We’re highlighting two reports, Impact in Place: Emerging Sources of Community Investment Capital and Strategies to Direct it at Scale and Giving USA 2021. 

Giving USA 2021

The Giving USA 2021 report offers a comprehensive look at American philanthropy. The report was researched and written by Indiana University’s Lilly Family School of Philanthropy. 

The findings for the report come from an analysis of IRS tax data for 128 million U.S. households, as well as other surveys.

According to the Associated Press, the report, which is available for purchase, highlights that charitable giving in the United States reached a record $471 billion in 2020.

“In some ways, 2020 is a story of uneven impact and uneven recovery,” Amir Pasic, the dean of Indiana University’s Lilly Family School of Philanthropy, said in a statement.

“Many wealthier households were more insulated from the effects of COVID-19 and the ensuing economic shock, and they may have had greater capacity to give charitably than households and communities that were disproportionately affected and struggled financially.”

Foundations also increased their giving. According to the AP coverage, report findings show foundations increased their total giving by 15.6% to a record $88.55 billion in 2020, after adjusting for the effects of inflation.

According to the Washington Post’s coverage of the report, those donations made up about 19% of the total share of contributions which is the largest that has ever come from foundations. 

Most nonprofit categories saw an increase in contributions, particularly to civil rights organizations and other charities. 

However, arts and culture nonprofit organizations and general nonprofit hospitals and disease-specific health organizations saw a decline in giving. According to the report, this is common during economic recessions as donors focus on “immediate basic needs.”

Impact in Place

The U.S. Impact Investing Alliance report, Impact in Place, commissioned by the Federal Reserve Bank of New York, explores the community investment landscape within the past year amid the COVID-19 pandemic and “how emerging capital sources and strategies could help shape the future of the field.”  

The report reflects on the existing community investment landscape to understand and preserve the “relative importance of various capital sources.”

The report also offers several recommendations to investors and advisors to increase the efficiency of investment capital to underserved communities. 

According to the report, community investing is broadly defined as investment capital that flows to underserved communities for economic development, affordable housing and growing small business ecosystems. 

The report includes foreword from Darren Walker, president of the Ford Foundation, and chair, U.S. Impact Investing Alliance. 

In his foreword, Walker recognizes the economic fallout as a result of the COVID-19 pandemic and addresses the disproportionate affects the pandemic has had on historically disadvantaged and underserved communities. 

“As we transition to a new year and the next phase of the pandemic, leaders at all levels, and from every sector, must act swiftly to deliver investment capital to these overlooked populations in financial distress and build a more inclusive capitalism. We can no longer afford to bifurcate how we invest capital and how we deploy it for good. We must, instead, integrate our approach to ensure real, equitable impact,” Walker shared in the report. 

The report highlights several case studies that detail community investment efforts and their approaches. 

Jennifer Oertel, CMF’s Impact Investing Expert in Residence says it gives her “great hope” that the Federal Reserve Bank of New York brought light to impact investing through funding this study. 

“When CMF began its journey with this work nearly a decade ago, it was mainly philanthropy (especially environmental organizations) and groups supporting main street entrepreneurs that were focusing upon using investment assets to intentionally create social impact,” Oertel said. “I think this increased acceptance and promotion of impact investing by traditional institutions will help to convince those that were hesitant to take the plunge and explore the possibilities with us.”

Want more?

Access the full Giving USA 2021 report. 

Read the full Impact in Place: Emerging Sources of Community Investment Capital and Strategies to Direct it at Scale report. 

Connect with CMF’s Impact Investing Expert-in-Residence, Jennifer Oertel, to learn more.