For the first time in four years, Americans are saying they are more likely to increase their giving to charity rather than decrease their charitable support, according to the annual Dunham+Company New Year’s Philanthropy Survey conducted by Wilson Research Strategies.
Compared to 2010’s survey, the changes are quite significant. For instance, there is a 29% surge in households that say they plan to increase their giving in 2011 over 2010, a 20% jump in households that say their giving will stay the same from 2010 to 2011, and a 48% drop in the number of households who say they will decrease their giving in the coming year.
The increase in giving is most prominent among households earning $50,000 or more, as 1 out of 3 intend to increase their giving. In households earning $100,000 or more, 77% intend to give the same and nearly 1 out of 5 intend to give more, with only 5% saying they intend to give less. The upper income households are especially significant as the more wealthy households in the U.S. provide the most support to charities.
The greatest concentration of increased giving for 2011 will most likely be in the Northeast and the South as 1 in 5 households in these regions say they intend to increase their giving, compared to only 16% in the West and 14% in the Midwest. In addition, 1 in 3 minorities indicate they are more likely to increase their giving compared to only 15% of Caucasians.
This upbeat news for charities is fostered by the fact that nearly 3 out of 4 Americans (72%) say their financial situation has improved or at least stayed the same. This trend is especially pronounced in the West, South and Northeast where 1 out of 4 respondents indicated their situation has improved.
Especially important to charities is the fact that households making more than $50,000 indicate their financial situation has improved, with over 1 in 4 making $50,000-$100,000 indicating as such. Most importantly, 35% of households making $100,000 or more say their financial fortunes have increased.
As the debate grows over tax reform and the possible elimination of the charitable tax deduction, nearly 1 in 2 Americans (48%) indicate that the deduction is important to them in determining the amount they will give to charity. The importance of the charitable deduction increases as the household income increases with nearly 2 out of 3 (62%) of those who make $100,000 or more saying it influences their giving.
Commenting on possible changes in tax law, Rick Dunham, President and CEO of Dunham+Company stated, “I must say I am concerned with the potential impact on charities should Congress move to eliminate the charitable tax deduction as part of tax reform. The study shows clearly that this tax deduction is a significant factor in giving for the households that are the backbone of charity. Based on IRS data, households making $100,000+ represent about 10% of the population but make up 69% of all individual charitable giving, which would equal nearly $160 billion.”
“Most people don’t realize that the non-profit sector represents nearly 1 in 10 jobs in America and that donations make up over 2% of GDP. And while ideas like a government credit of 15% similar to Gift Aid in the UK have been floated to support charities, ideas like that are a non-starter,” continued Dunham. “Per capita giving in the UK is about $275 USD whereas per capita giving in the U.S. is around $1,000. Even the new government in the UK is pushing toward an American-style tax deduction for high-end earners to stimulate greater support for charities in that country.”
“Based on our research, 2011 is a year we could see the beginning of a comeback for charities. Congress must be careful, however, to not undermine the strongest and most effective charitable sector in the world,” Dunham concluded.
The study was part of Wilson Research Strategies January Omnibus Study of 1,000 adults nationwide. All respondents were contacted via Random Digit Dialing methodology. Interviews were conducted via live telephone interviewer Jan. 6-10, 2011. A sample of 1,000 has a margin of error of +/-3.1 percent at the 95% confidence level.