Philanthropy May be Imperative for the Future of Aging Services

A Giving USA report looks at the importance of philanthropy in the aging services sector

Aging Services Special Report Digital EditionBy 2060, it is estimated that the population of Americans over 65 will climb to 98.2 million – double the estimated population in 2015, according to the U.S. Census Bureau. But a new report from Giving USA Foundation questions how aging services organizations (ASO’s) will be able to fiscally bear that growth. A Giving USA Special Report, Giving and the Golden Years: The Role of Private Giving in Aging Services Organizations, available today in print or digital download, provides a first-of-its-kind benchmark of the national aging services landscape. This includes information on state-by-state coverage and how these critical organizations are supported financially. The Giving USA Foundation hopes the report will allow organizations focused on serving aging populations to look at their current financial support and long-term trends to make decisions on how to ensure future financial stability.

Aging services organizations — nonprofits dedicated to serving aging populations — range from food programs and housing to adult day care, in-home services and nursing facilities. The report found that only six percent of nonprofit organizations in the country that file tax returns with the IRS are focused on providing services to aging populations. That is especially surprising, given 24.5 percent of American households are headed by someone 65 or older.

“This is a surprisingly small number of organizations meant to serve a large and still growing population of Americans,” said Aggie Sweeney, CFRE, Giving USA Foundation Board Chair. “We’re hoping the findings of this report will motivate the public to add aging services organizations to their annual giving portfolios.”

Insights on ASO Revenue

Within this small aging services sector, the report revealed ASO’s vary widely on revenue size. Over half of all aging service organizations operate with an annual revenue at or under $500,000. The exception is nursing facilities and home health services, of which nearly 30 percent operate with annual revenue of $10 million or more. These differences in business models and mission also create two extremes in their reliance on charitable giving:

  • Organizations like food programs receive more than 82 percent of revenue through grants and contributions, including in-kind food donations.
  • Nursing facilities and home health services receive less than five percent of total revenue through grants and contributions.

“Both of these models present risks to the organization by relying heavily on a single type of income,” said Nathan Dietz, report co-author and Senior Research Associate with the Urban Institute’s Center on Nonprofits and Philanthropy. “Developing diversified sources of revenue is one way to invest in the future.”

The report showed that many ASO’s have great opportunity to utilize charitable giving as a way to grow or diversify revenue. The report cautions, however, that investing in philanthropy takes time.

“Fundraising is not a simple or short-term solution,” said Laura MacDonald, CFRE, report co-author and Giving USA Foundation board member. “Long-term investments must be made by an organization’s leadership, management and the community at large. With patience and diligence, a sound fundraising program should eventually return $3 to $5 for every $1 invested.”

Alarmingly, the report also found that only 10 percent of ASO’s have an endowment fund of any kind. These funds are an investment commonly used by nonprofits, such as universities and hospitals, to ensure funding for future programs, operations, and services. They are most often established by generous donors who recognize the imperative to sustain the nonprofit organization’s essential mission.

Coverage State-By-State

The report revealed a clear disparity in ASO coverage when looking state-by-state. States commonly thought of as “retirement states” like Florida, Arizona, Texas and the Carolinas scored in the bottom 25 percent in the number of ASO’s per 1,000 residents 65 and older. By contrast, Minnesota, Nebraska and the Dakotas scored in the top 25 percent.

Philanthropy in Older Generations

Another irony that was brought to light in the report is the prevalence of philanthropy in older generations. Americans born before 1964 make up the most generous generation in the country, accounting for nearly 70 percent of all charitable giving in the U.S. It’s likely that this generation will be the biggest philanthropic supporter of aging services they may come to rely on.

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The Giving USA Special Report, Giving and the Golden Years: The Role of Private Giving in Aging Services Organizations, can be purchased as a paperback book for just $29.95 or as a downloadable PDF for just $24.95 at www.GivingUSA.org. For additional information, register for our free webcast on Friday, March 3 at 11:30 a.m. ET, where a panel of philanthropy experts will discuss the special report’s findings and implications for aging services organizations.

About Giving USA Foundation

Advancing the research, education, and public understanding of philanthropy is the mission of the Giving USA Foundation, founded in 1985 by The Giving Institute. Headquartered in Chicago, the Foundation publishes data and trends about charitable giving through its seminal publication, Giving USA: The Annual Report on Philanthropy, and quarterly special reports on topics related to the field of philanthropy. Visit www.GivingUSA.org.


How Well Do Human Services Organizations Do at Fundraising, Compared to Other Charities?

HumanServicesSpotlightHuman Services organizations (HSOs)—food banks, homeless shelters, youth services, sports organizations, family and legal services—are the organizations that many people think of when they think about the nonprofit sector. In 2014, HSOs constituted the largest percentage of all public charities (35.5 percent), but they received 11.7 percent of all charitable contributions.

While some well-known HSOs are large and well-funded, the majority fly below the radar, delivering needed services in individual communities. However, like many other nonprofits, most HSOs have no idea how to find reliable data on fundraising that they can use to benchmark their performance. In other subsectors, such as healthcare and education, data and research on giving are relatively easy to find, but for HSOs there is no obvious analogue: most have little sense of how other organizations attract donations.

Until now, the nonprofit sector has lacked a national dataset that could be used to create fundraising benchmarks or to compare organizations across or within subsectors. In 2012, the Association of Fundraising Professionals, the Urban Institute’s Center on Nonprofits and Philanthropy, and DonorPerfect launched the Growth in Giving (GIG) Initiative and began to form data-sharing partnerships with fundraising software firms such as Bloomerang, Neon, Abila, and others. Today, the GIG Initiative has capitalized on the vast amount of data collected by software firms on an ongoing basis to create a database that will help advance research, education, and public understanding of philanthropy.

The GIG Initiative’s unique data collection process allows donor software firms to contribute data on individual gift transactions without jeopardizing the confidentiality of any contributors or organizations. To date, software vendors have contributed data – including, when available, historical data from the past ten years – from over 6,000 client organizations. Dozens of key metrics of fundraising performance can be generated from just four gift-transaction data fields – Organization ID (anonymized), Donor ID (also anonymized), Date of Receipt and Amount of Gift – per transaction. The dataset also contains descriptive information about the organization’s subsector and location for most of the organizations in the database.

