ShoppingGives partnered with Coresight Research to generate an analysis of the annual State of Social Impact Report. The analysis conducted for this report found that despite economic uncertainty and fears of an upcoming recession, socially conscious consumers are still willing to spend a greater share of their reduced spending with purpose-driven brands. 

To understand the patterns and trends in consumer behavior, we analyzed three unique datasets:

• A year-long analysis of sales and donation behavior from our merchant partners.
• An independent survey of 500 merchants on their perception of social impact for their business.
• A direct analysis of the homepages of the top 1,000 Internet and Direct-to-Consumer retailers around GivingTuesday 2022.

From the analysis, this report breaks down:

• How pressing economic conditions have impacted socially conscious consumers over the past year.
• How corporate social responsibility drives consumer purchase behavior.
• How brands can create a social impact strategy that resonates with their target audience.

Despite reduced spending, it’s clear that consumers are continuing to prioritize their values. This means that even during times of uncertainty, impact-driven marketing can help businesses create deeper, more engaged customer relationships, drive repeat business, and maximize impact, all through shared values.

A Look Back at 2022 and 2023 Year to Date

In 2022, the financial landscape was marked by a surge in inflation and mounting interest rates, creating a climate of economic uncertainty. Consumer prices escalated by 9.1% by June 2022, while job layoffs and escalating inflation amplified concerns of an impending recession, causing the S&P 500 to plummet by 19%.

With discretionary spending down, the instinct for many consumers and businesses would be to cut charitable spending. As a result, many nonprofit organizations would feel particularly sensitive to this downward trend.

However, the downturn did not deter charitable giving, with Fidelity Charitable reporting record-breaking grants to charities in 2022. This resonates with the broader trend of consumer preferences. McKinsey & Company revealed that, despite a YOY decline in overall consumer spending, Millennial and Gen Z purchasing behavior continued to favor environmental, social, and governance (ESG) initiatives and corporate social responsibility (CSR).

With retail sales predicted to grow by the end of 2023, there is a promising outlook for businesses committed to corporate social responsibility and for nonprofits recovering from the recent economic setbacks.

How Corporate Social Responsibility Can Address Economic Challenges

Consumer donations and spending are influenced by a complex array of factors, such as economic uncertainties like inflation, supply chain disruptions, and recession fears, as well as brand loyalty, trust, and value-alignment. 

With many American consumers feeling uneasy about the current economic and social climate, these consumers are increasingly placing their trust in businesses rather than governments.

This evolving landscape sets the stage for businesses to become drivers of social change, as consumers increasingly expect brands to incorporate charitable giving and social impact into their strategies.

As consumers tighten their wallets and businesses respond by trimming budgets, corporate social responsibility initiatives often face cuts due to their perceived lack of easily measurable return on investment (ROI). 

However, brands that remain authentic and consistent in their commitment to social causes during economic hardships can foster stronger customer trust, loyalty, and long-term value.

How Consumer Values Motivate Purchase Decisions

Traditionally guided by factors like cost and convenience, consumers are increasingly making purchase decisions based on their values. These purpose-driven consumers are even willing to pay a premium to shop with brands who demonstrate a commitment to social responsibility.

One critical aspect of this consumer-business relationship is building brand trust. While creating value-alignment is crucial, the connection between brand values and consumer purchasing isn't straightforward.

Brands must go beyond adopting values simply based on what they think their customers want, and instead embrace consistency in their social impact narrative to earn long-term trust and loyalty. 

To establish a credible and authentic reputation within the social impact space, businesses can align themselves with local or smaller nonprofit organizations that share the same values as their brand. This strategy not only engages brands with their communities, but it also aids smaller nonprofits who may be overcoming the fundraising void left from the recent economic downturn. 

It also gives these brands an advantageous opportunity to offer their customers a unique motivation for purchases.

Where Do Consumers, Businesses, and Nonprofits Go From Here?

As the retail landscape continues to evolve, consumers are seeking stronger connections with the brands they support, while nonprofits strive to establish deeper relationships with businesses. 

Incorporating an impact-driven marketing strategy can enable brands to build more loyal communities, drive repeat business, and amplify their social impact. 

Building credibility within the social impact space and establishing trust as a reliable donor takes time, which means the opportunity to do so is now, especially as the buying power of Millennials and Gen Z increases.

Discover the full in-depth look into trends in consumer spending and donation behavior, as well as data-driven insights on why businesses need to prioritize social impact for their organization by downloading the full report below.

Download the Report