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What Americans Think About Philanthropy and Nonprofits

• Viken Mikaelian
• December 15, 2024

Below is a summary of the paper [Download Full Version]

The nonprofit sector plays a vital role in American society, providing services and opportunities that the government and private sectors often overlook. But how do everyday Americans feel about philanthropy and nonprofits? A new report from the Lilly Family School of Philanthropy sheds light on this question, offering insights into public perceptions, challenges, and opportunities for the future of the sector.

Key Insights

• Telling Stories: Share real, relatable examples of how nonprofits make a difference in everyday lives.
• Building Connections: Encourage people to see themselves as philanthropists, whether they give $5 or volunteer an afternoon.
• Focusing on Inclusion: Celebrate and amplify diverse voices in giving and leadership.
• Prioritizing Trust: Be clear and transparent about how donations are used, and show the real impact of every dollar.

Why It Matters

Philanthropy isn’t just about wealth or prestige—it’s about people coming together to make the world better. Whether it’s a billionaire funding a hospital or a neighbor helping a family in need, every act of giving strengthens our communities. By addressing concerns around trust, engagement, and diversity, the sector can grow into a more inclusive and impactful force for good.

This report reminds us that the future of philanthropy depends not just on resources, but on how we inspire and involve people in shaping a better society—together.

1. Rebuilding Trust
   Americans trust nonprofits more than other sectors, but that trust isn’t deep. Increasing transparency about how donations are used and ensuring accountability, especially for large philanthropic entities, will be critical.
2. Declining Donor Engagement
   Fewer Americans are giving to charity, and the drop has been steady over the past 20 years. Many people don’t realize how much this affects the sector, especially smaller nonprofits that rely on community support.
3. Connecting with Everyday Lives
   While nonprofits impact nearly everyone—through schools, places of worship, healthcare, and community programs—many people don’t recognize these as services tied to philanthropy. This disconnect limits public appreciation and engagement.
4. Diversity and Representation
   As America becomes more diverse, the philanthropic sector must reflect and respond to these changes. Inclusive leadership and a broader understanding of giving traditions across cultures will help build stronger connections.

Moving Forward

To ensure a vibrant future for philanthropy, nonprofits need to bridge the gap between their work and the public’s understanding. This starts with:

• Telling Stories: Share real, relatable examples of how nonprofits make a difference in everyday lives.
• Building Connections: Encourage people to see themselves as philanthropists, whether they give $5 or volunteer an afternoon.
• Focusing on Inclusion: Celebrate and amplify diverse voices in giving and leadership.
• Prioritizing Trust: Be clear and transparent about how donations are used, and show the real impact of every dollar.

Why It Matters

Philanthropy isn’t just about wealth or prestige—it’s about people coming together to make the world better. Whether it’s a billionaire funding a hospital or a neighbor helping a family in need, every act of giving strengthens our communities. By addressing concerns around trust, engagement, and diversity, the sector can grow into a more inclusive and impactful force for good.

This report reminds us that the future of philanthropy depends not just on resources, but on how we inspire and involve people in shaping a better society—together.

1. Philanthropy Means More Than Money
   Most Americans view philanthropy as giving time or money to nonprofit organizations. Younger people, women, and those with higher education see it more broadly, including acts like volunteering skills, advocating for causes, and connecting people through personal networks. Yet, for many, philanthropy still feels like something reserved for the wealthy.
2. Trust is Fragile
   While nonprofits are trusted more than government or businesses, overall trust in institutions is low. People feel most confident in religious charities and community foundations but are skeptical of larger entities like private foundations and donor-advised funds (DAFs). Transparency and accountability remain key concerns.
3. We Don’t Know What We Don’t Know
   Many Americans lack a clear understanding of how the philanthropic sector works. For example:
   • Few people are aware of the declining number of donors over the last two decades.
   • Most don’t know the rules about how foundations distribute their funds or what DAFs are.
   • The majority have little familiarity with recent tax and policy changes that affect charitable giving, like the CARES Act or the Tax Cuts and Jobs Act.
4. Small Donors Matter, but Big Gifts Have Impact
   Americans say they value smaller contributions from everyday people over large donations from wealthy individuals. At the same time, they recognize that major gifts often drive the biggest changes. This creates a tension in how we think about philanthropy’s role in solving problems.

The Challenges Ahead

1. Rebuilding Trust
   Americans trust nonprofits more than other sectors, but that trust isn’t deep. Increasing transparency about how donations are used and ensuring accountability, especially for large philanthropic entities, will be critical.
2. Declining Donor Engagement
   Fewer Americans are giving to charity, and the drop has been steady over the past 20 years. Many people don’t realize how much this affects the sector, especially smaller nonprofits that rely on community support.
3. Connecting with Everyday Lives
   While nonprofits impact nearly everyone—through schools, places of worship, healthcare, and community programs—many people don’t recognize these as services tied to philanthropy. This disconnect limits public appreciation and engagement.
4. Diversity and Representation
   As America becomes more diverse, the philanthropic sector must reflect and respond to these changes. Inclusive leadership and a broader understanding of giving traditions across cultures will help build stronger connections.

Moving Forward

To ensure a vibrant future for philanthropy, nonprofits need to bridge the gap between their work and the public’s understanding. This starts with:

• Telling Stories: Share real, relatable examples of how nonprofits make a difference in everyday lives.
• Building Connections: Encourage people to see themselves as philanthropists, whether they give $5 or volunteer an afternoon.
• Focusing on Inclusion: Celebrate and amplify diverse voices in giving and leadership.
• Prioritizing Trust: Be clear and transparent about how donations are used, and show the real impact of every dollar.

Why It Matters

Philanthropy isn’t just about wealth or prestige—it’s about people coming together to make the world better. Whether it’s a billionaire funding a hospital or a neighbor helping a family in need, every act of giving strengthens our communities. By addressing concerns around trust, engagement, and diversity, the sector can grow into a more inclusive and impactful force for good.

This report reminds us that the future of philanthropy depends not just on resources, but on how we inspire and involve people in shaping a better society—together.