The GIG database currently contains more than 109 million gift transactions, including over 22 million individual donations to HSOs. Now, the Initiative, in partnership with Giving USA Foundation, has used data from the GIG database to produce the Giving USA Philanthropy Spotlight, “Benchmarking Giving to Human Services,” which reports on fundraising within HSOs. What we learn from the first analyses of the GIG data is that HSO’s have, since 2009, nearly caught up with other types of nonprofits in fundraising productivity. Giving increased at a slightly faster rate than contributions to non-HSOs (58.1 percent vs. 48.7 percent) in the period 2009-2015, which encompasses the recovery from the Great Recession. More strikingly, the average amount contributed per donor grew 70.7 percent for HSOs compared to 18.9 percent for non-HSO nonprofits over the same timeframe.

Spotlight July 2016.inddThe Giving USA Spotlight report also features a number of statistics widely used by professional fundraisers to compare HSOs and other nonprofits. These statistics include:

  • Contributions per donor
  • Donors per organization
  • Retention of current donors
  • Acquisition of new donors
  • Timing of contributions

The Giving USA Philanthropy Spotlight tells the story of how human services organizations have nearly caught up with other types of nonprofits in fundraising productivity, and shows how HSOs can use their own data to learn how to thrive and how to grow. The report also gives us a first look at the possibilities for actionable research that the GIG database provides.

The Giving USA Philanthropy Spotlight, “Benchmarking Giving to Human Services” is now available to download for $19.95 at www.givingusa.org.

About the authors: This post was written by the Spotlight co-authors: Nathan Dietz, Senior Research Associate, Center on Nonprofits and Philanthropy at the Urban Institute, and Kimberly Hawkins, Giving USA Foundation and Retired Senior Consultant and Principal, Marts & Lundy.

Read official press release.


Giving USA: 2015 Was America’s Most-Generous Year Ever

Charitable donations hit record for second year in a row, at estimated $373.25 billion.

Donations from America’s individuals, estates, foundations and corporations reached an estimated $373.25 billion in 2015, setting a record for the second year in a row, reports Giving USA 2016: The Annual Report on Philanthropy for the Year 2015, released today.

Giving USA 2016 book

That new peak in contributions is record-setting whether measured in current or inflation-adjusted dollars. In 2015, total giving grew 4.1 percent in current dollars (4.0 percent when adjusted for inflation) over 2014. The revised inflation-adjusted estimate for total giving in 2014 was $359.04 billion, with current-dollar growth of 7.8 percent, and an inflation-adjusted increase of 6.1 percent.

But that’s not the only big news about charitable giving in this year’s report.

“If you look at total giving by two-year time spans, the combined growth for 2014 and 2015 hit double digits, reaching 10.1 percent when calculated using inflation-adjusted dollars,” said Giving USA Foundation Chair W. Keith Curtis, president of nonprofit consulting firm The Curtis Group, Virginia Beach, Virginia. “But these findings embody more than numbers—they also are a symbol of the American spirit. It’s heartening that people really do want to make a difference, and they’re supporting the causes that matter to them. Americans are embracing philanthropy at a higher level than ever before.”

Charitable contributions from all four sources went up in 2015, with those from individuals once again leading the way in terms of total dollar amount, at $264.58 billion. This follows the historical pattern seen over more than six decades.

Giving USA, the longest-running and most comprehensive report of its kind in America, is published by Giving USA Foundation, a public-service initiative of The Giving Institute. It is researched and written by the Indiana University Lilly Family School of Philanthropy.

Diving even Deeper into Charitable Gifts, both Large and Small
“The last two years represent the highest and second-highest totals for giving—and the third and fourth largest percentage increases in giving—in the past 10 years, adjusted for inflation,” said Amir Pasic, Ph.D., the Eugene R. Tempel Dean of the Indiana University Lilly Family School of Philanthropy.

Pasic added that “the share of total giving going to each type of recipient was virtually the same in 2015 as it was in 2014. During and after the recession, some donors redirected donations to assist with pressing needs. The fact that the portion of the giving “pie” destined for the various subsectors has been largely consistent for the past two years suggests that giving among the broad destination categories may be stabilizing.”

Very large charitable donations—categorized here as gifts of $100 million or more—have garnered an increasing amount of attention over the past 10 to 15 years. In 2015, the very large contributions that were publicly announced totaled at least $3.3 billion.

“Each year, gifts of $100 million or more play a significant role for some individual donors and many different types of charities, and they do affect the numbers. However, Americans’ collective generosity would still be enormous even without those jaw-dropping gifts,” said Patrick M. Rooney, Ph.D., associate dean for academic affairs and research at the school. “Philanthropy is quite democratic and always has been—more people give than vote in the U.S.—and $20, $10 and $1 gifts do make a cumulative difference.”

Not only did individuals give the most; by upping their gifts 3.8 percent when measured in current dollars (and 3.7 percent when inflation-adjusted), in 2015 they were responsible for two-thirds of the year’s overall increase in total giving.

In 2015, the largest year-over-year percentage increase in contributions from sources however, came via grants made by the country’s independent, community and operating foundations, according to data provided by the Foundation Center. It went up 6.5 percent in current dollars, and 6.3 percent when adjusted for inflation. Over the past several years, foundations have seen strong asset growth, helping drive their ability to increase donations made in the form of grants

The Numbers for 2015 Charitable Giving by Source:

  • Individual giving, $264.58 billion, increased 3.8 percent in current dollars (and 3.7 percent when inflation-adjusted) over 2014.
  • Foundation giving, $58.46 billion, was 6.5 percent higher than 2014 (6.3 percent when inflation-adjusted).
  • Charitable bequests, $31.76 billion, increased 2.1 percent (1.9 percent when inflation-adjusted) over 2014.
  • Corporate giving, $18.45 billion, increased 3.9 percent (3.8 percent when inflation-adjusted) over 2014 giving.


Charitable Giving Levels Reflect Economic Conditions

Sustained growth in total giving for 2014 and 2015 could be due, in part, to at least two factors: The country’s overall economic environment continuing its path to recovery after recessionary times, and household finances seeming to stabilize.

