Giving Hits $290 Billion, Maybe

June 20, 2011       Mark Hrywna      

Americans gave an estimated $290.89 billion to charity during 2010, probably.

Initial estimates show that overall giving was up 3.8 percent last year (2.1 percent adjusted for inflation), from $280.3 billion to $290.89 billion, according to Giving USA, a publication of Giving USA Foundation™ researched and written by the Center on Philanthropy at Indiana University, that was released this morning by the Giving Institute.

At that rate, it could take five or six year for giving to return to pre-recession levels, said Patrick Rooney, Ph.D., executive director of the Center on Philanthropy (CoP) at Indiana University. Adjusted for inflation, total giving exceeded $280 billion a year every year for the past decade, and surpassed $290 billion in six of the last seven years, he added.

As early estimates suggest that charitable giving in the U.S. started to come back last year, revised data indicate that it has further to rebound from the depths of the recession in 2008 and 2009.

Giving USA is the first comprehensive look at overall charitable giving in the United States for 2010, tracking charitable giving since 1956, and calculating total giving by about 75 million American households, 1 to 1.5 million corporations, some 120,000 estates and about 77,000 foundations.

Observers still were hopeful about the increase last year, after a combined drop of more than 13 percent the past two years. As a percentage of Gross Domestic Product (GDP), charitable giving remained at 2 percent, the 14th consecutive year it’s been at least that high.

“People are starting to give a bit more, give larger gifts, and probably give to more organizations. That’s good news in this overall compilation of data,” said Edith Falk, chair, Giving USA Foundation, and chair and CEO of Chicago-based consulting firm, Campbell & Company. “The positive news is that as the economy is recovering, so is philanthropy,” she said.

Revisions to last year’s initial estimates for 2009 changed the total giving number of $303.75 billion to $280.3 billion. Final estimates for 2008 also were revised downward, from a revised $315.08 billion last year after initial estimates in 2009 of $307.65 billion. Giving USA typically revises numbers annually as more data becomes available.

“It seems like we’ve gone quite a ways back in the giving and it’s going to take us a long time to recover, unless the economy takes a giant step forward,” said Elizabeth Boris, director of the Center on Nonprofits and Philanthropy at The Urban Institute in Washington, D.C. She expressed some concern about the significant revision to last year’s data. “It makes me a bit concerned about talking about $280 billion in 2009; you have to go all the way back to 2003 or 2004 to see numbers like that,” she said.

Individual giving was up by 2.7 percent, from $206.16 billion to $211.77 billion, according to estimates for 2010. Individuals continue to make up the bulk of giving, about 73 percent.

 

Revisions For 2009

 

Giving in 2009, initially estimated as a 3.6-percent decrease, actually dropped by 6.5 percent after revised data from the Internal Revenue Service (IRS) showed larger-than-usual decreases in itemized giving, said Rooney. Several variables were added to Giving USA’s basic model in forecasting household giving, said Rooney, “to capture the impact of the Great Recession” which seems to have led to larger variations in the data. With the volatility in the economy today, it was appropriate to add them to the model, he said, adding that the models will be re-evaluated over the next few years.

Giving USA refined its forecasting model to better capture the effects of economic volatility on giving, using a combined approach that incorporated for the first time preliminary estimates of giving from the IRS. “That’s certainly what pulled the numbers down,” said Rooney.

Previously, Giving USA only used final data from the IRS that wouldn’t be released until two years after the close of the tax year but 2010 estimates and the revised estimates for 2009 reflect the change. Final estimates for 2008 are based on IRS final data for that year.

 

Giving By Sector

 

Of the nine subsectors in the report, only environment/animals experienced an actual percentage decrease in giving. However, when giving is adjusted for inflation, four of the nine saw a percentage decline.

The largest increase was within international affairs, up 15.3 percent (13.5 percent inflation adjusted), to $15.77 billion. It made up about 5 percent of overall giving. The increase isn’t entirely attributable to disaster relief for the Haiti earthquake in 2010.

Only about a quarter of the $1.43 billion raised for Haiti relief, about $358 million, was classified as international affairs. The other three-quarters of it, about $1.07 billion, was recorded as human services. And still, human services barely nudged last year, up 0.1 percent (down 1.5 percent when adjusted for inflation). Human services made up 8 percent of all giving, about $26.49 billion.

Giving to donor-advised funds, as a result of appreciated assets, fueled the 6.2 percent increase (4.5 percent inflation adjusted) for the public-society benefit subsector, totaling $24.24 billion, or 8 percent of overall giving.

Among the surprises in the latest estimates was that the arts, culture and humanities subsector actually saw a jump of 5.7 percent (4.1 percent adjusted for inflation). The $13.28 billion given to the arts made up 5 percent of overall giving. The arts received the largest gift pledge last year: $250 million worth of art and furniture to the National Gallery of Art in Washington, D.C. Without the $250 million pledge, giving to the arts would have been closer to an even $13 billion.

Pieces of the charitable pie that go to specific subsectors didn’t change all that much. More than $100 billion went to religion, which accounted for 35 percent of the total, up from 33 percent last year. Still, adjusted for inflation, giving to religion was essentially flat; up 0.8 percent, but down 0.8 percent when adjusted for inflation.

Individual giving and religious giving reflects the economy, Boris said, and likely indicates that lower-income households haven’t yet rebounded.

Giving to grantmaking foundations makes up the second biggest piece of the charitable pie, at 11 percent, or $33 billion. Giving was up almost 2 percent, but when adjusted for inflation was up only 0.2 percent.

Education is typically the second largest recipient of giving, clocking in this year at a total $41.67 billion, or 14 percent of all giving. Giving was up 5.2 percent in education, 3.5 percent when adjusted for inflation.

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