Charitable Giving Reaches an All-Time High!

By Robert Evans

Charitable giving to religious organizations has rebounded from the lean years of the Great Recession – and then some. In fact, philanthropy has reached an all-time high, both in real dollars and inflation-adjusted dollars.

Giving USA’s annual survey reports that contributions to houses of worship reached $114.90 billion, or 32 percent of all giving. (Faith-based social service organizations are not included in this figure.) Granted, that is well below the 56 percent mark reached in the late 1980s, but religious organizations still receive the largest slice of the philanthropic pie.

Giving USA, considered the most respected annual study of American philanthropy, is a joint-project of the Chicago-based Giving Institute and Indiana University’s Lilly School of Philanthropy. The 60th annual report, which covers 2014, published its research today.

While the report doesn’t break out giving by religious communities, there is much that the Jewish world can glean from this in-depth statistical analysis of charitable activity. Donors have gotten over the Great Recession and are supporting charities at record levels. That is surely an encouraging sign for all Jewish organizations, but it doesn’t negate the litany of challenges confronting Jewish life today.

Here’s a closer look at the Giving USA numbers: In 2014, total charitable contributions amounted to a whopping $358.35 billion. Giving to religious organizations increased by 2.5 percent from 2013 and experienced a healthy two-year jump of 8.6 percent. Over the same period, overall giving experienced a 7.1 percent increase over 2013 and a two-year climb of 8.8 percent. Simply put, 2014 was a banner year for American giving and virtually all nonprofit subsectors saw moderate to substantial increases in donations from individuals of all social and economic backgrounds.

A word of caution: researchers at Giving USA stress that all of their figures are estimates and they routinely revise their estimates as more data becomes available. Last year, Giving USA had reported that giving to religion was flat between 2012 and 2013, actually declining by .2 percent – a quite different story from the one being told now. Giving USA estimates are developed before final tax data, some economic indicators, and some demographic data are available. Researchers revised the .2 percent decline to a 6 percent increase. The takeaway: last year’s report failed to capture the extent of the recovery enjoyed by religious institutions. On the flip side, I hope this year’s gains won’t be tempered by statistical reassessments.

Here are some additional statistics and observations from the report especially relevant to Jewish donors and communal leaders:

• Contributions to the human services subsector grew 3.2 percent from 2013, totaling $42.10 billion and comprising 12 percent of all charitable giving in 2014. This is a notable uptick.
• Contributions to the public-society benefit subsector increased 5.1 percent from 2013, totaling $26.29 billion and comprised 7 percent of all charitable giving in 2014. This sector includes Jewish federations, United Way, which has been struggling, branches as well as many donor advised funds, the game-changing and innovator philanthropic vehicle.
• The only nonprofit subsector that saw an overall decrease in 2014 was international affairs. That sector saw its contributions decline by 2.0 percent, totaling $15.10 billion and accounting for 4 percent of all giving.

With the exception of the stats on international giving – which surely won’t thrill fundraisers for Israel-based organizations – nearly all the news contained in the Giving USA report is positive. The recovery is surely being experienced by many Jewish organizations. For example, in 2008-2010, major synagogue fundraising projects seemed all but nonexistent: today they are coming back and many exciting renovation and new construction projects are underway.

We do know that while the economic recovery has been more uneven than past downturns, donors are once again ready and willing to support causes that inspire them. Charitable contributions as a percentage of GDP have remained steady at around 2 percent for the last 40 years, but the overall volume of the sector continues to grow.

Jewish donors and communal leaders should be encouraged by the Giving USA report, but nobody should be doing cartwheels. From my perspective, donors are once again feeling secure enough in their finances to generously support causes that inspire them. The problem is, donors aren’t being inspired by Jewish causes nearly enough.

Despite the strong report from Giving USA, the Jewish community continues to face many systemic challenges that impact fundraising. It is no secret what they are: the majority of Jewish mega-donors, especially younger entrepreneurs/philanthropists are supporting non-Jewish causes. Jews supporting Jewish causes tend be older. The question of how to reach and engage younger donors has bedeviled organized Jewry for decades, but the problem is only becoming more acute.

There is a great deal of discussion about ways to rejuvenate both communal and models. But disruptive changes and truly innovative ideas require substantial amounts of resources to realize. As individual organizations and collectively, we must tell our stories, sell our vision, demonstrate our needs, and convince donors that we would make a wise, innovative, and sound investments. The American Jewish community is at an all-time and American philanthropists are as generous as they have ever been. Those are not guarantees for our success, but they are reasons for optimism.

Robert Evans, President of the Evans Consulting Group in suburban Philadelphia, sits on the Giving USA Editorial Review Board. Mr. Evans has more than 35 years of experience advising nonprofits on fundraising campaigns and strategic planning. A member of the Giving USA editorial review board and a board member of the Giving Institute, Mr. Evans is frequently quoted in media outlets such as The New York Times and is a regular contributor to eJewishPhilanthropy.com. He can be reached at revans@theevansconsultinggroup.com.