Healthy growth among several key economic factors, including: personal consumption; personal income; disposable personal income; GDP; and, corporate pre-tax profits, influenced all four sources of giving when it came to 2015 charitable donations, and from individuals in particular.

While the S&P 500 declined steadily throughout 2015, ending essentially flat (at -0.7 percent), its double-digit growth in each of the two years prior, and attendant rise in many portfolio values, helped buoy 2015 giving.

One gauge of philanthropy’s impact on American society is the fact that charitable giving is at a level high enough for it to be part and parcel of GDP. In fact, charitable donations have hovered around 2 percent of GDP for many years. In 2015, the relevant figure was 2.1 percent, the same as in 2014 and slightly above the 40-year average of 1.9 percent.

Upon closer examination of the relationship between giving and GDP, which totaled $17.95 trillion at year’s end, Jeffrey D. Byrne, chair of The Giving Institute and president and CEO of Jeffrey D. Byrne + Associates in Kansas City, Missouri, sees something potentially even more interesting: “Between 2010 and 2015, growth in charitable donations actually outperformed growth in GDP,” he said, adding, “consider this: inflation-adjusted total giving grew at an annualized average rate of 3.6 percent during that time frame; meanwhile, GDP growth grew at an average rate of 2 percent.

“Isn’t that a fascinating statistic,” he asked, “that growth in total giving has been outpacing growth in our nation’s GDP? I believe that is information Americans can wrap their heads around and celebrate. I hope everyone who either works within philanthropy, donates to philanthropic causes, or benefits from the good work such organizations do, will participate in helping this level of growth continue and even increase.”


Highlights about 2015 Gifts to Charitable Organizations

When looking at the other side of giving—contributions to nine major types of charitable organizations—2015 was noteworthy for several reasons:

  • Giving to educational institutions remained strong; growth exceeded 5 percent in 2015, as it also did in four of the five years between 2010 and 2014.
  • The giving to religion slice of Giving USA’s recipient pie chart, which measures the percentage of donations made to nine charitable subsectors, has steadily shrunk for decades. Paradoxically, it has never tumbled from its first-place standing in terms of total donations received. In 2015, the category held firm at 32 percent of the total received, the same figure estimated for 2014.
  • Many valuable gifts of artwork, books and manuscripts, along with other types of “appreciated assets,” were donated to charitable organizations in 2015. Since art markets both domestic and global were at or near peak highs in 2014 and 2015, that could explain why.
  • Giving to foundations was the only category in 2015 where donations decreased—by 3.8 percent in current dollars. Since foundations tend to receive very large gifts, it is possible their magnitude was not as great in 2015 compared to 2014, especially since those contributions influence year-over-year changes in giving.
  • Giving to international affairs increased 17.5 percent in 2015 after two straight years of decline. That large increase may be attributable to growth in the number of active international charitable organizations; use of more strategic fundraising methods; and increased focus on international issues among foundations. Additionally, as the slowest-growing type of charitable organization (in terms of gifts received) for six years, giving to this category may have taken longer to recover from the recession than others.


The Numbers for 2015 Charitable Giving to Recipients

As noted above, all but one of nine categories that Giving USA’s research covers saw increased giving in 2015; donations to foundations was the exception.

  • Religion—at $119.30 billion, 2015 giving increased 2.7 percent in current dollars, and 2.6 percent when adjusted for inflation.
  • Education—giving increased to $57.48 billion, 8.9 percent more in current dollars than the 2014 total. The inflation-adjusted increase was 8.8 percent.
  • Human Services—its $45.21 billion total was 4.2 percent higher, in current dollars, than in 2014. The inflation-adjusted increase was 4.1 percent.
  • To Foundations—at an estimated $42.26 billion in 2015, giving declined 3.8 percent in current dollars and decreased 4.0 percent when adjusted for inflation.
  • Health—the $29.81 billion estimated for 2015 giving to this category was 1.3 percent higher, in current dollars, than the 2014 estimate. When adjusted for inflation, the increase was 1.2 percent.
  • Public-Society Benefit—the $26.95 billion estimate for 2015 increased 6.0 percent in current dollars over 2014. When adjusted for inflation, the increase was 5.9 percent.
  • Arts/Culture/Humanities—at an estimated $17.07 billion, growth in current dollars was 7.0 percent in 2015. When adjusted for inflation, the increase was 6.8 percent.
  • International Affairs—the $15.75 billion estimate for 2015 increased 17.5 percent, in current dollars, from 2014. The increase was 17.4 percent when adjusted for inflation.
  • Environment/Animals—the $10.68 billion estimate for 2015 was up 6.2 percent in current dollars, and 6.1 percent when adjusted for inflation, over 2014 giving.

In addition to the above, 2 percent of 2015’s total charitable giving, $6.56 billion, went to individuals. These contributions were largely in-kind donations of medicine contributed via pharmaceutical foundations’ patient assistance programs.

Adding further context to the giving by recipient data, “Five charitable subsectors saw large increases in 2015: giving to education; arts, culture and humanities; environment/animals; public-society benefit; and international affairs. Each of these subsectors grew by more than 5 percent,” said Una Osili, Ph.D., director of research at the school. “And two of those—education and the arts—traditionally include organizations and institutions that wealthy donors are most likely to support. In addition, the increase in education giving was fueled by a number of very large gifts to colleges and universities.”

 

NOTES TO EDITORS

Members of the media can request 40-year data tables that show sources of contributions by year in current and inflation-adjusted dollars and allocation of gifts by type of recipient category, also in current and inflation-adjusted dollars. Data also are available showing total giving as a percentage of GDP, individual giving as a percentage of disposable income and corporate giving as a percentage of corporate pre-tax profits.

The requested citation for Giving USA is Giving USA 2016: The Annual Report on Philanthropy for the Year 2015, a publication of Giving USA Foundation, 2016, researched and written by the Indiana University Lilly Family School of Philanthropy. Available online at the Giving USA store.

