanthropy Institute. Follow us on Twitter, LinkedIn, or Instagram and “Like” us on Facebook.