Has America’s Charitable Giving Climbed out of its Great Recession-fueled Trough?

Giving USA estimates total charitable donations increased to $298.42 billion in 2011, reflecting other similar gains across the economy. Estimates contained in Foundation's 57th consecutive report.

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2012 Giving USA and Center Logos for Release
Charitable giving seems to be climbing out of the trough that resulted from the Great Recession," said Jim Yunker, Ed.D., chair of Giving USA Foundation, "much like some other indicators measuring the state of the economy.

Chicago (PRWEB) June 19, 2012

Total charitable contributions from American individuals, bequests, corporations and foundations were an estimated $298.42 billion in 2011, up from a revised estimate of $286.91 billion for 2010, Giving USA Foundation™ and its research partner, the Center on Philanthropy at Indiana University, announced today.

The 2011 estimate, detailed in Giving USA’s 57th consecutive annual report, represents growth of 4.0 percent in current dollars and 0.9 percent in inflation-adjusted dollars.

“America’s charities have been traveling down a very rocky road in recent years, as evidenced by the data in our annual estimates and reports from those working in the field,” said Jim Yunker, Ed.D., chair of Giving USA Foundation™. “Our Board members are cognizant of that reality but also see a bright spot-- charitable giving, like other spending categories in the average American household budget, seems to be climbing out of the trough that resulted from the Great Recession, much like some other indicators measuring the state of the economy.”

“Our charitable giving estimates reflect what happened across the American economy in 2011,” said Thomas W. Mesaros, CFRE, chair of Giving Institute, the group that formed the Foundation in 1985. “After years of a very tough environment for philanthropic causes, 2011’s results might come with a subdued sigh of relief among those engaged in service through charitable activities,” he added.

“The estimates for giving in 2011 are encouraging, but they demonstrate that charities still face ongoing challenges,” says Patrick M. Rooney, Ph.D., executive director of the Center on Philanthropy. “In the past two years charitable giving has experienced its second slowest recovery following any recession since 1971.”

Giving USA: The Annual Report on Philanthropy, has detailed annual estimated charitable contributions by Americans – and how they are used – since 1956, making it the longest-running study of its kind.

Its research, conducted by the Center on Philanthropy at Indiana University since 2000, estimates all giving to all charitable organizations across the United States. These national estimates do not show changes any one organization or geographical region might observe – they calculate total giving by about 117 million households across America, approximately 12.4 million corporations that claim charitable deductions, an estimated 99,000 estates, and about 76,000 foundations.

The donations go to about 1.1 million IRS-registered charities, plus a conservative estimate of 222,000 American religious organizations.

INCREASES SEEN IN 11 OUT OF 14 DONOR AND RECIPIENT CATEGORIES

GIVING ESTIMATES BY TYPE OF DONOR:

A Look Behind the Numbers:

  • Over the past 40 years, total giving grew by an average of 2.6 percent, adjusted for inflation, in the two-year period after each recession. By comparison, giving grew by an average rate of 1.1 percent for 2010 and 2011.
  • As has been the case since Giving USA first examined charitable donations in 1955, individuals accounted for the vast majority of estimated gifts in 2011 – 73 percent of total giving. When giving by bequests and family foundations is added to that, the total share of giving provided by American households increases to 88 percent.
  • Individual giving as a percentage of disposable personal income remained at 1.9 percent in 2011, the same as in 2009 and 2010.

“The fact that individual giving as a percentage of disposable personal income held steady for the second consecutive year signals that Americans remain committed to helping others,” Rooney said. “However, people have had to make tough decisions about how they spend their money, and many have had to reduce the portion of their budget that goes to charity below what they normally give. Individual giving increased in 2011, but as a share of disposable personal income it was far below the high of 2.4 percent seen in 2005.”

  • At first, the amount estimated for giving by corporations in 2011 might seem surprising – it was basically flat at $14.55 billion when compared to the revised 2010 estimate – but the majority of respondents in several surveys and reports in 2011 indicated that their companies’ charitable donations were unlikely to rise during that year.
  • Additionally, growth in corporate pre-tax profits was a modest 4.2 percent in 2011 compared to the 25 percent increase seen in 2010; this measure is traditionally a key factor in corporate donation levels.

“One way to examine corporate giving over time is through the lens of inflation,” Yunker said. “Giving by corporations increased more slowly than the average annual inflation rate between 1971 and 2011; donations by American companies grew 3.1 percent over that time frame, while inflation averaged 4.4 percent annually over those 40 years.

“Corporate generosity is real, and the nation’s charities would certainly feel its absence should the contributions go away,” Yunker added. “However, at a year-in, year-out 5 percent-sized slice of the giving pie, pragmatic nonprofits should consider additional potential funding sources when planning their appeals.”

Giving by individuals
↑ At $217.79 billion, giving by individuals rose an estimated 3.9 percent in 2011 (0.8 percent in inflation-adjusted dollars). Giving by individuals represented 73 percent of total giving.

