Charitable giving will remain resilient despite economic headwinds

Among the many stressors mounting for nonprofit leaders in 2025, one rises to the top: a potential economic downturn roiling their donor base. Many economists now project an economic downturn—if not a full recession—later this year. So what will be the likely impact on nonprofits?

Historical data and key positive trends in philanthropy show that nonprofits can offset risks related to an economic downturn. Understanding this data and trends is vital for nonprofit leaders in planning and executing their organizational budgets and fundraising strategies.

Learning from past downturns

The chart below shows total giving since 1983 and how donor contributions change during times of uncertainty. Each recession shown is unique in how it affected total giving.

The data shows a mostly flat trend in total giving during the early 1990s and 2001 recessions and a drop in total giving during the Great Recession of 2007−09. Compared to other forms of giving, donations from individuals primarily drove this trajectory.

Uniquely, during the COVID-19 recession total giving actually increased, defying the typical flat or downward trend of other recessions. The COVID-19 recession was short-lived, and by the end of 2020, the economy had recovered enough to motivate donors to give. The unprecedented global health crisis led to heightened awareness and urgency around supporting health care, social services and economic relief efforts, which likely fueled donations. Additionally, the pandemic accelerated nonprofits’ adoption of digital fundraising and crowdsourcing platforms, making it easier for their donors to make contributions.

Unlike giving from individuals, foundation giving has historically increased during recessions compared to other forms of giving, with the only notable decrease during the Great Recession. Overall, the data indicates that charitable contributions increase significantly during periods of economic growth, while decreasing to a less significant degree during recessions.

When analyzing total giving as a percentage of U.S. gross domestic product, the data demonstrates a consistent pattern of moderate decline during recessions since 1983, with the notable exception of the COVID-19 recession in 2020.

Philanthropic tailwinds

Despite the economic risks in 2025, some important trends in philanthropy should buoy overall giving this year and next, though with a likely shift in sources.

Among these trends is the record-high value of assets held by private foundations, topping US$1.6 trillion at the end of 2024. These foundations have giving requirements based on their asset size, and recently a number of them have exceeded these requirements, which helps them meet the challenging environment they currently face.

Similarly, assets held in donor advised funds (DAFs) have hit record highs, according to the most recent data. This figure topped $250 million in 2023, and we expect the rapid growth of DAFs to continue for the next several years. DAF sponsors have consistently granted over 20% of their held assets each year, indicating a potential increase in grants that aligns with their growth in assets.

Assets held in private foundations and DAFs will continue to make their way into charitable organizations over the coming years, despite macroeconomic concerns. In addition to these types of accounts and organizations, the anticipated generational wealth transfer should bolster opportunities for nonprofit fundraising.

What’s next?

It is uncertain how the tariff shock, rising prices, funding cuts, layoffs and changes in tax policies will affect the economy and donors' ability to donate. Individual and corporate giving may decrease slightly in the near term. However, over a five-year period through 2028, we expect total giving to increase, primarily driven by the projected rise in grants from DAFs and foundations.

The takeaway

Despite current economic uncertainties, history shows that charitable giving remains resilient during downturns and does not always decline. Given positive trends in philanthropy outside of the macroeconomy, we expect a downturn in giving to be small and short-lived, with a solid recovery in 2026 and beyond. Nonprofits should persist in bold fundraising initiatives, sustain relationships with existing donors, and develop new strategies to diversify their revenue streams.