Giving USA Methodology Raises Some Questions
by Robert I. Evans and Avrum D. Lapin
When The Giving Institute and the Center on Philanthropy at Indiana University announced results for charitable giving for 2009, some people expected less positive news and thus questioned the exciting results. The Giving USA (GUSA) annual report, now in its 55th year, estimated total 2009 U.S. charitable giving at approximately $304 billion, reflecting only a 3.6% decline over record giving in 2008 and the third consecutive year that giving exceeded $300 billion.
Those who wondered aloud about the slight decrease in giving tried to point fingers at the methodology employed to develop the announcement. The raised eyebrows focused especially on itemized/non-itemized giving as reported by the IRS since the overwhelming preponderance of giving comes from individuals (in both current and testamentary giving). Others expressed skepticism about certain other aspects included in the report.
To respond to questions about the methodologies employed, Melissa S. Brown, the report’s long-standing managing editor, circulated a memo last week to members of The Giving Institute addressing and clarifying these and other issues. She emphasized that the June 9th announcement represents an estimate of giving and that final figures cannot be confirmed for at least two more years, primarily because of a lag in reporting by and to the IRS.
That said, historically the GUSA reports have been quite accurate statistically, and well within acceptable guidelines. In fact, in only one or two years of the report did GUSA estimates surpass actual results!
Brown pointed out that the data sources used to determine these estimates are:
- Estimates for individual itemized giving derived from the historical relationship of itemized giving per IRS records and larger economic trends, such as stock market changes and personal income changes
- Estimates for individual non-itemized giving from the Center on Philanthropy’s Panel Study 2007
- Estimates for corporate giving come from the historical relationship of corporate deductions for charitable giving per the IRS and corporate profits and other economic trends
- Estimates for foundation giving from the Foundation Center and its surveys
- Estimates for estates filing an estate tax return combining information about actual amounts received by colleges and universities per the Council for Aid to Education and the historical relationship between higher education bequests and what appears in IRS data from estates
- Estimates for estates below the filing threshold from Giving USA estimates, using information from long-running studies about the percentage of decedents who leave something to charity and the number of adult deaths
During the year following the publication of each edition of Giving USA, the figures are revised as more accurate data becomes available. It is important to point out that in the past, Giving USA estimates have been extremely close to the actual findings, thereby building our confidence that this is a reliable measure of charitable activity. In fact, for the period 2000 through 2007, Giving USA’s initial estimate was within 1 percent of the final result, on average.
Further, the methods used to estimate the figures are constantly being reviewed and adapted to ensure greater accuracy. Future editions of Giving USA will reflect newer methodologies, she indicated, including having data from IRS Forms-990 filed in 2008 and 2009.
One goal is to gain a better determination of the number and amount of bequests dedicated to congregations and religious organizations, a specific research area that Giving USA would like to pursue for future editions, as the creators of this report are constantly looking to add new and important topics or trends that are relevant to charitable giving.
A member firm of The Giving Institute, EHL Consulting participates in analyzing the results for their relevance to non-profits campaigning actively across America. (Principal Robert Evans is a contributing member of the Editorial Review Board.)
As with any research or reference piece, we have familiarized ourselves with the methods used and recognize that these estimates still represent historically approximations and are open to interpretation. Giving USA clearly explains its research methodologies in its report and we suggest that all readers be sure to review this key section. To obtain a free executive summary of Giving USA go to givingusa2010.org.
A detailed article on the Giving USA results for 2009, along with thoughts on what this means for non-profits in the Jewish community, can be found here.
Robert I. Evans, Managing Director, and Avrum D. Lapin, Director, are principals of The EHL Consulting Group, of suburban Philadelphia, and are frequent contributors to eJewishPhilanthropy.com. EHL Consulting works with dozens of nonprofits on fundraising, strategic planning, and non-profit business practices. Become a fan of The EHL Consulting Group on Facebook.