Posts tagged ‘Giving USA’

June 19, 2013

What You Really Need to Know about Giving USA 2013

Philanthropic giving in the USA increased for the third straight year in 2012, but only modestly.

Overall giving in 2012 totaled $316.23 billion, an increase in current dollars of 3.5 percent over 2011. Adjusted for inflation, the increase is just 1.5 percent. That’s the finding presented in Giving USA 2013, the report researched and written by the Indiana University Lilly Family School of Philanthropy and just released by the Giving USA Foundation™.

Click the photo to get a free copy of Giving USA Highlights.

Click the photo to get a free copy of Giving USA Highlights.

I had a chance to sit down and talk with Dr. Patrick M. Rooney, Associate Dean for Academic Affairs and Research at the Lilly Family School of Philanthropy. He asserts that, at current growth rates, it would take at least six years for a return to pre-recession giving when adjusted for inflation. He anticipates growth will indeed continue to be slow since the overall economic recovery is slow.

For more than half-a-century, giving has hovered at two percent of Gross Domestic Product. When GDP grows strongly, giving is robust. When GDP growth is sluggish, so is philanthropy. With many economists predicting 2013 GDP growth of just 1.9 percent, Rooney’s prediction seems entirely reasonable.

Here are some highlights from the report:

–2012 saw marked year-over-year growth in corporate giving (12.2 percent in current dollars), which is strongly linked to companies’ profits. For 2012, corporate pre-tax profits surged upward 16.6 percent, according to the Bureau of Economic Analysis.

–Uncertainty fueled by mixed economic indicators may have moderated giving by individuals, who historically account for the largest percentage of total giving. Positive trends, such as the 13.4 percent increase in the Standard and Poor’s 500 Index between 2011 and 2012, the slight rise in home values, and overall lower unemployment rates and fuel costs, were combined with budget concerns and tax reform discussions. In addition, personal disposable income rose 3.3 percent and personal consumption expenditures rose 3.6 percent last year, virtually mirroring the growth in individual giving (3.9 percent in current dollars).

–Giving by individuals rose to $228.93 billion in 2012, an estimated 3.9 percent increase (1.9 percent adjusted for inflation). Income and wealth are key drivers of household giving, as is a sense of financial security. Giving by taxpayers who itemize their gifts represented 81 percent of the total donated by individuals in 2012.

–Giving by bequest decreased an estimated 7.0 percent in 2012 (8.9 percent adjusted for inflation) to $23.41 billion. Itemizing estates contributed 78 percent of the total, or $18.31 billion. Bequest giving tends to be volatile from year to year, as it is highly influenced by very large gifts from estates that closed during that year. For example, Rooney explains that if we remove one exceptionally large bequest from the 2011 numbers, we find that bequest giving was close to the same in 2012 and 2011 when adjusted for inflation. So, the big dip in 2012 should not set off alarm bells. With real estate values and stock portfolios rebounding, the future for bequest giving is encouraging.

–Giving by corporations rose 12.2 percent in 2012 (9.9 percent adjusted for inflation), to an estimated $18.15 billion, including gifts from both corporations and their foundations. The two entities provide cash, in-kind donations and grants. Increasing the 2012 total was the estimated $131 million corporations gave to nonprofits working on relief efforts in the aftermath of Hurricane Sandy.

–Giving by foundations increased 4.4 percent (2.3 percent adjusted for inflation) to an estimated $45.74 billion in 2012, according to figures provided by the Foundation Center. Giving by community foundations grew 9.1 percent last year, which helped to bolster the total. Operating and independent foundations increased grant making by 3.5 percent and 3.9 percent, respectively. While stock values increased in 2012, foundations often use a multi-year rolling average when valuing their portfolios. Therefore, as stock values continue to climb, we should see stronger future growth in foundation giving.

–Looking at foundation giving, 45 percent comes from family foundations where a member of the family continues to be actively involved in running the foundation. In a sense, these organizations blur the line between foundation and individual giving. Giving by family foundations can often be very relationship driven as with individual giving.

