(Updated to fix a typo)
The holidays are a time for giving, but financial experts want you to know it’s OK to get a little, too.
The past two years have been hard for charitable giving because inflation and high interest rates have strained people’s budgets, experts say. In 2022, when inflation climbed to a 40-year high, total annual giving slumped 10.5% to $499.3 billion after adjusting for inflation, according to the nonprofit Giving USA, which focuses on philanthropy research.
In 2023, inflation-adjusted giving fell a narrower 2.1% to $557.16 billion. With inflation now easing and interest rates dropping, experts hope Americans will continue chipping away at the decline or reverse it this year.
But acknowledging some budgets may still be tight, financial experts have tips for Americans to maximize their dollars for charities and their pocketbooks.
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“Many people donate cash,” said Dr. Una Osili, associate dean for Research and International Programs at Indiana University Lilly Family School of Philanthropy. But over the years, there has been “more sophistication around how to give.”
Cash may not be king
It’s easy to throw a few bucks into red kettles around town during the holidays, but that may not be the best way to donate, experts said.
“If you throw money into a Salvation Army bucket, there’s not much to do there,” said Mark Steber, chief tax officer at tax preparer Jackson Hewitt.
Making a donation…