Giving by bequest
↑ Gifts from estates were an estimated $24.41 billion in 2011, a 12.2 percent increase over 2010 (8.8 percent increase in inflation-adjusted dollars). Giving by bequest represented 8 percent of total giving.

Giving by foundations
↑ Grant-making by private, community and operating foundations increased 1.8 percent in 2011 (decline of 1.3 percent in inflation-adjusted dollars) to $41.67 billion. Giving by foundations represented 14 percent of total giving.

Giving by corporations
(Flat) Estimated donations by corporations and their foundations in 2011 were $14.55 billion, a 0.1 percent decline in current dollars, or a 3.1 percent decline as measured by inflation-adjusted dollars. Giving by corporations represented 5 percent of total giving.

GIVING ESTIMATES BY TYPE OF CHARITY RECEIVING DONATIONS

Giving USA annually examines how total donations are divided among 10 subsectors, or types, of charities.

A Look Behind the Numbers:

  • Several factors may have affected the second straight year of estimated decreases in donations to religious organizations. These include: declines in church membership and attendance, particularly among mainline Protestant denominations and a changing economic environment that affected the amounts Americans felt they could give.
  • A closer look at giving to human services organizations reveals that donations continue to be strong. Typically, increases in gifts to this subsector are seen during times of perceived need; it is possible that pertinent messaging from these charities is still resonating with donors.
  • Giving to international organizations grew 240.0 percent in current dollars or 167.1 percent in inflation- adjusted dollars between 2001 and 2011.

“International giving has increased rapidly in the past decade, making it the fastest growing subsector,” said Una Osili, director of research for the Center on Philanthropy. “This likely reflects the fact that the number of charities working in international affairs has expanded enormously during roughly the same period. Additionally, as more people become aware of international needs through expanding technology, more U.S. donors are choosing to support causes beyond their local and national communities.”

Giving to religion
↓ While estimated giving to religious organizations—$95.88 billion in 2011—retained its traditional spot as the largest type of recipient at 32 percent of the total, it was one of only two subsectors to experience a decline. Measured in current dollars, that decline was 1.7 percent; the inflation-adjusted decrease amounted to 4.7 percent.

“Viewed another way, giving to religion, along with membership in certain mainline Protestant denominations, is declining, while the American population grows, on average, 1.0 percent every year,” said Mesaros. “It might be too soon to call the drops in this particular category a trend, but I think they bear watching – and not just by church-affiliated organizations. Any charity that is heavily dependent on members for the majority of its annual budget needs to be cognizant of issues that could affect growth, commitment and donations.”

Giving to education
↑ At $38.87 billion in estimated donations for 2011, giving to education saw a 4.0 percent increase in current dollars over 2010. The inflation-adjusted increase was essentially flat at 0.9 percent. Educational organizations received 13 percent of charitable donations in 2011.

Giving to foundations
↓ Donations declined an estimated 6.1 percent in current dollars to $25.83 billion (an 8.9 percent decrease in inflation-adjusted dollars). Foundations received 9 percent of charitable donations in 2011.

Giving to human services
↑ At $35.39 billion, donations to human services-related charities rose 2.5 percent in current dollars, but were essentially flat in inflation-adjusted dollars (0.6 percent decline). Nevertheless, an historical look shows that the 2011 estimate was the third-highest ever recorded (inflation-adjusted dollars) for this category, only lagging behind 2008 and 2010. Human services organizations received 12 percent of charitable donations in 2011.

Giving to health
↑ Health organizations saw an estimated increase of 2.7 percent (0.4 percent decline when measured by inflation-adjusted dollars) to $24.75 billion. Health organizations received 8 percent of charitable donations in 2011.

Giving to public-society benefit
This category includes certain types of donor-advised funds, as well as umbrella organizations such as United Ways, the Combined Federal Campaign and Jewish Federation of North America that collect donations and redistribute them to other charitable organizations.

↑ For 2011, the public-society benefit giving estimate grew to $21.37 billion, an increase of 4.0 percent. In inflation-adjusted dollars, the change was essentially flat at 0.9 percent growth. Public- society benefit organizations received 7 percent of charitable donations in 2011.

An interesting fact to note within this type of organization is that the nation’s three largest donor- advised fund administrators – Fidelity Charitable Gift Fund, Schwab Charitable Gift Fund and Vanguard Charitable Gift Fund – realized average growth of 77 percent in contributions received between 2010 and 2011.

Giving to arts, culture and humanities
↑ At an estimated increase of 4.1 percent in 2011 (1.0 percent increase in inflation-adjusted dollars), the estimated total for these types of charities was $13.12 billion. Arts, culture and humanities organizations received 4 percent of charitable donations in 2011.

Giving to international affairs
↑ This sector again saw a substantial increase in estimated donations, rising 7.6 percent (4.4 percent increase in inflation-adjusted dollars) to $22.68 billion. International affairs organizations received 8 percent of charitable donations in 2011.

Since 1987, inflation-adjusted giving to the international subsector has grown much faster than the 4.4 percent average annual rate of inflation, experiencing an average annual growth of 9.4 percent.

