And, a shift in donor giving trends emerges
By Angela White and Jeff Small
As a Giving Institute member firm, this is always an exciting time of year for us as we get to help refine, interpret, and unveil the results of Giving USA’s annual estimates of giving. The release of this rich data analysis each year reminds us all that what you (we?) are doing doesn’t occur in a vacuum, but is influenced by a broader set of economic and cultural circumstances.
This year’s findings continue to give encouraging news to the nonprofit sector as a whole, but also help us better understand the dynamics of the charitable giving recovery that has occurred in conjunction with the slow recovery of the global economy over the past several years.
In total, Giving USA estimates that $335 billion was given to charity in the United States last year by individuals, corporations, and foundations. 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 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.
Donor Giving Shifts
Another year of data also 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. 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 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, education, and the environment and animals. As a result, giving in these areas is growing at a faster rate than giving to the 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.
Giving to Religion Decline
Troublingly, we continue to see that recent declines in giving to religious organizations appear to be the new normal. Research suggests that a decline in overall religiosity in America has left more church pews empty each week, leaving offering trays less full. This trend puts added pressure not just on houses of worship, but on the extended infrastructure of religious organizations and programs like congregations of women religious, religiously affiliated schools, seminaries, and even religiously aligned social service organizations that – though they may not be included in the “giving to religion” subsector – have long relied on the giving power of local houses of worship to power their programs.
Charitable giving also represents only one portion of a nonprofit’s financial well-being. Government resources, a source of nonprofit revenue equally important to many nonprofits, have been significantly reduced, and demand for service in nearly every subsector has remained high since the recession.
In short, these are promising results, but there is still much left to be done, as all of you on the front lines know so well. The value in this report is that in identifying these trends, we can better position ourselves to take advantage of the opportunities they present and address the challenges they create.