Record holiday spending is setting the stage for a possibly impactful Giving Tuesday this week.
Giving Tuesday is an opportunity for nonprofit corporations to raise funding on the heels of the holiday spirit and is usually witness to an increased amount of donations compared to the rest of the year. Many businesses rely on the money raised during holiday drives to continue operation, but less than half of Americans donated to charity at all last year.
This year’s Black Friday and Cyber Monday sales provided an important glimpse at the current state of the economy, as Adobe Analytics reported $22 billion dollars being spent over the course of the shopping season. These numbers represent a large increase across the board from last year’s sales numbers, but heightened consumerism may not equate to a similar increase in charity for Giving Tuesday.
The National Council of Nonprofits released a report earlier this year that indicates diminished donations for multiple organizations, as 2022 saw a decreased rate of giving for only the fourth time in four decades.
Danny Feingold, the founder and publisher of a nonprofit journalism publication Capital and Main, elaborates on the importance of donations for nonprofit organizations.
“All nonprofit organizations rely, to a greater or lesser extent, on support from the communities that they serve,” Feingold said. “Without that support, it’s difficult, sometimes impossible for us to serve the communities and to succeed at our mission.”
Giving Tuesday provides companies and communities the opportunity to invest in a cause they deem important.
“At this moment when there’s so much at stake for the country, this is a particularly critical time,” Feingold said. “People give to those organizations that are consistent with their own values and what they want to see in American society.”
Wealthy donors represent the largest opportunity for hopeful nonprofits, as a study conducted by the Bank of America demonstrates a disproportionate amount of capital coming from this sector. Households with an annual income of $200,000 are actually donating more money than before the Pandemic.
Nonprofit organizations often court these super donors as a large percentage of their economic planning, and seek outside sponsors to supplement other revenue streams.
Multiple economic factors are to blame for the lack of charity by traditional consumers, but heightened rates of inflation are one of the main culprits. Supply chain issues during the pandemic were compounded by a shift to work-from-home efforts, and information from the National Bureau of Economic Research indicates that the resultant prices are here to stay.
Not every organization holds a pessimistic view of the current situation as many anticipate a much needed infusion of funding as part of the holiday. Giving Tuesday saw a large amount of capital invested prior to COVID, but 2022 set a new record with $3.1 billion in donations.
“I think that to help one another is one way that we can move forward in society, and create unity and companionship,” said Asa Simmons, a team leader for Little Saint Nick Foundation. “I feel like that’s something that we’ve kind of strayed away from and we only help those people who we personally care about.”