About Giving USA Foundation
Advancing the research, education and public understanding of philanthropy is the mission of Giving USA Foundation, founded in 1985 by The Giving Institute. Headquartered in Chicago, the Foundation publishes data and trends about charitable giving through its seminal publication, Giving USA, and quarterly reports on topics related to philanthropy. Published since 1956, Giving USA is the longest running, most comprehensive report on philanthropy in America. Read more about Giving USA Foundation’s history, as well as the history of Giving USA and philanthropy in the U.S. in the Giving USA 2015 Spotlight: Celebrating Service to Philanthropy (available as a free download).

About Giving USA
For over 60 years, Giving USA: The Annual Report on Philanthropy in America, has provided comprehensive charitable giving data that are relied on by donors, fundraisers and nonprofit leaders. The research in this annual report estimates all giving to all charitable organizations across the United States. Giving USA is a public outreach initiative of Giving USA Foundation™ and is researched and written by the Indiana University Lilly Family School of Philanthropy. Giving USA Foundation, established in 1985 by The Giving Institute, endeavors to advance philanthropy through research and education. Explore Giving USA products and resources, including free highlights of each annual report, at our online store.

About The Giving Institute
The Giving Institute, the parent organization of Giving USA Foundation™, consists of member organizations that have embraced and embodied the core values of ethics, excellence and leadership in advancing philanthropy. Serving clients of every size and purpose, from local institutions to international organizations, The Giving Institute member organizations embrace the highest ethical standards and maintain a strict code of fair practices. For information on selecting fundraising counsel, visit www.givinginstitute.org.

How to Obtain Giving USA 2016
Giving USA 2016: The Annual Report on Philanthropy for the Year 2015, will be available for download June 14, 2016, at our online store. A complimentary executive summary, Highlights, also will be available on that date.

Customers can select from a number of Giving USA 2016 products, including the full report, available in both digital and paperback formats; a PowerPoint slide deck; data tables; and the free Highlights executive summary.

Giving USA Foundation periodically publishes in-depth reports (Spotlights) on different aspects of charitable giving and fundraising trends. Visit www.givingusa.org for available topics; prices vary.

About the Indiana University Lilly Family School of Philanthropy
The Indiana University Lilly Family School of Philanthropy is dedicated to improving philanthropy to improve the world by training and empowering students and professionals to be innovators and leaders who create positive and lasting change. The school offers a comprehensive approach to philanthropy through its academic, research and international programs and through The Fund Raising School, Lake Institute on Faith & Giving and the Women’s Philanthropy Institute. For more information, visit www.philanthropy.iupui.edu.

Giving USA Methodology
Giving USA estimates primarily rely on econometric methods developed by leading researchers in philanthropy and the nonprofit sector and are reviewed and approved by the members of the Giving USA Advisory Council on Methodology (ACM). Members of the ACM include research directors from national nonprofit organizations, as well as scholars from such disciplines as economics and public affairs, all of whom are involved in studying philanthropy and the nonprofit sector.

The Indiana University Lilly Family School of Philanthropy prepares all of the estimates in Giving USA for Giving USA Foundation. Giving USA develops estimates for giving by each type of donor (sources) and for recipient organizations categorized by subsectors (uses). Most of Giving USA’s annual estimates are based on econometric analyses and tabulations of tax data, economic indicators and demographics. Data for giving by foundations come from the Foundation Center.

Following the same approach by leading public and private institutions that develop economic statistics, Giving USA researchers update data found within Giving USA each year. This is because current Giving USA estimates are developed before final tax data, some economic indicators, and some demographic data are available. The estimates are revised and updated as final versions of these data become available. Final estimates are usually developed two to three years after their initial release.

For more specific details on Giving USA’s methodology, please refer to the “Brief summary of methods” section within Giving USA 2016 or contact the Indiana University Lilly Family School of Philanthropy at adrldavi@iupui.edu or 317-278-8972.

 

Media Contact:

FOR the FOUNDATION: Sharon Bond, 847/530-1549, sharon@gooddogpr.com

FOR the SCHOOL:  Adriene Davis Kalugyer, 317/278-8972, adrldavi@iupui.edu


Giving USA: Americans Donated an Estimated $358.38 Billion to Charity in 2014; Highest Total in Report’s 60-year History

Giving USA: Americans Donated an Estimated $358.38 Billion to Charity in 2014; Highest Total in Report’s 60-year History

Healthier American economy, as measured by multiple indicators, was engine for 7.1 percent growth in charitable giving

CHICAGO (June 16, 2015)—Americans gave an estimated $358.38 billion to charity in 2014, surpassing the peak last seen before the Great Recession, according to the 60th anniversary edition of Giving USA, released today. That total slightly exceeded the benchmark year of 2007, when giving hit an estimated inflation-adjusted total of $355.17 billion.
The 2014 total jumped 7.1 percent in current dollars and 5.4 percent when inflation-adjusted over the revised estimate of $339.94 billion that Americans donated in 2013, according to Giving USA 2015: The Annual Report on Philanthropy for the Year 2014.

In addition, 2014 marked the fifth year in a row where giving went up; the average annual increase was 5.5 percent in current dollars (3.4 percent when inflation-adjusted).

All four sources that comprise total giving—individuals (72 percent of the total); corporations (5 percent); foundations (15 percent); and bequests (8 percent)—upped their 2014 donations to America’s 1-million-plus charities, says the report, which is the longest-running and most comprehensive of its kind in America. Giving USA is published by Giving USA Foundation, which was established by The Giving Institute to advance philanthropy through research and education. The report is researched and written by the Indiana University Lilly Family School of Philanthropy.

“The 60-year high for total giving is a great story about resilience and perseverance,” said W. Keith Curtis, chair of the Foundation and president of Virginia Beach, Virginia, nonprofit consulting firm The Curtis Group. “It’s also interesting to consider that growth was across the board, even though criteria used to make decisions about giving differ for each source.”

Curtis said two examples illustrate the point: “Individual giving is affected by available disposable income at the household level, wealth and growth in the S&P 500. All three increased last year as did the amount people spent in general—not just on charitable donations. Corporate giving decisions, on the other hand, have historically been driven by changes in pretax profits and GDP. Other factors might be affecting how much they donate; time—and further research—will tell.

“With virtually every economic indicator that gets measured showing growth, I think it’s safe to conclude they played a large part in making 2014 a banner year for giving from every source,” he added.

