Do Not Fall for Newsweek’s Fake News!

You might have seen it recently. Sophie Penney, PhD, President of i5 Fundraising, saw it and then asked me what I thought. So, thank you for the question, Sophie; here goes…

Newsweek posted an article with this headline: “Trump Tax Plan Leads to $54 Billion Decline in Charitable Giving.”

There’s only one problem: IT IS NOT TRUE!

Shockingly, not even the body of the article supports the headline. Instead, the writer talks briefly about a $54 billion drop in itemized donations NOT a $54 billion drop in giving. This does NOT mean there was a $54 billion drop in actual giving. With fewer people itemizing their taxes, of course there would be fewer itemized donations. However, that does not mean fewer donations. Many donors will continue to give and continue to give generously despite not being able to itemize. By the way, the writer provided no source for the $54 billion figure.

The article furthers its doom-and-gloom theme by asserting that there was a 1.7 percent decline in overall charitable giving. However, the writer did not mention that that figure was for inflation-adjusted dollars. In real dollars, giving actually went up $2.97 billion (0.7 percent) between 2017 and 2018, and now stands at $427.71 billion, the highest level of all time, according to Giving USA 2019. Even if we look at inflation-adjusted dollars, giving in 2018 was the second highest in recorded history. Not bad.

If we want to understand the current philanthropy environment, we need to have an honest conversation using real information. In a previous post, I identified several factors affecting charitable giving:

  • New Tax Code
  • Decline in the Number of Donors Over the Years
  • Decline in Religious Affiliation
  • Rising Popularity of Socialism
  • Declining Trust in the Nonprofit Sector
  • Consumerism

You can read my analysis by clicking here.

I don’t normally personalize my criticism of reporters and editors, or question their motives, but I’ll make an exception for Newsweek. The piece was obviously written by a reporter, and reviewed by an editor, who are ignorant. lazy, or politically biased, most likely all three. It is misleading, at best. As a former newspaper editor, I’m appalled that the Newsweek piece was published in its present form. Quite simply, it’s fake news (though a more colorful word also comes to mind).

Enough with the click-bait nonsense! If we want to grow philanthropy, the nonprofit sector needs to have intelligent conversations based on legitimate data. And two important facts to keep in mind are that individual giving continues to hover around two percent of personal income while overall giving hovers around two percent of Gross Domestic Product, as it has historically.

That’s what Michael Rosen says… What do you say?

 

Update (July 13, 2019): While a report on MarketWatch was slightly more accurate than the Newsweek post, it was still misleading. For electronic publications, it’s all about getting readers to click through. So, many such publications resort to so-called “click-bait.” Unfortunately, that means they’re sometimes (perhaps often) willing to stretch the truth or misstate a situation in order to get folks to click through to a story. In this environment, journalistic ethics can take a backseat to e-commerce.

Update (July 31, 2019): Today, The Giving Institute released minor revisions to Giving USA 2019. Among other things, the corrected data confirms giving by Individuals totaled $292.09 billion, accounting for 1.9 percent of disposable personal income. Overall giving was $427.71 billion, accounting for 2.1 percent of GDP. The Giving Institute is making free updates available for people who downloaded the original report and materials.

17 Responses to “Do Not Fall for Newsweek’s Fake News!”

  1. Amen. And Amen Michael. This is a “Chicken Little” type of headline posted to get people to read what should be a nonstarter headline. Just yesterday had a church member who is a trustee of our church’s foundation send me a link to same headline/article. I reminded him, just like you, that decrease in deductions is far different than the decrease in charitable giving. I did point out that the decrease in “giving to religion” should be more concerning to our foundation/church than the headline.

    • Keith, thank you for your kind message. I’m glad you were able to explain things to your church member. I share your concern about the decline in giving to religious organizations. Furthermore, I’m concerned about the decline in religious affiliation which is driving the decline in giving to those organizations and, I suspect, the number of people giving to any charity.

  2. Thanks for calling out such poor journalistic standards Michael. Newsweek should be ashamed of itself. All of us should call out media when they fail to follow basic journalism ethics.

  3. Thanks for always calling out the truth, Michael. Agree this is sloppy, and the chicken littles on this topic are not helpful. People are generous, and giving makes people feel good. Our job is to facilitate this ‘feel good,’ and create a better world. Rather than focus on what’s beyond our control (e.g., the vicissitudes of changing laws, the economic outlook, etc.), our job is to walk the talk of “philanthropy” — aka “love of humankind.” The reality is giving as a percentage of GDP in the U.S. has hovered at 2% for as long as I believe we’ve been keeping track, and last year it was slightly above that. The cup may not be overflowing, but it’s at least half full. We’re best if we focus on using fundraising fundamentals, together with emerging strategies, to keep it that way.

  4. Michael, Thanks so much for the shout out and for the thoughtful analysis. I am all for being sure we focus on the issues which relate to giving but the right issues many of which you mention. In addition to your list, there are huge generational shifts taking place (see charts from Classy.org very revealing!).
    I’m also personally convinced that many people see themselves as givers even if their contribution won’t be tracked or counted. If I give to a FB campaign is it tracked and counted? If I put cash in a basket at a church it will not be counted in Giving USA. I might give money to a relative (by the way from what I’ve read this is often the first form of giving in different ethnic and racial communities, I know it was in my eastern European family).
    Your point about growing giving is apt. FYI there’s a book you may not be aware of The Adventures of PhilAnThropy, which is designed to teach children around age 10 or 11 about giving, it’s a great piece!

  5. Thanks for a sensible response to shoddy reporting. You might consider citing Giving USA here as you do in the linked blog post with your analysis.

  6. Well said, Michael — talk about Fake News…. I would really have expected better reporting by Newsweek. I am putting this on my LinkedIn feed!

    • Hillel, thank you for your comment and for sharing my post with others. Sadly, Newsweek is a sad shadow of its former self. Unfortunately, MarketWatch also blew on this story. A lot of the problem has to do with “click-bait.” Sigh.

  7. Newsweek has been deteriorating for years, I am not surprised by the shoddy journalism (is it even really journalism?1?) but glad it prompted you to share the facts about what many of us have experienced but not been able to articulate as clearly as you do here. As always your considered opinion and fact-based analysis is both helpful and much appreciated.

    • Karen, thank you for your thoughtful message. I appreciate it. You’re spot on about Newsweek. In college, way back when, I had a subscription and read the magazine every week. The only thing that remains the same is its name.

  8. Bravo for your analysis. I agree with all of the posters here. Keep up the fine work!

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