While the data provides a number of interesting insights about the charitable behavior of Americans, it also hints at serious warnings, according to a panel of experts that gathered in Philadelphia to present the Giving USA findings. The panelists included Jon Biedermann, Vice President of DonorPerfect; Robert Evans, Founder and Managing Director of The EHL Consulting Group; Eileen R. Heisman, ACFRE, President and CEO of the National Philanthropic Trust; and Rooney. Here are their warnings:

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August 29, 2012

Special Report: Ooops! Giving USA Identifies Its Mistake

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The people who bring us Giving USA have announced that the latest edition of the report contains a clerical error.

In life, when one makes a mistake, it’s generally a good idea to admit it and, when possible, fix it. It’s impossible to be perfect. So, what separates the good guys from the bad guys is not who can achieve perfection. Instead, the good guys are defined by how effectively and honestly they deal with problems when they are identified.

I congratulate Giving USA for promptly correcting its error.

Here is the text of the email from Giving USA that explains the situation:

 

Dear Valued Giving USA Customer,

The Center on Philanthropy at Indiana University and Giving USA are committed to providing the most up-to-date data on charitable giving possible-and to doing so with transparency, accuracy, and accessibility.

It is for this reason that we are notifying you that the Center on Philanthropy has updated the Giving USA bequest and total giving data for the years 1998-2009 that were originally reported in Giving USA 2012, released in June of this year. The changes are necessary because an error in the bequest giving data for those years has come to our attention.

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August 3, 2012

New Economic Data Suggest Continued Fundraising Challenges. What Can You Do?

Based on the latest economic data, nonprofit organizations in the USA should not expect significant growth in philanthropy through at least 2013. Fortunately, there are at least 10 things you can do to help your nonprofit weather the storm.

Historically, philanthropy in the USA has been approximately two percent of Gross Domestic Product. While this is not necessarily a cause-and-effect relationship, the correlation is consistent. Therefore, with slow economic growth, we will likely see slow philanthropic growth.

In 2011, the US experienced an annual GDP growth rate of 1.8 percent. That same year, overall giving rose by 4.0 percent in current dollars or 0.9 percent in inflation adjusted dollars, according to Giving USA 2012.

In the first quarter of 2012, the US economy grew at a rate of 2.0 percent. In the second quarter of 2012, US economic growth slowed to just 1.5 percent. Most economists agree that a growth rate of 2.0 percent or less is insufficient to lower the unemployment rate, now at 8.2 percent. Looking ahead to 2013, the Federal Reserve forecasts a growth rate of 2.5 percent, still modest.

For the nonprofit sector, the GDP numbers mean the sector can expect philanthropy to grow in 2012 at a similar rate to 2011. Growth in 2013 will likely not be much better.

Despite my lack luster predictions for the nonprofit sector, I do believe there are at least 10 things that individual organizations can do to stimulate increased giving. If you implement just some of these ideas, your organization will likely achieve above average fundraising results:

1. Hug your donors. Ok, maybe not literally. But, you do need to let your donors know you love and appreciate them, now more than ever. Do you quickly acknowledge gifts? You should do so within 48 hours. Do you effectively thank donors? You should do so in at least seven different ways. Your thank you letters should be reviewed to ensure they are heartfelt, meaningful, and effective. Have board members call donors to thank them.

2. Tell donors about the impact of their gift. Donors want to know that their giving is making a difference. If their giving isn’t making a difference or they aren’t sure, they’re more likely to give elsewhere. So, report to your donors. Tell them what their giving is achieving and that their support is being used efficiently.

3. Start a new recognition program. One small nonprofit organization I know has started a new, special corporate giving club. CEOs of the corporate members are placed on an advisory board, receive special recognition, and are provided with networking opportunities. This new recognition program has already generated over $50,000 and is expected to generate far more. While enhancing existing recognition efforts is beneficial, starting a new recognition program can yield significant results.

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June 22, 2012

Giving USA 2012 Released, Donations Up Slightly

Total philanthropic giving in 2011 was $298.42 billion, up from a revised estimate of $286.91 billion for 2010.

That’s the finding presented in Giving USA 2012, the report just released by The Giving USA Foundation and its research partner, the Indiana University Center on Philanthropy.

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.

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