Because of the sustained increases in overall charitable giving in recent years and rising donor confidence, it now appears possible that total giving could make a full recovery to its pre-recession record high sooner than anticipated.
by Gene Tempel, Ed.D.
If there was any doubt that Americans are committed to and resilient in their charitable giving, our estimates for giving in 2013 should lay those concerns to rest.
Giving from three out of four sources – individuals, foundations and bequests – grew in 2013, and the fourth – corporate giving – declined by just under 2 percent following high rates of growth in corporate giving the previous year.
Likewise, giving to seven of the 10 subsectors estimated by Giving USA grew in 2013. The change in giving to religion was essentially flat. This means that only giving to foundations and to international affairs declined materially.
Over the past several years – those following the Great Recession – Americans have been moderately but steadily rebuilding their customary giving patterns to U.S.-based charities. Our latest estimates for Giving USA 2014 indicate that total giving has increased 22.0 percent since the official end of the recession in 2009 (12.3 percent when adjusted for inflation).
Because of the sustained increases in overall charitable giving in recent years and rising donor confidence, it now appears possible that total giving could make a full recovery to its pre-recession record high sooner than anticipated. This is provided that recent growth rates in giving continue. In fact, giving to several types of charities (such as education, health and human services) has already reached or surpassed their previous record highs.
In 2007, total charitable giving achieved an all-time high at an estimated $349.50 billion (adjusted for inflation). Based on previous rates of growth in giving, in recent years the Indiana University Lilly Family School of Philanthropy estimated that reaching the pre-recession level might take several more years. More recent growth rates, though, provide cause for greater optimism. If total giving continues to grow at the current inflation-adjusted, two-year average rate of 4.2 percent, it may take just a year or two for giving to return to or pass the all-time record.
While many signs are positive, though, a full recovery in total giving in the near-term is not a sure thing. Instability in certain economic factors, such as unemployment, corporate profits and the volatility of the S&P 500, could restrain the level of overall growth in giving in the coming years.
Nevertheless, we are seeing encouraging signs for the continued growth in giving. In 2013, we saw a large number of very large gifts from individuals, couples and estates. This jump in large gifts and the sustained increase in overall giving may signal that wealthy donors are gaining confidence in their financial picture and their comfort in making larger and longer commitments. Although other donors may not yet be experiencing personal financial recovery at the same pace, it appears that their confidence is building as well.
Each year, the Indiana University Lilly Family School of Philanthropy is pleased to research and write the most comprehensive annual report on charitable giving on behalf of Giving USA Foundation. As always, it is an honor to share this important information with nonprofit professionals, donors, researchers and the public to help improve the practice of philanthropy in order to improve the world.
Gene Tempel, Ed.D., CFRE, is Founding Dean at Indiana University Lilly Family School of Philanthropy.