U.S. Giving Increased in 2010

by Robert I. Evans and Avrum D. Lapin

Charitable giving in the U.S. increased by almost four percent in 2010, a significant announcement that comes today from The Giving Institute and its research partner, the Center on Philanthropy at Indiana University. The $290.89 billion annual total of giving for 2010 reflects actual support provided by individuals, foundations, and corporate sources. It is, in our estimation, a positive sign that non-profits in the U.S. may, hopefully be experiencing a critical turn around after two years of declines in donor dollars and uneven consumer confidence.

The report reflects significant increases for international causes, prompted specifically by Haitian relief, which caused catastrophic damage to the island nation. The report also reflected the transfer of significant dollars into donor advised funds and a very substantial increase from bequests where dollars ultimately moved from estates to non-profits – a welcome rebound from the previous two years.

While the Giving USA report – considered the annual “bible” of charitable giving and national trends in philanthropy – does not single out Jewish philanthropy or highlight Jewish donors, the messages are consistent across ten sectors of the non-profit community and should be seen as a barometer of how donors are thinking across the spectrum and where they are placing their financial support.

The figures tell us that in 2010, American donors were more generous than they were in 2009. The increase is also welcome considering that giving across the country decreased by 13% during the Great Recession of 2008 and 2009.

A set of changes in methodology for Giving USA (GUSA) resulted in the restatement and reissuance of total giving statistics for 2008 and 2009. The explanation for the updated information considered a number of factors, primarily recalculations at the IRS which impacted on results. Additionally, charities filing their returns late created a lag in data being reported. Subsequently, the IRS adjusted the figures to present a more accurate picture for those years reflected the decreases.

Although we are witnessing positive trends in philanthropy, we must also remind our loyal readers that charitable giving has historically been a lagging indicator when the U.S. economy is moving up or down. It can sometimes take up to two years for giving to catch up to changes in the economy. Traditionally, home purchases, decreases in unemployment and growth of the stock market are among the indicators that precede upturns in charitable giving.

GUSA identifies charitable giving in ten distinct subsectors. They include education, foundations, human services, health, public society, arts/culture/humanities, international affairs, environment/animals, individual grants and religion. We note that 35% of all giving was attributed for religious causes, and the percentage of dollars stayed unusually flat as compared with previous years.

Naturally, most people will comb through the report to determine who were the big winners and big losers in 2010. For the most part, many of the subsectors showed no significant changes from 2009. $6.6 billion went to causes for the environment and animals, reflecting a very slight percentage increase. Health, hospitals and diseases saw $22.83 billion, which is an increase of 1.3%. The human services sector is estimated at $26.49 billion; also a nominal increase from the previous year but that number may be misleading because $1.43 billion of that money was directed exclusively to the Haiti disaster relief effort, though part of Haiti relief was also attributed to the “international” sector.

The big upswings in giving occurred in various other subsectors. International affairs reached $15.77 billion, an increase of 15.3% from the previous year. Increases also were present in education (5.2 %), public society benefit (6.2 %) and arts and cultural organizations (5.7%).

One of the most intriguing categories, for our purposes, is “religion.” Although the increase from the previous year was nominal, it is equally important to note that it remains steady at 35% of all giving in the U.S., amounting to $100.65 billion. Historically, giving to religion has increased significantly during bad economic times and the results for 2008-2010 seem to reflect a different trend. Our analysis indicates that houses of worship are now confronting increased and more sophisticated competition from other non-profits, and their professionals (clergy and others) are not as comfortable with presenting “the case” to potential donors. Additionally, where research and preparation has been the hallmark of successful giving programs, the levels of research conducted by houses of worship about their constituents is lagging far behind that of other non- profits. We note that the number of synagogues that have invested in dedicated development professionals is rapidly increasing, especially for mid-sized and large Reform congregations. Positive results are emerging where increased fundraising professionalism is being mandated.

While Jewish-attributed giving is subsumed within the total scope of activity in 2010, we note that some of the country’s largest donors are Jews and some of their passions impact the Jewish community and Jewish organizations that span the nation and the globe. Furthermore, the GUSA report does not highlight various Jewish organizations that relate to education, culture and Jewish federations or other traditional umbrella campaigns.

A few points that we can learn from the GUSA report:

1. Americans care deeply about charity and philanthropy remains a priority for them despite a difficult economy;
2. Although giving to religion remains constant as a charitable priority, there is significant movement among other non-profits and how donors are responding;
3. Donor advised funds experienced marked increases in 2010. This reflects a trend by people of moderate wealth who are planning ahead for future charitable gifts and are taking advantage today of using appreciated securities, certain tax incentives that may vanish, and other considerations to enhance their giving options;
4. After several years of registering declines, non-profits saw larger sums coming from bequests in 2010. The message to non-profits is a loud one … implement planned giving programs to attract these dollars!

An executive summary of the Giving USA report is available at gusa.org. The full report for $75 will also be available on-line. A must read and an often-referred to reference!

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.

Here’s more on Giving USA 2011 on eJewish Philanthropy.