Charitable Choices: Philanthropy and Financial Planning

In an era marked by economic uncertainty and shifting donor behaviors, understanding the interplay between charity and financial planning has never been more vital. Philanthropy serves as a bridge between personal values and societal impact. By examining recent data, financial planners and donors alike can craft strategies that maximize both giving outcomes and tax efficiency.

This article explores the latest trends in charitable giving, uncovers the driving economic forces, and offers practical guidance on integrating philanthropy into long-term financial plans.

Understanding the Giving Landscape

Americans stepped up in 2024, with Americans donated an estimated $592.50 billion to U.S. charities. This amount represents a 6.3% rise in current dollars and a 3.3% gain when adjusted for inflation, marking the first time in three years that giving outpaced cost increases.

That growth aligns closely with the 40-year average of 5% current-dollar increases, signaling a return to a steady philanthropic trend after the economic turbulence of recent years.

Sources of Giving: Where the Funds Come From

The composition of charitable dollars reveals important implications for both donors and advisors. Individual donors continue to dominate the landscape, while corporations set new generosity records.

Individual giving—powered by rising stock markets and personal income—accounts for two-thirds of all contributions. Foundations, now representing nearly a fifth of total gifts, have surpassed $100 billion in grants for the third consecutive year. Corporations, buoyed by strong GDP growth, set new records. Meanwhile, bequests declined slightly, reminding advisors to nurture legacy planning.

Where Funds Are Directed

Donors have diverse priorities, from religion to international affairs. In 2024, education and public-society benefit organizations saw particularly robust growth.

• Education: $88.32 billion (13.2% growth, 9.9% inflation-adjusted)
• Public-Society Benefit: $66.84 billion (19.5% growth, 16.1% adjusted)
• International Affairs: $35.54 billion (17.7% growth, 14.3% adjusted)
• Arts, Culture, Humanities: $25.13 billion (9.5% growth)

Religious organizations, while still receiving the largest single share at $146.54 billion, grew only 1.9% and saw a 1.0% decline after inflation. Health, human services, environment, and animal welfare also posted gains, underscoring broad-based generosity.

Economic Forces Behind Generosity

Charitable giving remains closely tied to economic conditions. A resilient stock market and solid GDP gains fueled donor confidence in 2024, driving higher contributions.

However, inflation’s lingering impact on household budgets tempered some giving potential, reminding planners to balance generosity with financial security. As everyday expenses rise, donors may shift between unrestricted gifts, donor-advised funds, and planned giving vehicles.

Shifting Donor Profiles and Participation

Despite record total donations, the number of donors fell 4.5% from 2023 to 2024, with the trend persisting into early 2025. This highlights a shift where fewer individuals give larger sums.

The typical donor is now 64 years old, making two gifts annually, with an average one-time gift of $121 and an average monthly donation of $25. Recurring giving programs have gained traction, enrolling 57% of donors versus 46% the prior year.

The Rise of Donor-Advised Funds

Donor-advised funds (DAFs) have become a powerful tool for strategic philanthropy. In 2025, Fidelity Charitable donors granted $14.9 billion through DAFs, a $3 billion increase. Meanwhile, DAFgiving360 donors supported 155,000 charities with 1.4 million grants, including $148 million for disaster relief.

Advisors should consider integrating DAFs to optimize tax benefits and giving flexibility, ensuring both immediate impact and long-term legacy goals.

Strategies for Integrating Philanthropy and Financial Planning

To harness the full potential of charitable giving, advisors and donors can adopt the following approaches:

• Match giving to economic cycles by tying gifts to market performance.
• Leverage DAFs for flexible, tax-efficient contributions.
• Encourage recurring gifts to stabilize nonprofit revenues.
• Plan bequests and legacy gifts to support intergenerational wealth transfer.

Additionally, nurturing relationships with younger donors and developing digital engagement strategies can reverse donor attrition and build a sustainable philanthropic pipeline.

Conclusion: Aligning Values with Financial Goals

Charitable giving in 2024 demonstrates both resilience and transformation. While total donations reached unprecedented levels, donor participation dipped, signaling structural change. For donors and advisors, the challenge lies in crafting plans that honor personal passions while maximizing financial efficiency.

By staying informed on sector growth, economic drivers, and emerging tools like donor-advised funds, philanthropists can make purpose-driven decisions that endure across generations. In doing so, they not only uplift communities today but also sow the seeds for a more generous tomorrow.