Giving USA: Giving to All Sectors Up;
Charities Remain Optimistic About 2008

Jennifer, Executive Vice President
Midwest Division

Editor’s Note: Data for this article was provided by the Giving Institute and the Giving USA Foundation. Jennifer Furla was recently named to the Board of the Giving USA Foundation.

While the headlines for the just-released Giving USA 2008 reported gifts to charities topping $306 billion last year (the highest level of giving ever, and the first time giving exceeded $300 billion), the “news” for recession-wary nonprofits is that giving rose 3.9 percent, despite worries about gas prices, the mortgage crisis and the housing market, and that giving rose across-the-board to all public-charity sectors.

The report, which was issued June 23 by the Giving USA FoundationTM, tracked charitable giving in the United States in 2007. Now in its 53rd year, the report is researched by the Center on Philanthropy at Indiana University. Established by the Giving Institute: Leading Consultants to Non-Profits, the Giving USA FoundationTM endeavors to advance research and education in philanthropy.

Giving in Perspective
Giving continues to represent a steady 2.1 percent of the GDP, and growth in giving over the prior year outpaced benchmarks from comparable recession years dating back to 1967. In non-recession years during that 40-year period, giving grew about 4.3 percent per year, so this year’s growth over 2006 is a bit slow. But looking at recession years, the giving exceeded comparable benchmark years where giving had actually declined by 1 percent on average during a recession.

And the $306 billion represents giving equal to $1,000 per every man, woman, and child in the United States.

Of note was the finding that every type of public charity saw gains in donations in 2007, including arts/culture/humanities; education; environment/animals; health; human services; public-society benefit; international affairs; and religion. This is the first time since 2001 that giving was up for every sector.

Impact of National Events
While major charities reported concerns about the economy and the stock market for 2008, their concerns do not extend to the presidential elections. Organizations remain optimistic that they can increase fundraising through attention to their fundraising plans.

This year’s Giving USA 2008 report included results from a survey of 366 charities about their fundraising practices and the impact they believe national events had on giving in 2007 and will have in 2008. The survey concentrated on charities in the public-society benefit sub-sector. These include combined purpose funds that reallocate gifts to other charitable recipients (such as United Ways, religious campaigns and the Combined Federal Campaign), community and economic development organizations, research institutes, and organizations registering voters or working on civil rights issues.

“Charities we surveyed have concerns about 2008 for the economy and the stock market and the impact they will have on giving, but not about the presidential election,” said Ms. Del Martin, chair of the Giving USA FoundationTM. “This year’s Giving USA survey showed that a clear majority of charities in the public-society benefit arena are not worried about the impact the presidential campaign will have on their fundraising.”

Presidential campaigns raised $580.4 million in 2007, according to the Federal Election Commission, or less than one-quarter of one percent of the $306 billion given to charity.

Growth Attributed
The 3.9 percent increase in 2007 is attributable largely to stock market performance in the first half of the year, overall growth in the economy measured by gross domestic product, and increases in corporate and personal income as reported at the end of the year.

The strongest growth was reported by foundation grantmaking, which rose 10.3 percent. Charitable bequests also rose, increasing 6.9 percent to $23.15 billion (4.0 percent adjusted for inflation).

Individual giving – the mainstay of fundraising and giving – reached $229.03 billion, or 74.8 percent of total giving in 2007, an increase of 2.7 percent over the prior year.

When you combine gifts from individuals left through their wills, that percentage goes up to 82.4 percent. Add family foundations, and the total rises to an astounding 88 percent of all charitable giving in the United States being generated from individuals, their wills and their foundations.

A good percentage of individual giving goes to religion, which, in 2007, topped $100 billion, and continues to make up the largest share of giving to any sector. While religion’s piece of the total giving pie has decreased over the years (from a high of about 50 percent to 33.4 percent in 2007), giving to religion has experienced steady increases year over year since the report was first published.

What this shows is that overall giving has increased and that donors have broadened their focus to give to organizations beyond their church, synagogue or favorite religious cause. Still, when you match the giving-by-recipient charts to household giving, they closely mirror each other. Households typically give to religion first (33.4 percent of the pie in 2007), followed by education (14.1 percent of the pie), and human services (9.7 percent of the pie).

When you take corporate and foundation giving out of the equation (since some place restrictions on giving to religion), giving to religion still makes up about 50 percent of all individual giving. A separate panel study by the Center on Philanthropy supports this by showing that households, on average, give about $2,000 per year to charity, with half that amount going to religion.

What’s interesting to note is how the giving is distributed among wealth sectors. While a Bank of America wealth study by the Center on Philanthropy (and not part of Giving USA), indicated a large share of individual giving as coming from the 3 percent of households that report $200,000 or more in annual income, the 10 percent of all tax filers in the United State with incomes of $100,000 or more accounted for 51 percent of all individual giving in 2007. The 90 percent of tax filers with incomes less than $100,000 account for 49 percent of total individual giving. As these donors make up more than $149 billion given to charity last year, it’s clearly not just the wealthy who deserve attention in your annual giving and special campaigns planning. This does not include amounts from those who do not itemize, or underreport due to caps placed on charitable giving as a result of the Alternative Minimum Tax (AMT) rules, or other reasons.

Foundation Giving
In recent years, foundations have received the third-highest share of donations. For 2007, giving to foundations was $27.73 billion, based on data compiled in conjunction with Giving USA 2008 and the Foundation Center. For 2007, giving to foundations decreased 9.4 percent, placing it in the fourth-largest category, after human services.

The story behind foundation giving, however, extends beyond the one-year decrease for 2007. In the 10 years since 1997, the number of foundations in the United States has grown by 66 percent from 55,000 independent, community and operating foundations to more than 70,000 in 2007.

During that same time, giving by foundations increased 114 percent, the fastest rate of growth from any source of giving over last 40 years. According to Foundation Center reports over the last five years, about half of foundation giving is from family foundations, many of which are controlled by living donors.

Finally, in looking at foundation giving, nonprofits should be aware that the 2007 numbers do not include very large gifts to foundations that were announced last year, but were not realized. These included the intent to give of Barron Hilton, who said $1 billion or more of his eventual estate will go to the Conrad Hilton Foundation, or announcements that the estates of Helen Walton and Leona Helmsley would be distributed, at least in part, to foundations. Those transfers, likewise, did not occur in 2007, and are not included in last year’s Giving USA estimates.