A report from the Urban Institute finds that while most charities saw increases in contributions between 2015 and 2019, that trend was reversed in 2020 for many, and small organizations were particularly hard hit.
Based on a survey of nonprofits working in areas ranging from direct service provision to community building and advocacy, the report, Nonprofit Trends and Impacts 2021: National Findings on Donation Trends from 2015 through 2020, Diversity and Representation, and First-Year Impacts of the COVID-19 Pandemic (93 pages, PDF), found that from 2015 to 2019, 58 percent of organizations reported growth in donations, while 32 percent saw stable donations and 10 percent saw declines.
In 2020, however, 37 percent of surveyed nonprofits reported a drop in donations — including 24 percent reporting significant declines.
The report also found that 42 percent of small organizations with budgets under $500,000 — which make up the majority of the sector and depend most heavily on individual donations — experienced a decrease in donations in 2020, compared with 29 percent of those with budgets of at least $500,000 (defined as large organizations in this study).
According to the study, 40 percent of organizations reported losses in total revenue for 2020, including 54 percent of arts organizations and 36 percent of all other nonprofits.
Organizations that reported losses had lost an average of 31 percent of total revenue and 7 percent of their paid staff by the end of 2020. And among organizations that reported receiving fees for service in 2019, revenue from service fees fell by 30 percent at the median.
In terms of issue areas, arts organizations were most likely to report declines in contributions in 2020, at 43 percent.
Among arts, education, and health nonprofits, the smallest organizations with budgets of under $100,000 were most likely to report declines in donations, while in human services, those with budgets of between $500,000 and $999,999 were hardest hit.
In all issue areas except education, organizations with budgets of at least $500,000 were more likely than smaller organizations to report increases in contributions last year.
The report also found that from 2015 to 2019, a greater share of organizations led by people of color saw declines in donations compared with non-Hispanic-white-led organizations (14 percent vs. 9 percent) and a smaller share saw increases (46 percent vs. 60 percent).
In 2020, however, somewhat similar shares of POC- and white-led organizations saw declines (38 percent vs. 37 percent) and increases (47 percent vs. 52 percent) in contributions.