Why Charitable Giving Is Down: The Real Causes

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Table of contents

• How much have donations actually dropped?

• What's actually causing the decline?

• Which sectors are hit hardest?

• How does this compare to past downturns?

• What donors are telling us about their giving decisions

• 7 strategies to protect your fundraising

• When will donations recover?

• Key takeaways for nonprofit leaders

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When tariffs were announced on April 2, 2025, donations on Zeffy dropped 37% almost overnight, measured against more than $100M in monthly giving moving through the platform. A year on, the shock has eased, but giving is still soft, and small nonprofits are still asking the same question: why are donations down, and what do we do about it?

This is the honest version of that answer. We'll show you the platform data, walk through the macro factors with primary sources, compare 2025 to past downturns, and give you seven concrete plays you can run this quarter. The headline thesis up front, because it changes how you read the rest: a downturn is a retention story, not an acquisition story. Your loyal donors haven't left. They've shrunk. The $1,000 supporter is now giving $250 and staying loyal, and the highest-leverage move you can make is to keep that relationship alive at a smaller dollar amount until confidence returns.

The 2025 donation drop at a glance

• 37% drop in donations on Zeffy after the April 2, 2025 tariff announcement (vs. the same period in 2024), based on $100M+ in monthly giving on our platform.

• Gifts over $500 fell 50%; gifts under $500 fell 30%. Major-gift donors paused hardest. Everyday donors held the line.

• $592.50B in total US charitable giving in 2024 (Giving USA 2025).

• Donor retention slipped from 18.3% to 18.1% in Q1 2025 (AFP Fundraising Effectiveness Project).

• For small nonprofits, this is a shrink, not a flight. The play is recurring-giving conversion, smarter segmentation, and cutting every dollar of fundraising overhead you can.

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How much have donations actually dropped?

Start with what we can see clearly. After the April 2, 2025 tariff announcement, donations through Zeffy fell 37% compared with the same period a year earlier. That figure is drawn from our own platform, where more than $100M in giving moves through every month. It is not an industry-wide projection. It is what we observed, in real time, across the small and mid-sized nonprofits we serve.

The drop was not flat across gift sizes. Larger gifts pulled back harder:

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That gap matters. It tells you the major-gift segment is the one pausing, while everyday donors are still showing up, just with less to give. This is the shrink-not-flight pattern in one table.

For broader context, Giving USA's 2025 report puts total US charitable giving at $592.50 billion in 2024, up 6.3% in current dollars and 3.3% adjusted for inflation. That figure is the last full-year picture before the spring 2025 shock. On the retention side, the AFP Fundraising Effectiveness Project Q1 2025 report shows donor retention slipping from 18.3% (2024) to 18.1% (Q1 2025). Small numbers, but the direction is the point: fewer donors are sticking, and the ones who do are giving less.

For a small nonprofit: the headline 37% is real, but the gift-size breakdown is what you should actually plan around. If most of your revenue comes from gifts under $500, you are likely down, but you are not in free fall. If you depend on a handful of major gifts, the pain is sharper, and your plan needs to account for it.

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What's actually causing the decline?

The drop is not one thing. It is several pressures stacking up at the same time. We'll lead with the inflection point, then layer in the rest with primary sources.

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1. The April 2, 2025 tariff announcement (the inflection point)

The clearest signal in our platform data is the date. Giving was tracking normally into early April 2025. Within days of the April 2, 2025 tariff announcement, the 37% drop showed up. Tariff policy itself isn't the only mechanism; the announcement triggered a cascade of market volatility, household-budget worry, and federal spending uncertainty that hit donor confidence all at once.

This is the angle most "why is giving down" coverage missed. Tariff news isn't usually a donation story. In 2025, it was.

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2. Stock market volatility

Major US equity indexes were volatile through spring 2025 as markets repriced trade exposure. Most charitable dollars in the United States come from high-income households, and a large share of that wealth is tied to equities. When portfolios swing, those donors slow down. That is exactly what we saw in the over-$500 segment.

(We're not publishing a specific "since April 2" index figure here because the headline number depends on the date window chosen and we won't approximate it. If you want the current reading, the cleanest primary source is the S&P 500 series on the St. Louis Fed's FRED.)

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3. Inflation and household budgets

The under-$500 segment is a household-budget story. As of May 2026, the Consumer Price Index (BLS) shows a 12-month inflation rate of 4.2%. Groceries, rent, and utilities are still claiming a bigger share of family budgets than they did pre-2022. When a family is choosing between a $50 monthly gift and the grocery bill, the gift is often what gives first.