2014 Charitable Giving by Source:

  • Individual giving, $258.51 billion, increased 5.7 percent in current dollars (and 4.0 percent when inflation-adjusted) over 2013.
  • Foundation giving, $53.97 billion, was 8.2 percent higher than 2013 (the increase was 6.5 percent when inflation-adjusted).
  • Bequest giving, $28.13 billion, increased 15.5 percent (13.6 percent when inflation-adjusted) over 2013.
  • Corporate giving, $17.77 billion, increased 13.7 percent (11.9 percent when inflation-adjusted) over 2013 giving.

“As we mark the fifth consecutive year of growth in total giving, it is also encouraging that all but one of the recipient categories saw generally healthy gains last year,” said Amir Pasic, Ph.D., dean of the school. “While circumstances vary from organization to organization, it appears that the nonprofit sector overall can at last focus on expanding giving rather than regaining lost ground.”

Observations about 2014 giving:

  • Large gifts—$200 million or more—made large impact“We saw several very large gifts greater than $200 million—a few were greater than $500 million and one was nearly $2 billion—in 2014,” said Patrick Rooney, Ph.D., associate dean for academic affairs and research at the school. “The majority of these ‘mega-gifts’ were given by relatively young tech entrepreneurs. These gifts are high-impact and are addressing many critical issues of our time, particularly medical research.”
  • Jump in individual giving—5.7 percent—made greatest impact

The 5.7 percent more that individuals donated in 2014 over 2013 accounted for 58 percent of last year’s total growth in giving.

  • Foundation giving on the rise; all three kinds upped 2014 gifts Not only did total giving by foundations grow 8.2 percent in 2014, gifts from all three types—community, independent and operating—also went up.  The annual changes in this category are influenced most by grants from independent foundations; their 2014 gifts were 7.8 percent higher than in 2013 and accounted for 74 percent of the category’s total.Taking the long view on total charitable giving, Rooney noted that while total inflation-adjusted giving has grown beyond its prior peak, a bit of caution is warranted. “As three of the four sources of giving have not yet exceeded their previous peak levels, with only foundation giving reaching its prior high, it is still too early to tell if total giving will sustain above the pre-recession level.“That being said, we are optimistic that giving will soon return to and exceed the high levels seen prior to the Great Recession across all categories analyzed in Giving USA,” he said.

2014 Charitable Giving to Recipients

The flip side of where charitable donations come from, of course, is where those gifts go. Giving USA’s research covers what happens within nine different categories of charities; here’s what 2014 looked like for each:

  • Religion—at $114.90 billion, 2014 giving increased 2.5 percent in current dollars, and a modest 0.9 percent when adjusted for inflation.
  • Education—giving increased to $54.62 billion, 4.9 percent more in current dollars than the 2013 total. The inflation-adjusted increase was 3.2 percent.
  • Human Services—its $42.10 billion total was 3.6 percent higher, in current dollars, than in 2013. The inflation-adjusted increase was 1.9 percent.
  • Health—the $30.37 billion 2014 estimate was 5.5 percent higher, in current dollars, than the 2013 estimate. When adjusted for inflation, the increase was 3.8 percent.
  • Arts/Culture/Humanities—at an estimated $17.23 billion, growth in current dollars was 9.2 percent in 2014. When adjusted for inflation, the increase was 7.4 percent.
  • Environment/Animals—The $10.50 billion estimate for 2014 was up 7.0 percent in current dollars, and 5.3 percent when adjusted for inflation, over 2013 giving.
  • Public-Society Benefit—the $26.29 billion estimate for 2014 increased 5.1 percent in current dollars over 2013. When adjusted for inflation, the increase was 3.4 percent.
  • Foundations—at an estimated $41.62 billion in 2014, giving grew 1.8 percent in current dollars and 0.1 percent when adjusted for inflation.
  • International Affairs—the $15.10 billion estimate for 2014 decreased 2.0 percent, in current dollars, from 2013. The drop was 3.6 percent when adjusted for inflation.

In addition to the above, 2 percent of 2014’s total — $6.42 billion — went to individuals, largely through in-kind donations of medicine via patient assistance programs.

Six of the nine categories saw donations reach record highs last year when adjusted for inflation: religion, education, human services, health, arts/culture/humanities and environment/animals.

“It’s not only fantastic to see significant growth in total giving, it’s also encouraging that six types of nonprofits — two-thirds of the ones covered in Giving USA—reached historic high-water marks last year,” said David H. King, CFRE, president of Atlanta-based consulting firm Alexander Haas and chair of the Institute.

“While the overall growth is indicative of robust philanthropy to a wide spectrum of nonprofits and, thus, of all boats rising with the tide, we would be remiss to gloss over what is happening with giving to religion. Although 2014 donations reached a new high of $114.90 billion, and, as always, accounted for the largest percentage of donations, the fact is, this category is continuing its 30-year dramatic downward slide as a share of total giving. In fact, it has dropped from 53 percent of all donations in 1987 to 32 percent of the total in 2014.”

Giving to foundations, public-society benefit and international affairs has not yet returned to or surpassed peak levels. Una Osili, Ph.D., director of research at the school, said several notable trends affected donations to those three sectors.

“We found a dramatic slowing down of giving to support the largest national donor-advised funds in 2014. This may have slightly dampened giving to the public-society benefit subsector,” she said. “We also know that giving to some pass-through charities—those that redistribute their funds to other organizations—have seen little to no growth in recent years.”

When it comes to international affairs, “donors appear to be increasing their attention to domestic causes in recent years,” said Osili, “due to increased needs in the U.S. Additionally, giving to international affairs in 2014 may have been affected by the fact that there was not a major international natural disaster on the scale that we have seen in some recent years, which tends to influence giving to this category.

”The trend of very large gifts to foundations has been holding steady for the past few years, so giving to foundations is close to achieving a high point again,” Osili said. “Gifts to foundations peaked in 2007, when they reached an inflation-adjusted total of $43 billion. That year, several extraordinarily large gifts – including several higher than $500 million and one that exceeded $1 billion – factored into the total.”