Giving to environmental/animal organizations
↑ At an estimated 4.6 increase, donations totaled $7.81 billion to these types of charities (1.4 percent inflation-adjusted dollar increase). Million-dollar-and-up gifts to support continuing clean-up efforts from the 2010 Gulf of Mexico oil spill likely contributed to the increase seen here. Environmental/animal organizations received 3 percent of charitable donations in 2011.

Giving to individuals
This type of donation includes grants from foundations to benefit specific individuals. Most often, they are gifts of medications to patients in need made by operating foundations created by pharmaceutical manufacturers. Individuals received 1 percent of charitable donations in 2011.

↑ These types of gifts were estimated to have increased 9.0 percent in 2011 to $3.75 billion of total giving (5.6 percent increase in inflation-adjusted dollars).

Unallocated
Giving USA annually calculates the unallocated piece of the giving “pie.” For 2011, it is estimated to be $8.97 billion, or 3 percent of the total.

These donations cannot be attributed to any one particular kind of charity for numerous reasons. They include: differences between when an itemizing household claims a donation and when the recipient organization receives it; gifts by households to government entities, which are not captured on nonprofit Forms 990; gifts made by foundations to organizations in other countries; or gifts to charities that have not yet been categorized.

Brief Overview of Giving USA methods
The Center on Philanthropy at Indiana University prepares all the estimates in Giving USA for Giving USA Foundation™. Giving USA’s annual estimates are based on econometric models using tax data, government estimates for economic indicators and information from other research institutions. Data sources include the Internal Revenue Service, Bureau of Economic Analysis, Foundation Center, Independent Sector, Council for Aid to Education, National Center for Charitable Statistics at the Urban Institute, and National Council of Churches of Christ in the USA.

The Giving USA report estimates changes in giving to subsectors (health, arts, education, etc.), except for giving to religion, foundations and individuals. The subsector estimates are based on econometric models and use historical data from Forms 990 submitted to the IRS, as well as contemporaneous economic variables found to be highly predictive of changes in uses of giving.

Giving USA’s estimates are based on the most current data available at the time the estimates by source and use are compiled and are updated annually as new data become available (e.g., as the IRS and other data sources release their revised estimates). For the last several years, Giving USA has incorporated historical Forms 990 data into the “uses” estimates (estimates of donations received by nonprofit organizations). Revisions to 2010 and 2009 estimates, by source, are on pages 32 and 33 of the full press kit, which is available on request to media organizations.

Since approximately one-third of U.S. households itemize charitable deductions on their tax returns, Giving USA also calculates giving estimates from non-itemizing households based on the Center on Philanthropy Panel Study (COPPS), the largest, longest-running panel study of household giving over time in the world. This has become a key variable in calculating annual estimates because more than two-thirds of American households donate something to charity annually.

NOTES TO EDITORS:
Data for 1971 through 2011 are available to media upon request. The data show sources of contributions by year in current and inflation-adjusted dollars and allocation of gifts by type of recipient organization (uses), also in current and inflation-adjusted dollars. Data also are available showing total giving as a percentage of gross domestic product, individual giving as a percentage of disposable income and corporate giving as a percentage of corporate pre-tax profits.

The requested citation for Giving USA is: Giving USA: The Annual Report on Philanthropy, a publication of Giving USA Foundation™, researched and written by the Center on Philanthropy at Indiana University

About Giving USA Foundation™
Advancing the research, education and public understanding of philanthropy is the mission of Giving USA Foundation, founded in 1985 by the Giving Institute. Headquartered in Chicago, the Foundation publishes data and trends about charitable giving through its seminal publication, Giving USA, and quarterly reports on topics related to philanthropy. Visit http://www.GivingUSA.org for more information.

About The Center on Philanthropy
The Center on Philanthropy at Indiana University is a leading academic center dedicated to increasing the understanding of philanthropy and improving its practice worldwide through research, teaching, training and public affairs programs in philanthropy, fundraising and management of nonprofit organizations. For more information, visit http://www.philanthropy.iupui.edu.

About Giving USA Reports
Giving USA: The Annual Report on Philanthropy is published by Giving USA Foundation™ and is a public service initiative of the Giving Institute. Giving USA is the longest running, most comprehensive report on philanthropy in America. For more information, visit http://www.GivingUSA.org.

The complete Giving USA 2012 report, with estimates covering 2011 giving, will be available at GivingUSAReports.org by June 20, 2012. A complimentary executive summary with key findings also will be available, thanks to support from donors and sponsors. Later this month, the Giving USA reports website will be completely updated, with new user-friendly features.

Options available for purchase include the full report with 30+ charts and explanatory text, plus chapters on sources and uses of contributions, as well as PowerPoint presentations based on the charts in the report. Giving USA Foundation also annually publishes four reports, Giving USA Spotlight, which are researched and written by the Center on Philanthropy at Indiana University. Each issue provides in-depth analysis on a specific topic related to charitable giving and fundraising in the United States.

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