Editor’s Note:
On the morning of June 25, more than 180 individuals from the nonprofit sector gathered at the Ewing Marion Kauffman Foundation Conference Center for the 501(c) Success National Speaker Series: First Look Giving USA 2015. The event was co-sponsored by Jeffrey Byrne + Associates, U.S Trust and Nonprofit Connect, and marked 10 years of the Giving USA program in Kansas City. Patrick M. Rooney, Ph.D., Associate Dean for Academic Affairs and Research at the Indiana University Lilly Family School of Philanthropy, was in Kansas City for the eighth consecutive year to share insights on Giving USA 2015, along with a special report on million dollar gifts.
The Giving USA presentation concluded with a Q+A panel that included Tracy McFerrin, Program Officer with the Hall Family Foundation, and was followed by a Senior Leader Session that included panelists Valerie Nicholson-Watson, President and CEO of Harvesters – The Community Food Network, Mark Litzler, Executive Director of Saint Luke’s Foundation, Jennifer Ingraham, Senior Director of Advancement with the Kansas City Repertory Theatre, and Dr. Rooney.
JB+A would like to thank U.S. Trust, Nonprofit Connect, Dr. Rooney, the guest panelists and event attendees for coming together to recognize and celebrate another banner year for philanthropy.
501(c) Success National Speaker Series: First Look Giving USA 2015
Patrick Rooney Returns to Kansas City with Insights from the Seminal Annual Report on Charitable Giving in America
A packed house heard the latest numbers on charitable giving in the United States, and the numbers were good: an estimated $358.38 billion was given to charity in 2014, surpassing the pre-recession benchmark year of 2007 ($355.17 billion in inflation-adjusted dollars.) This was also the fifth year in a row of increased giving, and a 7.1 percent growth over 2013.
“Two-thirds of all American households give,” said Dr. Rooney, “And the single largest contributor to the increase in total charitable giving in 2014 was an increase of $13.88 billion in giving by individuals.” This increase accounted for 58 percent of the total change between 2013 and 2014, and individual giving received a significant boost from several very large gifts greater than $200 million. These “mega gifts” amounted to an estimated $4.79 billion.
“But over time,” Dr. Rooney also pointed out, “We have seen a subtle shift in giving by source, with households using a different instrument to give–the family foundation.” Over the last 40 years, the share of total giving by foundations rose from 6.0 percent in the five-year period ending in 1979 to 15 percent of total giving in the five-year period ending in 2014.
Charitable giving in 2014 retained its strong correlation to the American economy, with virtually every measured economic indicator showing growth. “Gross Domestic Product is one of the most important factors considered in measuring the status of a nation’s economic health, and the U.S. GDP is over $17.4 trillion–quite a substantial number,” said Dr. Rooney. “Total giving in the U.S. as a percentage of Gross Domestic Product has been at or slightly above 2.0 percent for the last three years, but moving this number up will be incremental, over time.”
Looking at where the charitable dollars go, Dr. Rooney noted good news that six of the nine recipient categories saw donations reach record highs in 2014, when adjusted for inflation: religion, education, human services, health, arts/culture/humanities and environment/animals.
Dr. Rooney maintained his cautionary outlook for the religion subsector. Since 1987, giving to religion has continued to grow (27-28 percent overall) yet it is the slowest growing sector. This category is continuing its dramatic downward slide as a share of total giving, dropping from 53 percent of all donations in 1987 to 32 percent of the total in 2014. “Overall, this sector does not really employ fundraisers. Couple that with the trends that 1) fewer Americans are identifying with a specific religion and 2) people are giving more to organizations with religious values that match their own, rather than congregations, we can see why,” explained Dr. Rooney. “But if the religion sector ever gets serious about fundraising, the other sectors should watch out,” quipped Dr. Rooney.
Dr. Rooney highlighted additional trends. “When the stock market goes up, giving to higher ed, especially through major gifts, goes up,” he said. “Growth in the stock market and economy has also been accompanied by a huge spike in giving to the Arts, Culture and Humanities sector.” While giving to human services has increased annually since 2006, Dr. Rooney did not anticipate this sector to grow “at the same rate as environment/animals or the arts/culture/humanities sectors” neither of which has seen a decline since the end of the recession.
While there was not a major international natural disaster on the scale of those in recent years, and this may have affected giving to international affairs (down 2.0 percent from 2013), Dr. Rooney also pointed out donors are not really reacting to geopolitical needs in places such as Afghanistan, Iraq and Syria. “Perhaps donors are looking at those situations as political/governmental issues, not philanthropic causes,” said Rooney, “but in 2016, you can expect to see giving to international causes such as fighting the Ebola crisis and response to the Nepal earthquake.”
Again in 2014, giving by individuals continued to outpace all other donor types. Dr. Rooney noted if you combine the 7% of foundation giving that comes from family foundations and the 8% from bequests with the 72% that comes directly from individuals – total giving from individuals actually accounts for 87% of total giving.
“More people give charitable contributions than vote,” Dr. Rooney said, “and this speaks to the importance of continuing to educate donors about philanthropy. Nonprofits need to continue to tell their stories. Donors still need to know why their gifts matter.”
