by Robert I. Evans and Avrum D. Lapin
Giving USA: The Annual Report on Philanthropy, issued today by the Giving USA Foundation and its research partner, Indiana University Lilly Family School of Philanthropy, is considered the most definitive and prominent resource for information about directions and trends in charitable giving in the United States. The Report reviews and discusses giving by all types of donors, and while it does not focus on or feature any special groups or geographical parts of the U.S., we like to look at the Annual Report with a Jewish perspective and apply its relevant findings to our work with Jewish nonprofits across America and around the world.
GivingUSA has determined that overall giving increased slightly from 2011 to 2012; that Americans donated an estimated $316.23 billion to charitable causes in 2012. This encompassed gifts from individuals, corporations, and foundations.
Charitable giving in the United States increased in real dollars in 2012 by 3.5%, reflecting the third consecutive year of aggregate higher charitable support from donors living and dead, according to the annual landmark report that has tracked philanthropy for 58 years. Three years of consecutive increases indicate that there is some growing, albeit incremental, financial confidence by donors; that Americans may be feeling better about re-engaging or increasing their philanthropic activity.
We see this as good news and bad news, filled with challenges to nonprofit organizations seeking support from the Jewish community. While the levels of giving grew again in 2012, the numbers of tracked volunteer hours dedicated to America’s charities declined. Even with stronger levels of consumer confidence, donors are not being as generous as they once were and while the concept of charitable intent that has distinguished American donors still exists, Americans are not as generous today as they once were.
In advance of the release today of the Report, we spoke with both Dr. Patrick Rooney, Associate Dean for Academic Affairs and Research at the Indiana University Lilly Family School of Philanthropy, plus several other experts involved with data gathering and interpreting the results.
“Individual giving is closely linked with income and wealth, and the willingness to give is associated with donors’ financial confidence,” Dr. Rooney observed. “Individuals are more likely to support charities when they have the resources and confidence to purchase products.”
The “best year” for giving ever was 2007, when GUSA reported $344.48 billion in charitable support. The 2012 results are the closest that total giving has been to $300 billion since 2008. Dr. Rooney estimates that it will take another six to seven years for charitable giving to once again reach that high mark (when adjusted for inflation.)
Three other critical observations about the findings have relevance to Jewish as well as non-Jewish nonprofits:
- The slow pace of giving in 2012 possibly reflects donor attitudes about transformation and impact. Donors do not seem convinced that the cases for supporting many Jewish nonprofits are compelling enough yet, even though significant financial resources exist for more aggressive giving.
- The percentage of household income dedicated to charitable giving in 2012 fell – again – to only about 2% of available household dollars, reflecting a reluctance of donors to give generously, even though support for Donor Advised Funds accelerated to an all-time high.
- Support for the traditional “umbrella campaigns” (United Way, Catholic Charities, Jewish Federations, and others) continues to wane as donors increasingly state their desires to “touch” and directly impact the organizations they support.
Among the other highlights of the GUSA Report for 2012 are several key observations that may be relevant to Jewish donors and organizations serving the global Jewish community. Most notably we highlight several critical trends and implications:
Giving to Religion Goes Down Again
While giving to houses of worship in the U.S. remains the largest single category attracting donor support, this sector experienced a decline in both total dollars given and as a percentage of overall giving for the third consecutive year. Giving to religion, making up 32% of all giving, dropped by 0.2% in real dollars and 2.2% in inflation-adjusted dollars.
This decline is less concerning when compared to last year’s 4.7% decline in inflation-adjusted dollars. However, the downward trend could indicate that continuing decreases in participation in religious life are resulting in decreased giving for religious organizations, which will free up new charitable dollars for other sectors, such as education and social services. (Note: this category reflects support for all types of houses of worship only.)
Mainline Protestant denominations and the Catholic Church are cited in the report as experiencing the greatest declines in giving to religion in America, but we know firsthand that many Jewish congregations are experiencing declines in giving as a result of lower affiliation rates and a competitive philanthropic arena.
We expect to see better analyses of Jewish giving reflected in next year’s GUSA report, based on findings in a landmark study focused on Jewish giving. Indiana University is also spearheading that study.
Giving to Education Remains Strong and on the Rise
With a 7% increase in giving in 2012, Education remains the second largest sector that donors support. The majority of donations within this category (approximately 75%) are giving in support of four-year colleges and universities. Large capital and endowment campaigns continue to dominate college campus fundraising efforts in 2012. Two notable examples are Stanford University, which became the first university to raise more than $1 billion in pledges in a single year, according to the Council for Aid to Education, and the University of Pennsylvania, which raised $4.3 billion over the total of its “Making History” campaign, which concluded in 2012.
Support for America’s Jewish day schools is included in this category but the numbers are neither tracked nor segregated – yet.
Corporate Contributions Increase
Corporate giving rose 12.2% in 2012 (9.9% adjusted for inflation), to an estimated $18.15 billion. This total includes gifts from both corporations and their foundations of cash, in-kind donations, and grants. This increase in giving may be credited to the strengthening economy, as corporate pre-tax profits surged upward 16.6% in 2012, according to the Bureau of Economic Analysis. Experts at the Giving USA Foundation posited that the 10% inflation-adjusted growth in corporate giving was driven by strong gains in corporations’ pre-tax profits and a moderate rise in the GDP.
Corporate support represents an overemphasized proportion to the nonprofit community. While corporate donations increased last year, corporate philanthropy represents only 6 percent of total giving. And hidden in these figures are significant gifts-in-kind, especially from the pharmaceutical and technology companies, where they received some tax deductions because of donated drugs and computers.
We emphasize, too, that 80% of total giving continues to come from individuals and their estates. Plus, when giving by family foundations is included in this total, it is clear to see that individuals are truly driving American philanthropy, bringing the total up to 86% of all charitable giving.
Giving to Arts & Culture Increases Significantly
Giving to arts, culture, and humanities experienced significant growth in 2013, garnering an estimated $14.44 billion in charitable contributions, a 7.8% increase from 2011 (5.7% adjusted for inflation). This is one of the sectors that experienced a significant decrease during the Great Recession! Notably, giving to the environment and animal causes saw an estimated 6.8% increase in 2012 (4.7% adjusted for inflation), up to $8.30 billion.
“Both types of organizations were impacted by the economic downturn as some donors shifted their giving toward what they viewed as essential services to help others in need,” said Una Osili, Ph.D., director of research at the Indiana University Lilly Family School of Philanthropy.
“The growth in giving to arts- and environment-related organizations may be an indicator that donors began returning to their personal giving priorities amidst an economy that they perceived as recovering,” she added.
How to Find the Annual Report
Giving USA: The Annual Report on Philanthropy has detailed America’s annual estimated charitable contributions – and how they are used – since 1956, making it the longest running study of its kind. The complete GUSA report plus an executive summary are both available at givingusareports.org.
Robert I. Evans, Managing Director, and Avrum D. Lapin, Director, are principals of The EHL Consulting Group, a prominent fundraising consulting firm located in suburban Philadelphia. They are frequent contributors to eJewishPhilanthropy.com. Mr. Evans serves on the GUSA Foundation Board and as a member of the editorial review board for GUSA. The EHL Consulting Group is one of only 38 member firms of The Giving Institute. EHL Consulting works with dozens of nonprofits on fundraising, strategic planning, leadership development, and nonprofit business practices and strategies. Learn more at ehlconsulting.com.
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images courtesy Giving USA Foundation