News You Can Use Newsletter June 2014
Charitable Donations Grew Again in 2013
Fourth Straight Year of Gains
Contributions Reach $335.17 billion
from American Individuals, Estates, Foundations and Corporations
Editor’s Note: If you live in the Greater Kansas City, Missouri area, please join Jeffrey Byrne + Associates, Inc., U. S. Trust and Nonprofit Connect this Thursday, June 19, at the Ewing Marion Kauffman Foundation Conference Center for a special presentation on Giving USA 2014 and findings from High Net Worth Studies commissioned by U.S. Trust. Registration and a light breakfast begin at 7:30 a.m.; the program begins at 7:55 a.m..)
As the economic factors associated with giving – the stock market, the GDP and personal income and consumption – improved in 2013, giving rose. Americans donated an estimated $335.17 billion to charitable causes in 2013, the fourth consecutive year of increases in giving, and this sustained increase in giving is good news, according to the Giving USA Foundation™ and its research partner, the Indiana University Lilly Family School of Philanthropy.
The 4.4 percent increase (3.0 percent adjusted for inflation) in gifts from American individuals (both households and bequests from their estates), foundations and corporations is a positive sign that giving is climbing back up to pre-recession levels. The School predicts that if giving continues to grow at the current inflation-adjusted rate, averaging the last two years (4.2 percent), it will take just about one more year or so for total giving to return to the peak level realized in 2007 ($349.50 billion in inflation-adjusted dollars.)
These findings are contained in the 59th consecutive edition of Giving USA, the seminal annual report on charitable giving in America.
“Americans continue to philanthropically support their communities and the charities they value. Collectively, we are the most generous people on the face of the earth. 2013 was a banner year for giving as reflected in this overall report. As we continue to feel good about our economic circumstances, Americans will continue to give generously of their resources. The impact this has on the nonprofit sector is tremendous. Government cannot do it all. Good times have returned,” said Jeffrey Byrne, President + CEO of Jeffrey Byrne + Associates, Inc. and a Board member of the Giving Institute, which founded the Giving USA Foundation in 1985.
Key Takeaways from Giving USA 2014 about Donors:
- 2013 saw increases in giving in three of the four sources: individuals, foundations and bequests.
- The one area that saw decline was gifts by corporations, due to the lower level of corporate pre-tax profits seen in 2013 compared with 2012 (3.4 percent, compared with 18.5 percent).
- The single largest contributor to increases in total charitable giving in 2013 was an increase of $9.69 billion in giving by individuals. This reflects, in part, increases in wealth, as measured by the S&P 500 (an increase of 29.6 percent in current dollars in 2013) and in personal consumption expenditures (an increase of 3.2 percent in current dollars in 2013.)
Giving by individuals rose to $240.60 billion in 2013, an increase of 4.2 percent from 2012 (in current dollars). Adjusted for inflation, giving by individuals rose 2.7 percent in 2013. Giving by individuals accounted for 72 percent of total giving. Household income and assets are linked with charitable giving, as is individuals’ sense of financial security. As economic factors linked with household income and assets rise, so do contributions from individuals. Itemized giving by taxpayers amounted to $199.17 billion, and non-itemized giving amounted to $41.16 billion in 2013.
Giving by bequest increased an estimated 8.7 percent in current dollars between 2012 and 2013, to $27.73 billion (7.2 percent adjusted for inflation). The total amount for giving by bequest in 2013 includes two parts: 1) an estimated amount for charitable bequests from estates with assets of $1 million and above and 2) an estimated amount from estates with assets below $1 million. For 2013, estimated bequest giving from estates $1 million and above totaled $21.17 billion, while estimated bequest giving from estates withassets below $1 million totaled $6.56 billion.
Giving by foundations increased 5.7 percent (4.2 percent adjusted for inflation) to an estimated $48.96 billion in 2013, according to figures provided by the Foundation Center. Giving by all three types of foundations are included in the estimate: independent foundations increased 4.8 percent, giving by operating foundations increased 6.6 percent and giving by community foundations grew 10.5 percent. Giving USA estimates that, on average, giving by family foundations comprises 63 percent of giving by independent foundations each year. This amount was $23.36 billion – 48 percent of total giving by all foundations – in 2013.
Giving by corporations declined 1.9 percent from 2012 to 2013, totaling $17.88 billion. Adjusted for inflation, giving by corporations declined 3.2 percent in 2013. However, corporate foundation grant making grew 5 percent in 2013, to $5.73 billion. The 2013 estimate for giving by corporations includes $81 million in corporate contributions made to nonprofit organizations in support of disaster relief efforts. (Corporate giving includes cash and in-kind contributions made through corporate giving programs, as well as grants and gifts made by corporate foundations.)
“$335.17 billion in giving is a good sign that Americans are feeling generous and prosperous. Corporate giving is always reflective of pre-tax profits. However, we must continue to watch all the various sources that impact nonprofits, including government funding. Government funding continues to undergo significant changes and many organizations face limits on growth in program service fees. As Americans continue to have to make real decisions about allocating funds for their charitable giving, nonprofits must share even stronger and compelling cases for support for charitable giving with prospective donors,” Byrne added.
