Donors Splurge: Giving Hits $358.3 Billion
June 16, 2015 Mark Hrywna
Charitable giving in the United States was up 7.1 percent — 5.4 percent when adjusted for inflation – compared to 2013, with much of the sector returning to pre-recession levels sooner than originally projected. It’s the fifth consecutive year that giving has increased.
Preliminary estimates pegged total giving at $358.38 billion last year, up from a revised $339.94 billion in 2013, according to “Giving USA 2015: The Annual Report on Philanthropy for the Year 2014” released today. The 60th annual report is researched and written by Indiana University Lilly Family School of Philanthropy and sponsored by Giving USA Foundation, a public service initiative of The Giving Institute. These initial estimates are based on an assortment of econometric models and will be revised twice, finalized when Giving USA’s preliminary report on 2016 giving will be released in 2017.
Giving USA authors estimated two years ago that it might take six or seven years to reach the 2007 inflation-adjusted high of $355.17 billion in giving. It’s the third largest increase in the past decade, behind only 2005 (12.4 percent) and 2012 (10.3 percent). The average increase the last five years has been 5.5 percent, or 3.4 percent when adjusted for inflation.
As a percentage of Gross Domestic Product (GDP), giving inched up from 2 to 2.1 percent. For many years, it’s been at 2 percent, with a high of 2.2 percent.
Nearly all corners of the charitable world have returned to pre-recession levels and sooner than originally projected. Only international affairs reported a decrease last year, down 2 percent, or 3.6 percent when adjusted for inflation, to $15.1 billion. Giving to international affairs was down for the third straight year, something officials attributed to there being no major international disasters. Otherwise, each sector saw giving a rise, led by arts, culture and humanities:
- Arts/culture/humanities, 9.2 percent (7.4 percent adjusted for inflation), to $17.23 billion;
- Environment/animals, 7 percent (5.3 percent), to $10.5 billion;
- Health, 5.5 percent (3.8 percent), $30.37 billion;
- Public-society benefit, 5.1 percent (3.4 percent), $26.29 billion;
- Education, 4.9 percent (3.2 percent), $54.62 billion;
- Human services, 3.6 percent (1.9 percent), $41.1 billion;
- Religion, 2.5 percent, (0.9 percent), $114.9 billion; and,
- Foundations, 1.8 percent (0.1 percent), $41.62 billion.
Religion continued to be the single largest recipient of giving, however, it also continued a 30-year decline. While religion once accounted for more than half of giving – 53 percent in 1987 – last year it comprised less than a third (32 percent) of all giving.
“While circumstances vary from organization to organization, it appears the nonprofit sector overall can at last focus on expanding giving rather than regaining lost ground,” said Amir Pasic, Ph.D., dean of the Lilly Family School of Philanthropy.
The only areas that have not yet returned or passed pre-recession levels are giving to foundations, public-society benefit and international affairs.
“We found a dramatic slowing down of giving to support the largest national donor-advised funds. This may have slightly dampened giving to the public-society benefit subsector,” said Una Osili, Ph.D., director of research at the Lilly Family School of Philanthropy. “We also know that giving to some pass-through charities — those that redistribute their funds to other organizations — have seen little to no growth in recent years,” she said.
Mega gifts, particularly from young technology entrepreneurs, boosted giving considerably but Osili said overall giving still would have been up had they not been taken into account.
Patrick Rooney, Ph.D., associate dean for academic affairs and research at the Lilly Family School of Philanthropy, noted that while total inflation-adjusted giving has grown beyond its prior peak, caution is warranted. “As three of the four sources of giving have not yet exceeded their previous peak levels, with only foundation giving reaching its prior high, it is still too early to tell if total giving will sustain above the pre-recession level,” he said.
The four primary sources of total giving all were up:
- Individuals, 5.7 percent (4 percent inflation-adjusted), $258.51 billion;
- Foundations, 8.2 percent (6.5 percent), $53.97 billion;
- Bequests, 15.5 percent (13.6 percent), $28.13 billion; and,
- Corporations, 13.7 percent (11.9 percent), $17.77 billion.
Individual giving comprised 72 percent of the total. Gifts from all three types of foundations — community, independent and operating — all were up. Changes are influenced most by grants from independent foundations, whose gifts were up 7.8 percent and accounted for almost three-quarters of the category’s total.
“Individual giving is affected by available disposable income at the household level, wealth and growth in the S&P 500. All three increased last year, as did the amount people spent in general — not just on charitable donations,” said W. Keith Curtis, chair of the Giving USA Foundation and president of Virginia Beach, Va.-based consulting firm, The Curtis Group. “With virtually every economic indicator that gets measured showing growth, I think it’s safe to conclude they played a large part in making 2014 a banner year for giving from every source,” he said. Major stock indices all were up in 2014, including the S&P 500, up 11 percent, NASDAQ up more than 12 percent, and the Dow Jones up 7.5 percent.
“Corporate giving decisions, on the other hand, have historically been driven by changes in pretax profits and GDP,” Curtis said. “Other factors might be affecting how much they donate; time – and further research – will tell.”