Fund Raising

Charitable Donations Barely Grew Last Year, 'Giving USA' Finds

June 19, 2012

For the second year in a row, charitable giving barely grew, rising just 0.9 percent after inflation in 2011, according to Tuesday's release of "Giving USA," the annual yearbook of American philanthropy, which found that donations to educational institutions also edged up by 0.9 percent.

The report estimated that the total donated was $298.4-billion.

The glacial pace of the economic recovery caused "Giving USA" researchers to make a far gloomier forecast about when a full recovery in charitable giving would occur.

"If we continue to grow at this rate, it will take more than a decade to get back to where we were in total giving in 2007," said Patrick Rooney, executive director of the Indiana University Center on Philanthropy, which compiles "Giving USA."

Last year Mr. Rooney predicted that a recovery in giving could occur by 2016; now, given current conditions, he said it would more likely happen by 2022.

No Stronger This Year

Slow fund-raising growth in 2011 came nowhere near to erasing historic drops—the deepest ever recorded in the report's five decades—caused by the recession.

Total charitable giving last year was still 11 percent below what it was in 2007, before the effects of the recession were felt. Donations to charities dropped by a total of 13.4 percent in 2008 and 2009, "Giving USA" said as it released new estimates for contributions in those years.

The 0.9-percent increase for educational institutions of all types in 2011 amounted $38.9-billion, in inflation-adjusted dollars. That followed a 4.3-percent increase in 2010. Like philanthropy over all in the wake of the recession, giving to education dropped a precipitous 18.4 percent in 2008 and 1.3 percent in 2009.

The drop in those years was largely caused by a 17.6-percent plunge in donations by living Americans, who provide more than 70 percent of all donations.

Interviews conducted in the past week with more than 40 charity officials and other fund-raising experts suggest that 2012 will not be any stronger for charitable giving than 2011 was. Uncertainty about the global economy, the presidential election, health-care policies, and taxes will cause many donors to hold off making big gifts this year, said Robert Sharpe, a fund-raising consultant in Memphis.

"The bleeding stopped in 2010," he said, "but the recovery is anemic."

Aid Groups Did Better

American charities that conduct development and relief work overseas were the only type of nonprofit group to outpace inflation by a significant percentage, at 4.4 percent, while donations to environmental causes increased by 1.4 percent after inflation. Giving to every other type of organization was either flat or declined.

Religious organizations suffered the biggest drop, with donations falling nearly 5 percent, in part because of a decline in the number of Americans who belong to churches, synagogues, or mosques, "Giving USA" said.

Educational institutions received 13 percent of all giving in 2011, a drop from 14 percent in 2010.

Among the other key findings:

  • Donations to foundations dropped by nearly 9 percent, to $25.8-billion. But that drop might not be as ominous as it appears for future grant making, "Giving USA" said, because affluent people seemed to be putting a lot of their money into donor-advised funds. The three biggest such funds had an average rise in donations of 77 percent last year, the report noted.
  • Contributions by living individuals were stagnant, at $217.8-billion.
  • Donations by corporations fell by more than 3 percent, to $14.6-billion last year, while foundations gave 1.3 percent less, at $41.7-billion.
  • Bequests were the only source of growth in donations last year, rising nearly 9 percent, to $24.4-billion.

A free executive summary of "Giving USA 2012" is available online. The full report costs $45.

Holly Hall is features editor at The Chronicle of Philanthropy.