Further observations about giving to recipients:

  • Giving to religion’s decline over time as a share of the total reflects that fewer Americans currently identify with a religion, attend worship services or give to houses of worship. These effects have been noted among the Baby Boomer generation; younger age groups appear to be following the same path.
  • Human services giving has increased annually since 2006, when adjusted for inflation. While growth has been modest in recent years, this category, which provides essential services to low-income households, youth and communities, continues to be of central importance to Americans when it comes to charitable donation decisions.
  • Giving in two categories—arts/culture/humanities and environment/animals—saw the fastest growth last year among the nine; in addition, neither has seen a decline (in current dollars) since the end of the recession.
  • Giving to education continues to be strong, and to higher education in particular. Included in its 2014 total are several multi-million dollar gifts, including two of more than $100 million. The latter supported medical research on university campuses.

“The 2014 growth among eight out of nine types of charitable organizations is good news for the philanthropic sector as a whole,” Curtis said. “The growth can be attributed, in part, to the ways charities have been working smarter during daunting times. Nonprofits increasingly are making sure they have strong cases for support, communicate frequently with donors and provide proof of the impact charitable gifts make.

“Now that there seems to be a bit of breathing room, I would encourage charities to continue all these good habits and ensure they remain ingrained as part of their organizational philosophy. If they do, success should continue.”

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NOTES TO EDITORS

Members of the media can request 40-year data tables that show sources of contributions by year in current- and inflation-adjusted dollars and allocation of gifts by type of recipient category, also in current- and inflation-adjusted dollars. Data also are available showing total giving as a percentage of Gross Domestic Product, individual giving as a percentage of disposable income and corporate giving as a percentage of corporate pre-tax profits.

The requested citation for Giving USA is Giving USA 2015: The Annual Report on Philanthropy for the Year 2014, a publication of Giving USA Foundation, 2015, researched and written by the Indiana University Lilly Family School of Philanthropy. Available online at http://www.givingusa.org.

About Giving USA Foundation™ and The Giving Institute

2015 serves as a benchmark year for both Giving USA Foundation™ (www.givingusa.org) and the organization that created it, The Giving Institute (www.givinginstitute.org)

For the Institute, whose membership is comprised of consultants to nonprofits, 2015 marks 80 years since 11 firms created a trade association focused on ethical fundraising counsel. That mission remains, and its Code of Ethics is a model in the field.

The group’s public-service initiative—measuring and reporting on charitable giving in America—started with the first of 60 consecutive annual reports, known colloquially as Giving USA. The Institute formed Giving USA Foundation™ in 1985 to advance the research, education and public understanding of philanthropy.

Headquartered in Chicago, both the Foundation and the Institute anticipate continuing their respective—and linked—missions for decades to come.

How to Obtain Giving USA 2015

Giving USA 2015: The Annual Report on Philanthropy for the Year 2014, will be available for download June 16, 2015, at www.givingusa.org. A complimentary executive summary, Highlights, also will be available on that date.

Customers can select from a number of Giving USA 2015 products, including the full report, available in both digital and paperback formats; a PowerPoint slide deck; the data tables; and the free Highlights executive summary.

Giving USA Foundation™ periodically publishes in-depth reports (Spotlights) on different aspects of charitable giving and fundraising trends. Visit www.givingusa.org for available topics; prices vary.

About the Indiana University Lilly Family School of Philanthropy

The Indiana University Lilly Family School of Philanthropy is dedicated to improving philanthropy to improve the world by training and empowering students and professionals to be innovators and leaders who create positive and lasting change. The school offers a comprehensive approach to philanthropy through its academic, research and international programs and through The Fund Raising School, Lake Institute on Faith & Giving and the Women’s Philanthropy Institute. For more information, visit www.philanthropy.iupui.edu.

Giving USA Methodology 

Giving USA estimates primarily rely on econometric methods developed by leading researchers in philanthropy and the nonprofit sector and are reviewed and approved by the members of the Giving USA Advisory Council on Methodology (ACM). Members of the ACM include research directors from national nonprofit organizations, as well as scholars from such disciplines as economics and public affairs, all of whom are involved in studying philanthropy and the nonprofit sector.

The Indiana University Lilly Family School of Philanthropy prepares all of the estimates in Giving USA for Giving USA Foundation. Giving USA develops estimates for giving by each type of donor (sources) and for recipient organizations categorized by subsectors (uses). Most of Giving USA’s annual estimates are based on econometric analyses and tabulations of tax data, economic indicators and demographics. Data for giving by foundations come from the Foundation Center.

Current Giving USA estimates are developed before final tax data, some economic indicators,  and some demographic data are available. The estimates are revised and updated as final versions of these data become available. Final estimates are usually developed two to three years after their initial release.

For more specific details on Giving USA’s methodology, please refer to the “Brief summary of methods” section within Giving USA 2015 or contact the Indiana University Lilly Family School of Philanthropy at adrldavi@iupui.edu or 317-278-8972.

Contact:

FOR the FOUNDATION: Sharon Bond, 847/530-1549, sharon@gooddogpr.com

FOR the SCHOOL: Adriene Davis Kalugyer, 317-278-8972, adrldavi@iupui.edu


Declining Alumni Giving: What’s happening? Why is it happening? And, what can we do about it?

Angela White, Senior Consultant and CEO, Johnson, Grossnickle and Associates, Inc.
Angela White, Senior Consultant and CEO, Johnson, Grossnickle and Associates, Inc.

In a new Giving USA Spotlight entitled “The Next Generation of Alumni Giving,” the Council of Alumni Association Executives (CAAE) sponsored a comprehensive view of alumni giving, written and researched by the Indiana University Lilly Family School of Philanthropy. The findings are paramount to understanding the decline in alumni participation rates and, most importantly, how we can reverse this trend for the future.

What’s happening?
Each year the Giving USA: The Annual Report on Philanthropy consistently shows that giving to education is a priority in our nation, second only to giving to religion. Yet alumni giving participation rates have been declining in recent years across both precollege and higher education alma maters. In research by the Council for Advancement and Support of Education (CASE) and the Council for Aid to Education (CAE), alumni participation rates are dropping while average alumni gifts are increasing. Interestingly, precollege institutions are seeing higher alumni participation rates than are institutions of higher education.

