Philanthropy and charitable giving is on the decline.

Over the past two decades, fewer and fewer Americans have given to charity.

In 2000, roughly two-thirds of American households gave to a charitable organization. In 2018, just under half of American households did. In other words, about 20 million Americans had stopped giving.

While the amount of money going to charity in the US keeps growing — last year, giving exceeded $480 billion — the number of Americans giving to charity has shrunk. And there hasn’t been an easy explanation for why so many had stopped.

Unless, of course, they actually hadn’t stopped.

In recent years, researchers have begun questioning how the philanthropy sector tracks charitable giving. Often, this data captures only a small glimpse of total giving, and it typically spotlights big donors, like billionaires, while overlooking the ways that many Americans give.

Studies of philanthropy, for the most part, only track monetary donations to registered charities. These are easiest to track because these gifts have to be reported to the IRS. Informal donations, like person-to-person giving or giving to unregistered organizations, more often involve non-monetary gifts — and these often go untracked. Increasingly, that’s seen as a problem by researchers and by nonprofits scratching their heads at why they’re seeing fewer people donating.

The disturbing implication of these two trends — bigger gifts and fewer donors — is that charitable giving had become the noblesse oblige of wealthy people, giving these elites an even greater influence on our society today. But could it be that a significant number of Americans are less generous and are contributing less than they were a few decades ago? That’s the assumption that the nonprofit sector is now reexamining.

What the data does show is that millions of Americans are no longer engaging in giving the way they used to. It’s driving conversations about what kind of data philanthropy should try to collect — and what it counts as “giving.”

What the data does and doesn’t show

Some of the observed decline in Americans’ charitable giving is because the US is less religious than it was decades ago. About 29 percent of Americans now report having no religious affiliation, compared to 16 percent in 2007. That has had an impact on overall giving participation because religion has historically received the largest share of charitable donations. Donations to religious congregations still make up the biggest share of charitable donations in the US, but in 2016, 32 percent of all US donations went to a religious cause, which is about half of the amount that went to religion in 1990. Since 2000, giving participation for religious causes has declined more steeply than the participation rate for secular causes.

The other big factor is the economy. The biggest drop in participation in giving happened after the Great Recession, in 2010: The amount of donations and the number of donors fell. Despite the economic recovery we’ve seen since then, the decline in donors has persisted. According to Indiana University’s Lilly Family School of Philanthropy, one of the foremost academic institutions studying philanthropy, only a little over a third of the dropoff can be explained by changes in the income and wealth of donors.

But the rest of it? That has puzzled researchers and nonprofits.

This mystery has underscored the limitations in how charitable giving is measured and analyzed. The Lilly School’s Philanthropy Panel Study (PPS) is the source of the data showing that only about half of households are giving to charity now. It’s a longitudinal study of philanthropic trends that has been running since 2001, and the school’s data is often the gold standard used by the philanthropy sector to examine what’s going on in philanthropy. But it only counts donations to religious and nonprofit organizations. It doesn’t include political contributions, even though research suggests that people think of political giving and charitable giving interchangeably: If they make a political donation, they’re less likely to make a charitable donation. The PPS data also doesn’t include donations under $25.

These limitations, some of which are acknowledged in the PPS, reveal a broader problem: For too long, the spotlight has been fixed on wealthy donors while the contributions of smaller donors are diminished, if not outright invisible.

And the presence of the ultrarich is only getting larger. Philanthropy is increasingly leaning on huge donations from just a handful of wealthy donors who are making 10-figure gifts: MacKenzie Scott has given away over $12 billion in just the past few years. Bill Gates and Melinda French Gates gifted $15 billion to their own foundation in 2021. Elon Musk appeared to have given away over $5 billion late last year, but it’s possible that money was in fact funneled into a donor-advised fund (DAF), an increasingly popular (and controversial) mode of giving among the rich. DAFs aren’t required to distribute a certain amount of their fund every year, the way that private foundations have to disburse at least 5 percent of their endowment. The money could, in theory, sit there forever while the donor’s tax liability shrinks. The National Philanthropic Trust reports that DAFs received about $25 billion in contributions in 2016. In 2021, they got almost $48 billion.

In 2020, Mark Zuckerberg and his wife Priscilla Chan gave away about $1.2 billion, half to a donor-advised fund and half to the Zuckerberg Chan Initiative. This organization, set up under philanthropic aims, has come under some criticism because it’s set up as a limited liability company (LLC) rather than as a charitable foundation. There’s no way to check that the money being moved into LLCs is actually being donated for the public good.

Experts in the nonprofit sector caution against making hasty assumptions about what the rise in dollars and decline in donors means, but one thing this trend makes clear is that the philanthropy world needs to adapt the way it collects data. Big, flashy donations get a lot of attention, but that doesn’t mean other kinds of giving aren’t happening. Giving looks different when you’re not a billionaire — instead of cutting a check to a charity or a foundation, you might send cash directly to someone in need. But these are the informal kinds of giving that have historically been ignored.

“Technology has changed dramatically; the ways people can give have changed dramatically,” said Ann Mei Chang, CEO of Candid, a nonprofit that provides data and other insights on nonprofit organizations.

“I think that our systems just haven’t kept up,” she told Recode.

Eroding trust in the crowdfunding age

Giving has always been an important part of American civic life, and for a long time, a majority of Americans have trusted charitable organizations to shepherd their generosity. In 2005, Edelman’s annual Trust Barometer found that 55 percent of the US public trusted nongovernmental organizations (NGOs) — higher than its level of trust in government, media, and businesses. This year, only 45 percent of Americans surveyed said they trusted NGOs.

That only half of American households are donating to nonprofits now may be a symptom of eroding trust in all institutions, which has been declining since 1979, when it was at 48 percent, to just 27 percent in 2022. People are more skeptical of whether traditional institutions, including nonprofit charities, are equipped to handle the problems we’re facing today.

“There have been a number of crises around institutions being unable to deliver, and sometimes a lack of transparency and accountability,” said Una Osili, the associate dean for research and international programs at the Lilly Family School of Philanthropy.

Osili says that younger Americans are less likely to give through formal charitable organizations, but they are much more willing to give directly, whether it’s by donating to an individual’s GoFundMe request to help pay medical bills or rent, or even seeing a neighbor’s post on NextDoor and buying groceries for them.