U.S. Giving Reaches New Highs; Unprecedented Increases
The strong report on giving reflects that total estimated giving was at its highest levels ever in both 2014 and 2015
By Robert I. Evans
Charitable giving by U.S. donors reached $373.25 billion in 2015, reflecting another 4.1% increase over 2014 levels, according to Giving USA, the longest running and most accurate report on philanthropy in America, as it released its 61st annual report today.
The strong report on giving reflects that total estimated giving was at its highest levels ever in both 2014 and 2015, with six of ten nonprofit categories reflecting their highest levels ever of support by 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. Lilly School representatives predicted, too, that “if total giving continues to grow at the current inflation-adjusted rate, averaging the last two years at 4.2%, it will take about just one more year or so for total giving to return to the levels realized in 2007.” The Great Recession was officially 2008 and 2009. Total giving for 2015 is $17.68 billion above the 2007 total.
Jewish nonprofits are not specifically identified in the Giving USA Report, although there are several highlights that relate specifically to Jewish entities:
1. Giving in the “Public Society Benefit” category, which historically includes giving to Jewish federations as well other “umbrella campaigns” like United Way, Catholic Charities, and the Combined Federal Campaign again reflected another 6.0% increase but this is camouflaged significantly because of very significant support of Donor-Advised Funds (DAFs). Giving USA highlighted that New York’s UJA-Federation campaign and Detroit’s Jewish Federation reported very large year-over-year increases. Overall giving to Jewish federations has declined over the past 25 years, showing that individual donations dropped 37.6% in inflation adjusted dollars between 1991 and 2015.
2. Individuals living and dead accounted for 80% of all giving, with about half of total giving coming from high-net-worth households. Last year, 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, where the majority of mega-donors were in the banking/finance, real estate or oil industries. Among the most generous Jewish donors were Michael Bloomberg ($510 million in donations); Stefan Edlis (who directed $400 million in art to Chicago’s Art Museum), and hedge funder John A. Paulson (who gave $400 million to his alma mater, Harvard University.)
3. Giving to religion – representing about one-third of all giving – is at its highest level, at $119.30 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 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.
Other reports also found that faith-based organizations realized the greatest year-over-year monthly increases in overall giving in the three-month periods ending in April (9.9%) and March (9.4%). Giving declined, however, in the three-month period ending in October (-3.5%).
4. Perhaps the largest increases in giving were attributed to two categories: arts and culture AND the environment and animals.
In the arts/culture area, David Geffen’s $100 million gift to Lincoln Center was highly publicized but it was only one of many large gifts to cultural institutions across the nation.
5. Giving to education – and especially to higher education – grew at the rate of 8.8%, making this category the third-fastest growing sector out of nine that Giving USA follows. Of special optimism to America’s Jewish day schools is the note that pre-collegiate independent schools – as a group – showed the most positive fundraising results – finally!
6. Giving to human services marked its second consecutive year of growth in 2015, making it the sixth-fastest growing subsector out of nine. Half of human services organizations engaged in capital or special campaigns in 2015 reported campaign goals of between $2 million and $18 million. Of special note: donors to this category were the most likely to make a gift online or via an app, representing almost 80% of all online gifts.
7. Giving to health organizations, including disease-focused agencies and hospitals, grew very slowly. Giving to this subsector is well below the five-year average rate of growth of 5.4%. Gifts to medical research dominated the category, especially those focused on finding a cure for cancer, pediatric illnesses, and heart disease. Researchers predicted several years ago a slower pace of giving to hospitals with the introduction of Obama care and this prediction seems to be correct.
8. One category that attracted very strong support in 2015 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 – the only such event was the April 2015 Nepal earthquake. Americans collectively gave $163.97 million.
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 organizations, including Google, Coca Cola, and the Carnegie Endowment for International Peace, shifted their programmatic foci toward global issues.
9. Giving to foundations declined in 2015, perhaps attributed to an 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 Reports note 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 stagnant at about 1.18 million agencies;
- Corporate giving remains a slow-paced component of giving and fell to 0.8% as a percentage of pre-tax profits, the lowest levels in 25 years;
- Individual giving as a percentage of disposable personal income rose to 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 2015;
- The number of volunteers remains at approximately 62.8 million people, down from an all-time high of levels seen in 2005.
A free copy of the executive summary of the report, called “GUSA Highlights,” is available on-line by going to www.GivingUSA.org and going to the “products” category. The full report is available for purchase at the same website.
Please join me as my team at Evans Consulting Group and I host a free webinar where I will analyze the results of this year’s report. The webinar will be held on June 22 at 2pm EST. For more information and to register for the webinar, please go here.
Robert Evans is founder and president of the Evans Consulting Group, a full-service firm that helps nonprofits meet and exceed their strategic and fundraising goals. Now in its 25th 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.