Total philanthropic giving in 2011 was $298.42 billion, up from a revised estimate of $286.91 billion for 2010.
While the uptick of 4.0 percent in giving in current dollars is positive news, it represents an increase of just 0.9 percent in inflation-adjusted dollars. At this rate of growth, it will take more than a decade for giving to return to its pre-recession 2007 level, according to Patrick M. Rooney, Ph.D., Executive Director of the Center on Philanthropy. Rooney was in Philadelphia to present the major findings of the report. Rooney stated:
The estimates for giving in 2011 are encouraging, but they demonstrate that charities still face ongoing challenges. In the past two years, charitable giving has experienced its second slowest recovery following any recession since 1971.”
Giving in 2012 and 2013 is likely to experience the same slow growth as we saw in 2011. On the same day that Rooney was in Philadelphia, the U.S. Federal Reserve issued its multi-year forecast of change in Gross Domestic Product. The Fed projects GDP will continue to grow at a modest rate. For 2012, the projected GDP growth rate is 2.2 percent. For 2013, the Fed projects GDP growth of 2.5 percent. This is important news for all Americans, particularly those in the nonprofit sector.
In 2011, giving was 2 percent of GDP. Since giving has been tracked, philanthropy has always been about 2 percent of GDP. If this correlation rate continues, the nonprofit sector can expect continued slow growth in philanthropy in 2012 and 2013 as GDP is projected to grow only modestly.
Once again, the majority of philanthropic dollars came from Individuals, who accounted for 73 percent of total giving, the same percentage as the prior year. If Bequest and Family Foundation giving is included, the percentage would be 88 percent.
Individual giving as a percentage of disposable personal income remained at 1.9 percent in 2011, the same as in 2009 and 2010; this is far below the high of 2.4 percent achieved in 2005.
The report estimates estate giving at $24.41 billion in 2011, a 12.2 percent increase over 2010 (8.8 percent increase in inflation-adjusted dollars). Bequest giving represented 8 percent of total giving. Two-thirds of Americans with a will have included a charitable bequest provision, according to Robert I. Evans, Founder and Managing Director of EHL Consulting Group, who co-presented with Rooney. Fluctuations in bequest giving in recent years are primarily due to the major changes in real estate and stock portfolio values. Rooney also observed that the 300 wealthiest deceased individuals determine whether bequest giving goes up or down.
Private, community and operating foundations increased giving by only 1.8 percent in 2011 to $41.67 billion. This represents a decline of 1.3 percent in inflation-adjusted dollars. Giving by foundations represented 14 percent of total giving.
Corporations and their foundations are estimated to have given $14.55 billion in 2011, a 0.1 percent decline in current dollars, or a 3.1 percent decline in inflation-adjusted dollars. Corporate giving represented 5 percent of total giving.
For Rooney, the report contains two significant surprises:
1. Giving to Religion. When looking at the type of nonprofit organizations receiving donations, Religion continues to be the greatest category, accounting for 32 percent of giving ($95.88 billion). However, giving to religious organizations has declined for the second year in a row. Adjusted for inflation, giving to religious organizations is estimated to have declined by 4.7 percent.
Two decades ago, Rooney says that giving to Religion averaged 50 to 55 percent of all charitable giving.
According to the joint press release from The Giving USA Foundation and the Center on Philanthropy, “Several factors may have affected the second straight year of estimated decreases in donations to religious organizations. These include: declines in church membership and attendance, particularly among mainline Protestant denominations and a changing economic environment that affected the amounts Americans felt they could give.”
Evans observed, “People of faith are the best donors [to all types of nonprofit organizations]…With the decline in attendance and participation, we have a real challenge.” In other words, declining religious affiliation has implications not just for religious institutions, but all nonprofit organizations.
2. Giving to International Affairs. International Affairs organizations saw the greatest rate of philanthropic growth, 7.6 percent in current dollars and 4.4 percent in inflation-adjusted dollars. Giving to this subsector now accounts for 8 percent of all giving ($22.68 billion). In 1987, giving in this subcategory accounted for just 2 percent of all giving.
“This likely reflects the fact that the number of charities working in International Affairs has expanded enormously during roughly the same period. Additionally, as more people become aware of international needs through expanding technology, more US donors are choosing to support causes beyond their local and national communities,” says Una Osili, Director of Research for the Center on Philanthropy.
Rooney and Evans also observed that giving in the International Affairs category began its strong growth immediately after the attacks on the USA in 2001. Well publicized international disasters have also attracted support and raised general awareness for international causes. Likewise, international giving by large foundations including The Gates Foundation have received a great deal of publicity which may have also inspired the giving of others.
To learn more about giving in 2011, you can register and download the free official Giving USA 2012 Executive Summary or purchase the full report at the Giving USA Reports website. However, be warned, the website has been experiencing some problems, so patience might be required.
You can also read my related blog post: “Special Report–Indiana University Creating School of Philanthropy.”
That’s what Michael Rosen says… What do you say?