However, after years of decline, alumni participation at higher education institutions appears to be on the rebound. The new study also points out that higher education institutions with the highest campaign goal amounts in 2013 (> or = $1 billion) have the highest alumni participation rates in the campaign at 24% compared with those institutions that had lower campaign goals (< $50 million) who had just 1% alumni participation in the campaign. Precollege institutions also report declining alumni participation in campaigns, showing an average decrease from 21% in 2005 to 10.5% in 2013.

Why is it happening?
There are several reasons posed for the trend of decreasing alumni participation rates. The first reason is simply better tracking. Through the advanced use of technology, institutions are better equipped to track alumni and thus the lower participation rates might be partially attributable to the use of better and more complete data.

Secondly, the rise of family foundations and donor advised funds may be skewing the alumni participation data because these gifts are counted as organizational gifts, not personal gifts, for reporting purposes. This is important to consider as alumni are using these giving vehicles with more frequency.

Finally, it is posed that the turbulence of the alumni experience on campuses in the 1960s and a lessened respect for authority might have a role to play in the decreasing alumni participation rates. The decreases began to occur at approximately the same time that these alumni reached their early 60s which could be considered their optimal giving years and anecdotal evidence exists that there may be a connection between their educational experience in the 1960s and giving today.

What can we do about it?
Engage, communicate, and invest! The engagement of students before they become alumni has proven to enhance alumni engagement. Specifically, students’ involvement in extracurricular activities is correlated to higher alumni participation rates and higher giving.

The need for strong alumni communication also stands out as an important factor. Research shows that those alumni who are more informed about their institution give more than those who are not as well informed. However, it is critical to understand and utilize their preferred communication methods (online, social media, etc.). And, investment in alumni activities by the institution increases the likelihood of alumni giving. It is important to consider the investment in the alumni experience beyond reunions and events to student mentoring, career placement, governing and advisory board service, to name a few.

The full Giving USA Spotlight on the next generation of alumni giving provides very important context for the current trends in alumni giving, excellent data on respective types of institutions and their alumni giving trends, as well as provides thought provoking ideas for deepening alumni engagement at all levels. I highly recommend this issue as important reading for all of us working in the field of education.

This article originally appeared on the Johnson, Grossnickle and Associates website.


Perspectives on Giving USA 2014 from the Chair of the Giving USA Foundation

Gregg Carlson, Chair, The Giving USA Foundation
L. Gregg Carlson, Chair Giving USA Foundation

I would like to take the chair’s prerogative to bring home a point I think sometimes gets lost when it comes to Americans’ donations to our country’s philanthropic organizations.

To wit, it is commonly perceived that as the stock market goes, so goes giving. This is true to a point, but let’s stop and look at what happened last year: While the benchmark Standard and Poor’s 500 rose appreciably – 27.8 percent when adjusted for inflation, to be exact –total giving rose much more modestly – by “only” 3.0 percent in those same inflation-adjusted dollars.

So why didn’t total giving from American individuals, corporations and foundations grow at that same double-digit rate last year? Because there are more variables that play into our collective response to the needs of charitable organizations than stock market results.

Consider that, in 2013, all economic factors, such as the stock market, GDP and personal income and consumption, rose. Consumer confidence also was up. However, these factors were not as strong in 2013 as they were in 2012. This, coupled with the fact that giving often lags increases in the stock market resulted in a more modest increase than if one only considers the markets.

Make no mistake – the estimated $335.17 billion in 2013 donations proves yet again that the call for support is answered generously by our citizenry. In fact, 2013 marked the fourth straight year of gains in total giving. I think that is news to be celebrated, after the gloomy years of the Great Recession.

I truly believe that our 59th annual report to the American people, Giving USA 2014, confirms through data what people across the country seem to feel: Donors are increasingly more comfortable giving to the causes they care about and at a level in keeping with the impact they would like to make.

We are seeing clear gains in the total amount given by individuals in the last couple of years. Of special interest is the rise in contributions by individuals between 2011 and 2013 – it represents 73 percent of the growth in total giving during that time frame.

This rise in giving from our country’s households ameliorates a drop in gifts from American corporations last year, which might come as a surprise, since 2012 donations were up significantly. For 2013, corporate gifts declined 1.9 percent, most likely because pretax profits were not as robust as the year before.

Of course, sources of giving are only half the picture – we also examine where those donated dollars go. Our comprehensive research shows that many charities are beginning to see the light at the end of the recessionary tunnel.

In one particular subsector – education – campaigns that started up after delays brought on by difficult economic times were definitely seeing success. And, overall, giving to education rose last year, by 7.4 percent when adjusted for inflation.

Of great significance, I believe, five categories of charities reached or surpassed their all-time-high giving levels (in inflation adjusted dollars) since the recession officially ended in mid-2009: human services, health, foundations, environment/animals, and, as noted above, education.

We do see some seesawing among contributions – when one subector’s totals decline, it is most likely because donors changed their giving preferences. That doesn’t mean there is a change in need among the constituent organizations for their services, of course, so our philanthropic community still must stay on-point and in communication to ensure their message doesn’t get lost by the vagaries of public perception.

These thoughts are merely a topline overview of my perspective on giving. The pages of our report provide a level of detail that will help those interested in learning the patterns and trends of charitable giving in our country. I invite you to dive in with us; I also invite your comments and questions.


Giving USA 2014: Implications for Higher Education

Total Giving

In total, Giving USA 2014 estimates that $335 billion was given to charity in the United States last year by individuals, corporations, and foundations.

Graph of Total Giving 1973 - 2013
© 2014 Giving USA Foundation

This is the fourth consecutive year of growth in giving, following what was an unprecedented two-year drop in giving during 2008 and 2009. Most encouragingly, this total puts the sector within five percent of the high water mark for charitable giving set in 2007 before the recession ($349 billion in inflation adjusted dollars). That means that in 2014 – if growth holds steady – we will likely come close to matching or eclipsing the highest recorded total giving that Giving USA has ever recorded. Given the economic uncertainty that followed the recession, some thought that it might take a decade to return to these levels, but donors and fundraisers have made it happen in half that time.

