Charitable Giving Increased by 4% in 2011 – Giving to Religion Still Tops
The Giving USA 2012: The Annual Report on Philanthropy for the Year 2011 has been released revealing the state of charitable giving in the United States. For many organizations, this information is crucial. It can offer non-profits either affirmation and confidence or the necessity to buckle down while reconnecting with individual donors, corporate givers, foundations and the like. While non-profits feel the real-time effects of their specific portion of the giving market, the overall numbers offer an opportunity to gauge a non-profit’s standing in relation to peers. In this year’s report, the metrics garner mild enthusiasm for overall charitable giving within the US but are paired with some concerning trends.
With the slow growth of the US economy we might have expected to see a decrease in giving. However, charitable giving has actually increased from 2010 to 2011 by about 4% (with 1.8% representing an increase in foundation giving). Although the increase factored with inflation reflects a smaller .09% increase, it is still a cause for relief as it reflects not only the commitment to philanthropy in America but also moderate growth. As giving stayed relatively flat, we saw changes in giving strategies, some of which generated considerable angst.
A positive trend we are seeing is in the diversity of areas charitable funds are given. During the economic crisis, many organizations saw not only a decrease in philanthropic giving but also a concentration on organizations which were meeting immediate needs of individuals. While this concentration was necessary due to the increased needs of programs providing for immediate needs, this concentration of funding practically starved out organizations focused on areas like media, art, and education to name a few. As the economy begins to recover we are seeing an increase in giving to these fields offering organizations in these areas an opportunity to regain their footing. These are areas that will continue to increase as we see the economy regain stability.
The other increase we have seen is the increase in international giving. Since the early 1970’s when international NGOs broke out into its own category, we have continuously seen giving grow in this area. While this area still accounts for a modest amount of the total charitable giving (about 8%), it is one of the fields in which we have seen the largest increase in giving. From 2010 to 2011, international giving saw an increase of more than 7%. As the world becomes increasingly connected, philanthropist become more aware of the needs outside the US and this will likely be an area that we continue to see exponential growth in the amount of giving.
One of the most concerning changes was to whom charitable contributions were made. Although religious organizations still garnered the largest percentage of charitable funding (32% of charitable giving), giving to these organizations represents a decrease from 2010 to 2011 by 1.7% which equates to a 4.7% decline when calculated with inflation. Many speculate this is directly tied to the decrease in church attendance which links to lower tithes and offerings. Because this is the second consecutive year of decrease in giving to religion following stagnate growth in previous years, it ignites ministries with the urgent need to reconnect with their communities and to diversity their funding streams.
Another area of concern is the move of large gifts by individuals through private and family foundations into giving through donor-advised funds. This is displayed by the 6.1% decrease in giving to foundations and an increase of 4% in giving to public-society (these include donor-advised funds). As you can read in our previous discussion of Accessing Donor-Advised Funds, this method of charitable giving is very appealing to donors because of their offer of heightened privacy and the immediate tax benefits (particularly important to people who create their yearly budgets based on information gained from inputting their data into a w-4 withholding calculator), but it can provide challenges to non-profits, both in acknowledging the giver appropriately and also in the organization’s ability to initiate relationships with like-minded givers. This is a trend we will likely continue to see as the benefits to donors increase.
In this year’s report on giving in 2011, we come away with a good news/ bad news awareness. The good news is we are beginning to see positive increases in philanthropy rejuvenating hope in charitable giving. However, the bad news is what worked to build funding relationships in years past is shifting, and without proper attention to these changes, we may see some ministries becoming extinct. It is crucial to be mindful of the changing philanthropic arena and ensure that your ministry is adapting to the needs of today’s givers.