By Robert I. Evans
Charitable giving by U.S. donors reached $390.05 billion in 2016, reflecting another 2.7% increase over 2015’s extraordinary levels, according to Giving USA, the longest running and most accurate report on philanthropy in America, as it released its 62nd annual report today.
The strong report on giving reflects that total estimated giving was at its highest levels ever in both 2015 and 2016, with all ten nonprofit categories reflecting their highest levels ever of support from donors.
The research and writing for the report was done by faculty and staff at the Lilly Family School of Philanthropy at Indiana University. I continued in my role as a member of the editorial review board for the highly respected analysis. GUSA representatives observed, too, that “as total giving continues to grow at the current inflation-adjusted rate, we are witnessing philanthropy being equal to more than $1 billion per day.” Total giving for 2016 is approximately $7 billion above the adjusted 2015 total.
Jewish nonprofits are not specifically identified in the Giving USA Report, although there are several highlights that relate specifically to the Jewish community:
- One of the largest gifts included in the tally was a $400 million bequest from the estates of Harold and Lottie Marcus to American Associates, Ben Gurion University of the Negev;
- There is a “shout-out” to the Reconstructionist Rabbinical College in suburban Philadelphia that relates to innovative techniques the organization adopted in 2016;
- America’s most generous Jewish donor continues to be Michael Bloomberg, whose giving again surpassed $600 million but not all of his generosity was directed for Jewish organizations or projects.
Individuals living and dead accounted for 80% of all giving, with about half of total giving coming from high-net-worth households. Previously, Giving USA projected that the lion’s share of the largest donors were from the technology industry; many were young Silicon Valley tech professionals. This was not repeated in 2015 or 2016, where the majority of mega-donors were in the banking/finance, real estate or oil industries.
The definition of “mega donors” was downwardly adjusted in 2016 to $100 million or more. In the last report from GUSA, a mega gift had been defined at $300 million but there was a paucity of such large gifts in 2016 that a re-definition was required.
Other highlights include:
1. Giving to religion – representing about one-third of all giving – is at its highest level ever, at $122.46 billion. Unfortunately, gifts of $1.0 million and over as reflected on the Chronicle of Philanthropy’s reported listing are seldom announced and it is difficult to amass a correct listing of major gifts to U.S. synagogues. We note that there is a continuing surge in capital and endowment campaigns at America’s Jewish congregations after a few years of pauses, prompted primarily because of the Great Recession and a concomitant recovery.
Reports suggest that many religious congregations are finally seeking bequests, especially from Baby-Boomers. Estimates suggest that mid-sized and larger houses of worship are averaging one bequest per year.
2. Perhaps the largest increases in giving were again attributed to two categories: arts and culture AND the environment and animals.
3. Giving to education – and especially to higher education – grew at the rate of 3.6%, reflecting a slowing of support by major/mega donors. Giving to America’s Jewish day schools is included in this category but is not singled out for mention.
4. Giving to human services marked its fourth consecutive year of growth in 2016; increases amounted to a 4% increase. Donors in this category represent the largest number of contributors, even though human services agencies reflect total giving significantly below donations to religion.
5. Giving to health organizations, including disease-focused agencies and hospitals, grew significantly in 2016. Gifts to medical research dominated the category, especially those focused on finding a cure for cancer, pediatric illnesses, and heart disease.
6. One category that attracted very strong support again in 2016 is international giving: organizations working in international aid, development or relief; those that promote international peace and security. Some gifts made for international purposes are actually counted as gifts to education, health, human services or religion so that “American friends of Israel-based institutions” may have their support recorded in other categories.
Historically, international disaster relief is reflected in this category and – fortunately – again in 2016 there was no major disaster to impact giving.
Gifts by major foundations may also be linked in increases to giving in the international category. The Bill and Melinda Gates Foundation consistently makes massive annual gifts to this subsector; several international organizations, including Google and Coca Cola, once again directed major support for global issues.
7. Giving to foundations declined in 2016 again, perhaps attributed to an on-going increase in giving by America’s wealthiest donors to Donor Advised Funds. Gifts in this category tend to range considerably from year to year and are often very large and dependent on investments. But giving to DAFs is so significant over the last 25-year period that undoubtedly DAFs must be considered the most significant “new” tool donors have available.
The Giving USA Report notes several other trends that deserve careful attention:
- On-line giving was not specifically tracked by Giving USA, although it noted that #Giving Tuesday and other promotional efforts continue to attract support, primarily from donors making small gifts;
- The number of nonprofits (not including houses of worship) is up by more than 4% at about 1.2 million agencies;
- Corporate giving remains a slow-paced component of giving stabilized at 0.8% of pre-tax profits, the lowest levels in 25 years even though corporate pre-tax profits increased significantly;
- Individual giving as a percentage of disposable personal income stayed at 2.0%, reflecting that most Americans do not seem to be adopting tithing as a guideline for giving, although more than 60% of U.S. households claim having made charitable gifts in 2016;
- The number of volunteer hours continues a modest decline over several years, down from an all-time high of level seen in 2005.
A free copy of the executive summary of the report, called “GUSA Highlights,” is available on-line by visiting www.GivingUSA.org and going to the “products” category. The full report is available for purchase at the same website.
Robert Evans is founder and president of the Evans Consulting Group, a full-service firm that helps nonprofits address their strategic and fundraising goals. Now in its 26th year, Evans Consulting leads fundraising campaigns, facilitates strategic planning processes, engages in donor research and cultivation, coaches nonprofit leaders and performs a number of other development-related services. Mr. Evans is a member of the Giving USA editorial review board and is also a board member of the Giving Institute. He can be reached at email@example.com.