A Paradox in Giving: Why 1 in 4 Americans Plan to Cut Donations Despite Economic Growth

MERRILL, Wis. – January 20, 2026 – As the American economy shows encouraging signs of recovery, a surprising undercurrent of financial anxiety is poised to impact the nation's charitable sector. A new national survey reveals that one in four U.S. adults (25%) plans to reduce their charitable giving in 2026, citing persistent concerns over household finances and the broader economic outlook.

The findings, part of the 2026 Charitable Giving in America report from Church Mutual Insurance Company, S.I., highlight a significant disconnect between improving macroeconomic indicators and the financial sentiment of many American families. This cautious approach from donors presents a looming challenge for nonprofit organizations already grappling with increased demand for their services.

While recent data from sources like the Giving USA 2025 report showed a robust 6.3% rebound in total charitable donations in 2024, the new survey suggests this top-line growth may mask a more fragile reality. The planned cutbacks could signal a difficult fundraising environment ahead, forcing charities to navigate a complex landscape of donor apprehension and escalating operational pressures.

The Paradox of Recovery

At the heart of the issue is a lingering sense of financial insecurity that has outlasted the worst of recent economic turbulence. Despite easing inflation and a strong stock market performance that historically fuels philanthropy, many households have not yet felt the full effects of the recovery. The Church Mutual survey, which polled over 1,000 adults, paints a clear picture of these anxieties:

• 61% of respondents remain concerned about the rising cost of everyday goods and services.
• 46% still worry about the possibility of a future recession or worsening economic conditions.
• 33% are focused on managing routine debt payments.
• 22% express concern over job stability for themselves or their partners.

This data suggests that for a significant portion of the population, discretionary spending—including donations to charity—remains on the chopping block as they prioritize building financial buffers. The sentiment stands in stark contrast to the broader philanthropic landscape, where individual giving grew by 8.2% in 2024, largely driven by gains in disposable income and net worth among wealthier households. The planned cutbacks appear concentrated among those who continue to feel the squeeze, creating a bifurcated recovery that benefits some more than others.

This paradox—a growing economy alongside growing donor caution—underscores a shift in public sentiment. The memory of recent inflation and economic uncertainty appears to be casting a long shadow, prompting a more conservative approach to personal finances that could reverberate throughout the nonprofit world.

A Gathering Storm for Nonprofits

The prospect of reduced individual giving comes at a particularly challenging time for the nonprofit sector. More than half of Americans (54%) already report being concerned about the financial health of the charitable organizations they support, a fear that is not unfounded. According to a recent nonprofit leadership report, eight in ten organizations have seen their operating costs rise by 13-15%, far outpacing the general rate of inflation.

“Over the past year, many nonprofits have navigated funding uncertainty, which has increased the need for private philanthropy through individual donations,” said Elisabeth Aleman, assistant vice president of Nonprofit and Human Services at Church Mutual, in the report's press release. “However, what we’re starting to see is that although economic indicators are gradually improving, donors are still cautious and protective of their finances. At the same time, nonprofits continue to see elevated demand without much change in resources, which means they’re doing more with less.”

This pressure is compounded by funding volatility from both government and private sources. Delays in federal appropriations and potential legislative changes create an unpredictable environment. Many organizations are operating on thin margins, with over half holding less than three months of operating reserves. The combination of rising demand, soaring costs, and shaky funding streams is creating a perfect storm that threatens the ability of many charities to deliver essential services.

Navigating the New Normal

In response to these headwinds, nonprofit leaders are not standing still. The sector is actively adapting with a combination of financial discipline and strategic innovation. A primary focus is diversifying revenue streams to reduce reliance on any single source of funding. This includes expanding corporate partnerships, developing fee-for-service programs, and investing heavily in digital-first fundraising initiatives to reach a broader, more technologically savvy audience.

Technology, particularly artificial intelligence, is playing a growing role. Nearly two-thirds of nonprofits now report using AI for communications and internal productivity, while 61% are leveraging it for development and fundraising to better identify and engage potential donors. At the same time, organizations are implementing rigorous cost management, conducting rolling forecasts, and scenario planning to prepare for further economic uncertainty.

Leaders are also closely watching the legislative landscape. A new charitable giving tax incentive for non-itemizers, set to begin in 2026 with a cap of $1,000, could encourage smaller-dollar donations and partially offset the loss from larger, more cautious givers. Educating donors about this new provision will be a key task for development teams in the coming year.

Resilience in Giving: Faith, Community, and Generational Shifts

Even amid widespread caution, American generosity remains deeply ingrained, particularly at the local level. The Church Mutual survey found that houses of worship continue to be the primary recipients of charitable dollars, with 74% of donors giving to them. Significant giving also continues to flow to other community-based organizations, including schools (33%) and local nonprofits (34%). This suggests that organizations with deep community ties and a perceived direct impact may prove more resilient to the shifting financial climate.

Meanwhile, a generational transition is reshaping the future of philanthropy. While Baby Boomers remain the most generous cohort, accounting for 43% of all giving, their influence is beginning to wane as they enter retirement. In their place, Millennials and Gen Z are becoming increasingly influential. These younger, digitally native donors are values-driven, prioritizing transparency, social justice, and measurable impact.

Gen Z, in particular, is motivated by causes like environmental action, animal welfare, and social equity, often giving spontaneously through social media campaigns and crowdfunding platforms. To capture their support, nonprofits are learning to communicate through digital, visual, and interactive channels, treating these younger donors not just as sources of funds but as partners in their mission. This evolution in donor engagement will be critical for long-term sustainability as the philanthropic landscape continues to change.