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4. Consumer confidence

Consumer confidence is the soft variable that connects the hard ones. The Conference Board Consumer Confidence Index tracks how households feel about jobs, income, and the economy six months out. When confidence is shaky, discretionary spending, including giving, gets paused first. Check the most recent Conference Board release for the current reading before you write your next appeal.

For a small nonprofit: you don't need to forecast macro. You need to know that two different donor segments are pulling back for two different reasons (portfolio worry above the line, household-budget worry below it) and that the right appeal looks different for each.

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Which sectors are hit hardest?

2024 was a strong year across the board. Per Giving USA 2025, all nine subsectors rose in current dollars, with four hitting inflation-adjusted all-time highs. Here's the 2024 picture, which is the last clean full-year baseline before the 2025 shock:

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Source: Giving USA 2025.

What does this mean heading into a downturn year? Religion tends to be the steadiest subsector because giving is habitual and faith-anchored. Health and human services keep flowing because the need is visible and urgent. The subsectors that historically wobble first in a downturn are arts and culture (often funded by discretionary household income or major patrons exposed to markets) and international affairs (funded by a smaller, more concentrated donor base and frequently entangled with federal funding shifts).

For a small nonprofit: if you're in arts, culture, or international work, expect your 2025 number to be softer than the 2024 picture suggests, and lean harder on the retention plays below. If you're in religion, health, or direct services, the macro tailwind is more on your side; the work is still about keeping the donors you already have.

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How does this compare to past downturns?

Historical context is the antidote to panic. Two reference points:

2008-2009 financial crisis. Per Giving USA, total giving fell 2% in current dollars in 2008 ($307.65B) and 3.6% in 2009 ($303.75B). Inflation-adjusted, the drops were sharper, roughly -5.7% and -8%. Giving did recover, but slowly: it took several years to return to pre-crisis levels in real terms.

2020 COVID-19 pandemic. Despite a global shock, 2020 giving rose to $471.44B, up 5.1% in current dollars (3.8% inflation-adjusted), per Giving USA 2021. The pandemic surprised the sector by surging, not crashing, driven by emergency giving, federal stimulus that protected household balance sheets, and an unusual stock-market rally.

Two recessions, two completely different giving outcomes. The lesson is that downturns are not all the same and you can't assume 2025 will follow either script exactly. What you can assume: every prior downturn ended, and the nonprofits that came out best were the ones that protected donor relationships during it.

For a small nonprofit: don't model your 2025 plan on 2008 or 2020. Model it on your own donor file. Who gave last year, who has lapsed, who is still active. That's the data that actually predicts what happens next for your org.

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What donors are telling us about their giving decisions

Numbers describe the shape of the drop. Donor conversations explain the why. Across our research into donor behavior trends and the conversations we've had with nonprofits using Zeffy, three patterns keep showing up:

• Loyal donors are shrinking gifts, not leaving. A long-time supporter who used to give $1,000 a year quietly drops to $250 "because of the economy." She still cares. She still opens your email. She just can't write the same check this year. If you write her off as lapsed, you lose a relationship that would have come back.

• Rising costs make asks land differently. Even when supporters love the cause and the communication is great, families say they simply can't give right now. The empathetic appeal lands. The "we need you" appeal lands wrong.

• Segmentation is the #1 communication priority. Nonprofits keep telling us the most important thing a donor tool can do is help them talk to the right donor the right way. Generic blasts are getting worse results in a softer market, not just slightly worse, meaningfully worse.

The takeaway: your existing donor file is the most valuable asset you have right now. Read it carefully before you ask it for anything.

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7 strategies to protect your fundraising

Seven plays, ordered by leverage. If you only do one, do the first.

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1. Convert squeezed one-time donors into smaller recurring gifts

This is the single highest-leverage move in a downturn. The donor who used to give $1,000 once a year and now can't is often willing to give $25 a month, which is $300 over the year and, more importantly, a relationship that stays alive every month instead of going quiet. Build a recurring option into every form. Make it the default suggestion. Email your active donors and offer the switch explicitly: "If a smaller monthly gift fits better right now, here's the link." You can turn one-time donors into monthly supporters with a single toggle on your donation form.

Recurring revenue is also predictable revenue. In a year when forecasting is hard, that predictability is worth more than usual.

