U.S. charitable donations rebounding, but slowly
By Maria Saporta
Published in the Atlanta Business Chronicle on Friday, June 21, 2013
As the economy continues to improve, charitable giving in the United States has increased. But at the current rate of growth, it will take another five years to reach the level of giving that the nation enjoyed at its height.
Americans donated $316.23 billion to charitable causes in 2012, according to the Giving USA Foundation and its research partner, the Indiana University Lilly Family School of Philanthropy.
“That is the largest number since 2008,” said David King, president of Atlanta-based fundraising firm Alexander Haas, who also is chair of the Giving Institute, which founded the Giving USA Foundation in 1985.
The record for giving in the United States was in 2007, when Americans gave a total of $344.48 billion.
“People like to talk about the lost decade of giving. It will be 2018 before we return to the 2007-2008 level of giving at the current rate of growth,” King said at the monthly meeting of the Association for Fundraising Professionals — Greater Atlanta on June 18 during a presentation of the annual report. “We now have three years of recovery,” King added. “We are back to the 2009 level of giving.”
Giving USA has been tracking charitable donations since 1956 and has been able to monitor trends in giving over the decades.
Among the highlights in this year’s report: giving by individuals, corporations and foundations all enjoyed increases.
King said that when it comes to corporate giving, companies continue to give about 2 percent of their pre-tax profits. Because profits have been at record highs, corporate contributions have increased 9.9 percent adjusted for inflation to $18.15 billion in both cash and in-kind contributions. “Almost all that growth is in in-kind contributions,” King said. “About half of all corporate donations are now in-kind donations.”
One of the largest categories in the in-kind sector is from pharmaceutical companies that donate drugs, vaccines and medicines to fight global diseases and illnesses. Individual giving also increased the past year — 1.9 percent adjusted for inflation. Individual giving continues to be the largest category by far with individuals donating $228.93 billion in 2012.
But King said that giving as a percentage of disposable income is at a relatively low 1.9 percent, perhaps because people are less certain about the country’s economic foundation and the future of the federal charitable tax donation exemption.
Giving by foundations also increased. Foundations gave an estimated $45.74 billion in 2012, a 2.3 percent increase when adjusted for inflation.
For entities on the receiving end of charitable donations, 2012 was a good year. Giving was up in almost every category with the exception of religion. Certain charities that had suffered steep declines in donations during the recession — arts and culture, the environment, animals, education and international causes — all enjoyed a rebound in 2012.
King said many donors may have shifted their giving to the more pressing needs in human and social services to help people who were being particularly hard hit by the economy.
But when looking over the longer trend lines, King said it is hard to ignore the sharp decrease in contributions to religion, which is still the largest category, receiving 32 percent of the pie. “The high-water mark [for giving to religion] was 53 percent in 1987,” King said. “Giving to religion is in trouble. We haven’t seen anything outside of the 30s (percentage points) since 1997. We are seeing historically low numbers of people who associate themselves with religion.”
In 2012, after religion, the largest recipients were education and human services (both tied at 13 percent); gifts to foundations (10 percent); health (9 percent); public society benefit (7 percent); international affairs (6 percent); arts, culture and humanities (5 percent); and environment/animals (3 percent).
Another trend is the total charitable sector has grown. Today there are nearly 1.1 million U.S. nonprofits operating.