Key Takeaways from Giving USA 2014 about Recipients of Charitable Contributions:
- Five charitable subsectors are faring better than others in terms of progress toward returning to or exceeding their all-time highs. The following five subsectors reached or surpassed their all-time high giving levels (in terms of inflation-adjusted dollars) since the end of the Great Recession:
- Education: in 2013, $52.07 billion, up 8.5 percent from 2007
- Human Services: in 2013, $41.51 billion, up 17.5 percent from 2007
- Health: in 2013, $31.86 billion, up 12.2 percent from 2007
- Foundations: in 2012, $42.90 billion, up 1.3 percent from 2007
- Environment/animals: in 2013, $9.72 billion, up 7.5 percent from 2007
- Most subsectors saw increases in 2013 compared with 2012, with three exceptions:
- Giving to international affairs declined 6.7 percent from 2012, to $14.93 billion. The decline in giving to international affairs is attributed to three factors: a decrease in overall contributions given by corporations, which affected corporate giving to international organizations; a slight shift in giving by foundations and corporations, in particular, from U.S.-based international organizations directly to overseas organizations and less robust support for disasters in 2013 compared to prior years.
- Giving to foundations declined 15.5 percent in 2013. The percentage change in giving to foundations from year to year tends to be volatile given the very large gifts that foundations receive.
- Giving to religion was flat in current dollars (-.2 percent) and declined by 1.6 percent, adjusted for inflation. Giving to religion has been impacted by declines in religious attendance and membership in recent years.
Giving to religion held flat (a -0.2 percent decline) between 2012 and 2013 (a 1.6 percent decline when adjusted for inflation,) with contributions totaling $105.53 billion.
Religious organizations (comprised of congregations and houses of worship, the organizing or national offices of denominations and faith groups, missionary societies, religious media and organizations formed for religious worship, fellowship or evangelism) continue to receive the largest share of total U.S. charitable giving (31 percent) in 2013. However, compared with most other charitable subsectors that have seen positive growth since the end of the Great Recession in 2009, giving to religion declined. Between 2009 and 2013, giving to religion fell 2.4 percent in inflation-adjusted dollars. This is compared with growth in overall giving of 12.3 percent in inflation-adjusted dollars over the same period.
Giving to education increased 8.9 percent between 2012 and 2013 (7.4 percent adjusted for inflation), to $52.07 billion. This estimate also includes two mega-gifts totaling $293 million that went to U.S.-based universities. The education subsector received the second-largest share of charitable dollars in 2013, at 16 percent of the total.
Giving to human services totaled $41.51 billion in 2013, a 2.2 percent increase from 2012 (a flat rate of change of .7 percent when adjusted for inflation) and comprising 12 percent of all donations received by charities in 2013. This includes $164 million in contributions that went to support disaster relief efforts.
Giving to foundations declined by 15.5 percent in 2013 (a decline of 16.7 percent adjusted for inflation), to $35.74 billion. Estimated contributions to foundations can change dramatically from year to year, depending upon very large gifts received from the wealthiest donors in America. Giving to foundations amounted to 11 percent of total giving in 2013
Giving to health organizations increased an estimated 6 percent between 2012 and 2013 (4.5 percent adjusted for inflation), with $31.86 billion in total contributions, comprising 10 percent of all donations received in 2013.
Giving to public-society benefit organizations increased 8.5 percent in 2013 (7 percent adjusted for inflation), to $23.89 billion. This category amounted to 7 percent of total giving in 2013.
(A note on entities defined as “public-society benefit”: Organizations within this subsector include the following: those related to voter education, civil rights and civil liberties; consumer rights and community and economic development; free-standing research institutions that focus on biological, physical and social sciences as well as public policy research; those that promote philanthropy and those that raise funds to distribute to nonprofits, such as United Ways, the Combined Federal Campaign and Jewish Federations of North America. Freestanding donor-advised funds (or national or commercial donor-advised funds) are also included in this subsector.)
Giving to arts, culture and humanities totaled an estimated $16.66 billion in 2013, a 7.8 percent increase from 2012 (6.3 percent adjusted for inflation) and amounted to 5 percent of total giving in 2013
Giving to international affairs was an estimated $14.93 billion in 2013, a 6.7 percent decrease from 2012 (8 percent when adjusted for inflation), comprising 4 percent of all donations in 2013. This includes $199 million in contributions that went to support disaster relief efforts.
Giving to environmental and animal organizations saw an estimated 7.5 percent increase between 2012 and 2013 (6 percent adjusted for inflation), to $9.72 billion, which accounted for 3 percent of total giving in 2013 Giving to this category includes donations of cash, securities and in-kind gifts such as equipment, land and other items of value.
Giving to individuals amounted to $3.70 billion, 1 percent of total charitable dollars in 2013.
For more information about the Indiana University Lilly Family School of Philanthropy visit www.philanthropy.iupui.edu.
For more information about Giving USA reports and how to access the Giving USA 2014 reports, visit www.givingusareports.org.