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2. Segment your outreach by donor capacity and recent giving

"Major donor who paused" needs a completely different note than "monthly donor still giving" or "lapsed donor from 18 months ago." Pull your donor records and tag them by capacity (historical gift size), recency (when they last gave), and engagement (whether they're opening email). Then write three different notes, not one. You can segment donors by capacity and recent giving with a free CRM using the donor records and filters built into Zeffy.

This is the move solo operators skip because it feels like a project. It isn't. With saved filters, it's about an hour the first time and ten minutes after that.

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3. Lead with impact transparency in every appeal

Donors are seeing the same headlines you are. Pretending nothing is happening reads as tone-deaf. Pretending everything is dire reads as panic. The middle path is honest: here's what's changed for us, here's what your gift does, here's what we're doing to stretch every dollar. Send the honest update directly from your dashboard so the same donor record powers the email and the giving page.

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4. Audit your donor communication timing

If your last three emails have all been asks, your next one shouldn't be. The ratio that works in a softer market is closer to three stewardship touches (thank-you, impact update, story) for every one ask. Pull up your sent folder. If you're inverted, fix it before you push the next campaign.

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5. Diversify revenue beyond individual giving

The orgs hurting least right now are the ones that weren't 90% dependent on individual gifts in the first place. Earned revenue (events, merchandise, fee-for-service), grants, corporate partnerships, and recurring giving each behave differently in a downturn. Read more on why nonprofits need to diversify their funding and pick the one diversification move you can credibly start in the next 90 days.

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6. Cut every dollar of fundraising overhead you can

When every gift is harder to win, every fee on top of that gift hurts more. Platform fees, transaction fees, credit card fees, monthly software costs: they all eat into the money that should be reaching your mission. Zeffy is 100% free for nonprofits, no platform fee, no transaction fee, no credit card fee, ever. That's how we can watch $100M+ in giving move through our platform every month: every dollar a donor sends reaches the cause. You can build a free donation form with one-time and recurring options in under an hour.

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7. Plan with a 6-12 month outlook, not a quarter

Downturns don't end on a tidy schedule. Stress-test your budget against a scenario where giving stays soft for the next two to four quarters. What do you cut, what do you protect, what do you accelerate? An org that's done that thinking before it needs to is calmer, and calmer orgs make better fundraising decisions.

If your next campaign isn't urgent and your donors are clearly stretched, it's also okay to wait. Patience is a legitimate strategy. A delayed appeal sent into a recovering market often outperforms an urgent appeal sent into a worried one.

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When will donations recover?

The honest answer is no one knows. What we do know from prior downturns is that they end, and that markets and giving tend to recover on different timelines.

Equity markets, over long horizons, have produced positive real returns. That long-run number doesn't comfort anyone watching a portfolio drawdown this quarter, and it shouldn't, because the two are different time horizons. A short-term drawdown can be sharp and real and the long-run trend can be upward; both things are true at once. For nonprofit budgeting, the relevant horizon is months and quarters, not decades.

The pattern from 2008-2009 is that giving lagged the market recovery by a year or two and took several years to return to pre-crisis real-dollar levels. The pattern from 2020 is that giving can actually rise in a crisis when stimulus and equity gains protect household balance sheets. 2025 doesn't cleanly resemble either. Plan for soft conditions through the next several quarters, and build a base of recurring revenue that doesn't depend on guessing the turn correctly.

What you can control: the relationships you keep alive while you wait.

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Key takeaways for nonprofit leaders

• The drop is real but uneven. Donations on Zeffy fell 37% after the April 2, 2025 tariff announcement, with gifts over $500 down 50% and gifts under $500 down 30%, against a $100M+ monthly baseline.

• This is a shrink, not a flight. Loyal donors are reducing gift size, not leaving. Treat them like the asset they are.

• Macro context. US giving was $592.50B in 2024 (Giving USA 2025). Q1 2025 retention slipped from 18.3% to 18.1% (AFP Fundraising Effectiveness Project). Inflation is 4.2% as of May 2026 (BLS).

• Sector matters. Religion, health, and direct services tend to hold steadier than arts, culture, and international work in a downturn.

• The single highest-leverage play is recurring-giving conversion. Offer your shrinking donors a smaller monthly path instead of writing them off.

• Then segment, communicate honestly, and cut fundraising overhead. A 100% free platform means every dollar your donors give reaches your mission.

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