Shifting out of “Crisis Mode”

Another year of data gives us a clearer picture of how donors responded to the recession and the recovery, and what opportunities and challenges those responses have created. As the recession hit, all types of programs felt the collective strain of reduced giving.Table showing Giving by Subsector 2009 vs 2013 It is fairly clear now, however, that donors didn’t just reduce, but also reallocated their giving, so the impact on things like giving to human service organizations was buffered by people and organizations redirecting gifts that would have gone to other types of organizations – like institutions of higher education – in less trying times.

Donors now appear to be adjusting out of this crisis mode and rebalancing their giving portfolios to invest in areas like arts and culture, the environment and animals, and education. As a result, giving in these areas is growing at a faster rate than giving to the nonprofit sector as a whole during the recovery, while giving to human services, international affairs, and religion have grown at a slower rate than the sector – or even declined.

Ongoing Challenges

Charitable giving also represents only one portion of an institution’s financial well-being. Government resources devoted to research and student assistance, a significant source of revenue for many institutions, have been reduced or stayed flat, and the economic wherewithal of students and their families to bear the burden of tuition either through direct payment or incurred debt remains a challenge. It is unlikely that even strong growth in giving could completely counteract instability in these areas.

Giving to Education

Graph showing giving to education 1973-2013
*including higher education, k-12, and other education focused nonprofits
© 2014 Giving USA Foundation

What this Means for Colleges and Universities:

Don’t miss your opportunity to reengage donors: Donors can frequently be lost or gained in moments of transition. As they face financial hardships, move to new places, or garner new financial resources, people often reevaluate where they are giving. The economic turmoil of the past several years caused many donors to change their habits, stopping their giving to some organizations and redirecting resources to areas of perceived need. Data suggests we are now at a new point of transition, where donors are reinvesting in education and other areas. It is important that colleges and universities make sure that they reengage these donors before other causes capture their attention and interest.

Suggested steps include:

  • Review contact lists to ensure that donors who lapsed during the recession get new appeals now with compelling messaging.
  • Evaluate major gift prospects from past years and where prudent work to reengage prospects who expressed shifting priorities during the recession.
  • Review and refine messaging to remind current and prospective donors of the power of higher education to transform lives, communities, and the world. Donors who have given to alleviate pressing human needs over the past several years may feel that the need in those areas is less now, but they may have also grown accustomed to the satisfaction of knowing that their gift was making a concrete difference.
  • Create a strategy to engage friends and neighbors of your institution beyond alumni. Alumni aren’t the only ones reevaluating their giving priorities, and gifts from non-alumni households accounted for nearly one out of every five dollars given to higher education in 2013.

Remember capital is firmly on the table: Another aspect of shifting donor priorities is growing support for capital projects and long-term investments. The Council for Aid to Education’s Voluntary Support for Education survey found that giving for capital purposes grew at nearly twice the rate of giving for current operations (12.4 percent growth vs. 6.9 percent growth). Comprehensive campaigns, or even targeted capital projects, can provide opportunities to excite and reengage donors.

Suggested steps include:

  • If you are not currently in a capital campaign, evaluate current institutional plans and look for fundable capital projects. Work with institutional leadership and donors to find opportunities to generate contributions for capital and endowment focused projects.
  • Continue to follow best practices and test donor perceptions of gifts for capital and current operations in conversations. While statistics suggest that donors are increasingly investing in these efforts, we also know that there is no one-size-fits all approach when it comes to major donors, and a significant portion of gifts to higher education continue to be focused on current operations.

Perspectives from the Chair of The Giving Institute on Giving USA 2014

David King, Chair, The Giving Institute
David H. King, CFRE, Chair
The Giving Institute

First, one unfinished piece of business from last year: When Giving USA 2013 was released, I wrote in this “Perspectives” column that saber-rattling from Washington about doing away with the tax deduction for charitable donations bore watching.

For now, it remains intact, but as I promised, the Giving Institute will continue its vigilance and report to the nation’s philanthropic constituency as necessary to sound an alert should attention need to be paid or specific actions taken.

Turning now to what else is both on the horizon and in the immediate past, I hope that in my purview as head of a fundraising consulting firm and chair of the Institute, the additional perspective below gleaned over the past 12 months will be viewed as helpful to those working in American philanthropy, as well as to those who donate to causes they care about:

It’s not enough to just read the headline touting the fourth straight year that American families, businesses and foundations increased their total giving to charitable groups. Taking at least some small measure of time to study the details (that’s where it is said the devil is, after all) reveals some important truths about giving in our society today. These combine both emerging trends and inescapable facts, in my opinion.

While total giving in 2013 was the highest we’ve seen since the Great Recession officially ended in 2009 – it reached $335.17 billion when adjusted for inflation – not every type, or subsector, of charity studied by Giving USA saw equal gains. This may well be reflective of how American donors are coping with post-recession economic realities. And let’s face it, historically, it is always about how we view our own particular pocketbooks and wallets that determines our response to an appeal for a donation, no matter how worthy the institution doing the asking.

Appealing to the heart does go hand-in-hand with cold-hard economic realities in most cases, of course, and sensing that neighbors, friends and others were hurting a few years ago drove changes in giving behavior – human services organizations received more.

A long-term societal trend continues to have an impact on the largest piece of the giving “pie” – donations to religion. With nonstop declines in the numbers of people either identifying with a particular faith or attending worship services regularly, giving to religion in 2013 reached its lowest level as a percentage of the total in more than 40 years and also declined in current dollars for the first time ever in a non-recession year.

From my perspective, religious institutions need to focus on how to reverse this slide.

On the growth side, over the past three years, giving to the arts, the environment, education and health has been consistently rising. With a slight exception for health-related causes, some donors pulled away from these types of organizations for the recession years.

And international affairs, growing apace for several years now, slowed down in 2013 – perhaps due to changes in corporate giving priorities, perhaps because thankfully international disasters requiring huge infusions of dollars did not occur. This could be a natural ebb and flow, or a trend, particularly when studying where corporations are headquartered.

Studying these changes and concomitant challenges, and discussing them with my colleagues in the professional fundraising community, is more than an intellectual exercise – it is how attention is brought to bear on the climate for donations our nation’s charitable organizations must understand if they are to continue to serve America’s philanthropic needs today and into the future.

I commend our Foundation and our research partner, the Indiana University Lilly Family School of Philanthropy, for once again preparing a report that is crucial to that understanding, and I hope you will glean much from its pages.