The Sisyphean Task of Giving Tuesday

The results are in: Giving Tuesday 2024 raised $3.6 billion dollars this year, a record-breaking total and a 16 percent increase over last year. 

More than 36 million people participated in America’s designated day for charity in some way, whether by giving money, food, or other goods, or volunteering, or speaking out about causes important to them. 18.5 million of those people gave money, for an average of $195 per person. That’s a pretty sizable sum for most people, but somewhat of a triumph for smaller-dollar giving in our era of top-heavy philanthropy.

While we celebrate the incredible generosity and activism of millions of Americans this past December 3, the numbers also drive home just how unequal philanthropy has become — and how urgently we need to fix it.

A recent report we co-authored, Gilded Giving 2024: Saving Philanthropy from Wall Street, covers how, for more than a decade, charities have been receiving shrinking amounts of revenue from donors at lower- and middle-income levels, and are becoming more reliant on donations from smaller numbers of wealthy donors. 

This makes it easy for the ultra-rich to turn our public charities into a platform for private power and even wealth creation for themselves. And, to make matters worse, those wealthy donors tend to pour their dollars into foundations and donor-advised funds — charitable intermediary vehicles they control — rather than into charities working directly for the public benefit.

As all of this happens, the wealth defense industry — the investment companies, family offices, and asset managers who surround wealthy people — are steadily co-opting philanthropy in their own way, using it not only to reduce taxes for their clients but also to divert charitable revenue and skim off fees from the assets held in intermediaries. 

This hijacking of the charitable sector by financial interests poses big risks: Less money flows to working charities, major donors have more control over charitable missions and operations, and we the people get less back in return for the charitable deductions our tax dollars subsidize. 

The sums raised on Giving Tuesday are incredibly large. But we must not lose sight of the fact that the dollars with which wealthy donors dominate our charitable sector are many times more incredible — and, more often than not, those dollars go to intermediaries, not charities on the ground. For a little perspective:

• According to the gold-standard annual report on American giving, Giving USA, total U.S. giving amounted to $557 billion in 2023. Giving from individuals accounted for $374 billion of that total. This means that the $3.6 billion raised on Giving Tuesday this year was just 0.64 percent of total U.S. giving and 0.96 percent of individual U.S. giving in 2023.

• The vast majority of individual giving comes from people at upper income levels, and it only gets more extreme the farther up the income ladder you go. In fact, according to Giving USA, donations from just seven mega-donors amounted to $8.07 billion in 2023 — more than twice the amount raised on Giving Tuesday this year.

• An estimated $59.43B was given to donor-advised funds in 2023 — more than 16 times the amount raised on Giving Tuesday. 

• Fidelity Charitable, the largest donor-advised fund sponsor in the country and also the country’s largest charity, took in $12.6 billion — more than three times the amount raised on Giving Tuesday this year — all by itself.

To its credit, Giving Tuesday is trying to boost small-dollar donor giving in ways that our elected representatives are not. As we explain in Gilded Giving 2024, there is far more our legislators could do to protect our charities from a Wall Street takeover. They could require foundations to pay out more, for example, and donor-advised funds to pay out something. They could boost giving by everyday Americans with a universal charitable tax credit. And they must take measures to reduce inequality more broadly, so that everyone has more money to spare. 

An estimated $11 billion was spent on the presidential election this year — more than 3 times the amount raised on Giving Tuesday. And there is widespread bipartisan support for proposals like the ones we list above. Is it too much to hope that a fraction of the support we gave our politicians could push them to realign our charitable system with the public interest?