Big Gifts in Tough Times

Million-dollar-plus gifts from individuals dropped significantly in the second half of 2008, but gifts from foundations increased.

Unemployment was on the rise, the stock market was plummeting, the economy was in a recession, and $1 million-and-above charitable giving took a hit. The total number of charitable gifts at that level dropped 37 percent over the course of the year—and individual gifts of the same type dropped by nearly 50 percent in the last two quarters.

That was in 2001, and if giving history were certain to repeat itself, the economic conditions in the last half of 2008 promised an even steeper nosedive in million-dollar-plus gifts.

“We know very large gifts are driven by wealth, not income,” says Melissa Brown, associate director of research at the Center on Philanthropy at Indiana University. “And when wealth is reduced as it has been with recent market plunges, we realized that there was the possibility of charitable giving at this level feeling a similar impact as in 2001.”

It didn’t happen.

In 2008, the number of million-dollar-plus gifts from individuals did plunge by 33 percent in the last half of 2008 compared to the same period in 2007—and by 40 percent in the last quarter alone. But for all of 2008 the total number of gifts of $1 million or more—including those from foundations, corporations, and bequests—increased 3.6 percent from the previous year, according to findings from the Center on Philanthropy’s Million Dollar List™.

“It just astonished me that so many people and organizations continued to make six- and even seven- and eight-figure gifts,” says Brown. “I was very surprised because I know what happened in 2001 and the total number sank.”

Foundations are largely responsible for the overall increase. In the last quarter of 2008, the number of foundation gifts increased by 42 percent from the previous quarter and by 13 percent from the fourth quarter of 2007.

What does this tell us? “It says that giving is important. Philanthropy is important,” says Brown. “It helps people get through tough times. It says that strengthening nonprofits and creating new foundations for long-term or future problems matter, even in this economic climate.”

Trends in Seven-Figure-and-Up Giving

Since 1999, the Center has been tracking gifts of $1 million or more reported in the news media. The Million Dollar List™ is not a comprehensive record of all million-dollar-plus gifts—some are not publicly announced—but it does illuminate giving trends at that level.

Brown notes that higher education institutions are very systematic in reporting their gifts, and claim a large portion of total gifts on the Million Dollar List™. Historically, about one-third to one-half of the total number and dollar value of million-dollar-plus gifts go to universities to support research and to create endowment-level support for schools and programs. In the fourth quarter of 2008, for example, higher education received 62 percent of the total dollars given, followed very distantly by other educational institutions (6 percent), health organizations (6 percent), and arts organizations (4 percent).

But Brown is careful to emphasize that donations at that level touch every nonprofit subsector.

“Human services organizations tend to think that they can’t attract these donors, but it’s not true,” says Brown. “You have to make sure that people know what you’re doing and have a chance to get excited about it.”

“Nonprofits have a responsibility to give people a chance do with their money what they think is important.”

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