Healthier American economy, as measured by multiple indicators, was engine for 7.1 percent growth in charitable giving
Americans gave an estimated $358.38 billion to charity in 2014, surpassing the peak last seen before the Great Recession, according to the 60th anniversary edition of Giving USA released today. That total slightly exceeded the benchmark year of 2007, when giving hit an estimated inflation-adjusted total of $355.17 billion.
The 2014 total jumped 7.1 percent in current dollars and 5.4 percent when inflation-adjusted over the revised estimate of $339.94 billion that Americans donated in 2013, according to Giving USA 2015: The Annual Report on Philanthropy for the Year 2014.
In addition, 2014 marked the fifth year in a row where giving went up; the average annual increase was 5.5 percent in current dollars (3.4 percent when inflation-adjusted).
All four sources that comprise total giving -- individuals (72 percent of the total); corporations (5 percent); foundations (15 percent); and bequests (8 percent) -- upped their 2014 donations to America’s 1-million-plus charities, says the report, which is the longest-running and most comprehensive of its kind in America. Giving USA is published by Giving USA Foundation, which was established by The Giving Institute to advance philanthropy through research and education. The report is researched and written by the Indiana University Lilly Family School of Philanthropy.
“The 60-year high for total giving is a great story about resilience and perseverance,” said W. Keith Curtis, chair of the Foundation and president of Virginia Beach, Virginia, nonprofit consulting firm The Curtis Group. “It’s also interesting to consider that growth was across the board, even though criteria used to make decisions about giving differ for each source.”
Curtis said two examples illustrate the point: “Individual giving is affected by available disposable income at the household level, wealth and growth in the S&P 500. All three increased last year as did the amount people spent in general—not just on charitable donations. Corporate giving decisions, on the other hand, have historically been driven by changes in pretax profits and GDP. Other factors might be affecting how much they donate; time—and further research—will tell.
“With virtually every economic indicator that gets measured showing growth, I think it’s safe to conclude they played a large part in making 2014 a banner year for giving from every source,” he added.
2014 Charitable Giving by Source:
- Individual giving, $258.51 billion, increased 5.7 percent in current dollars (and 4.0 percent when inflation-adjusted) over 2013.
- Foundation giving, $53.97 billion, was 8.2 percent higher than 2013 (the increase was 6.5 percent when inflation-adjusted).
- Bequest giving, $28.13 billion, increased 15.5 percent (13.6 percent when inflation-adjusted) over 2013.
- Corporate giving, $17.77 billion, increased 13.7 percent (11.9 percent when inflation-adjusted) over 2013 giving.
“As we mark the fifth consecutive year of growth in total giving, it is also encouraging that all but one of the recipient categories saw generally healthy gains last year,” said Amir Pasic, Ph.D., dean of the school. “While circumstances vary from organization to organization, it appears that the nonprofit sector overall can at last focus on expanding giving rather than regaining lost ground.”
Observations about 2014 giving:
- Large gifts—$200 million or more—made large impact
“We saw several very large gifts greater than $200 million—a few were greater than $500 million and one was nearly $2 billion—in 2014,” said Patrick Rooney, Ph.D., associate dean for academic affairs and research at the school. “The majority of these ‘mega-gifts’ were given by relatively young tech entrepreneurs. These gifts are high-impact and are addressing many critical issues of our time, particularly medical research.”
- Jump in individual giving—5.7 percent—made greatest impact
The 5.7 percent more that individuals donated in 2014 over 2013 accounted for 58 percent of last year’s total growth in giving.
- Foundation giving on the rise; all three kinds upped 2014 gifts
Not only did total giving by foundations grow 8.2 percent in 2014, gifts from all three types—community, independent and operating—also went up. The annual changes in this category are influenced most by grants from independent foundations; their 2014 gifts were 7.8 percent higher than in 2013 and accounted for 74 percent of the category’s total.
Taking the long view on total charitable giving, Rooney noted that while total inflation-adjusted giving has grown beyond its prior peak, a bit of caution is warranted. “As three of the four sources of giving have not yet exceeded their previous peak levels, with only foundation giving reaching its prior high, it is still too early to tell if total giving will sustain above the pre-recession level.
“That being said, we are optimistic that giving will soon return to and exceed the high levels seen prior to the Great Recession across all categories analyzed in Giving USA,” he said.
2014 Charitable Giving to Recipients
The flip side of where charitable donations come from, of course, is where those gifts go. Giving USA’s research covers what happens within nine different categories of charities; here’s what 2014 looked like for each:
- Religion—at $114.90 billion, 2014 giving increased 2.5 percent in current dollars, and a modest 0.9 percent when adjusted for inflation.
- Education—giving increased to $54.62 billion, 4.9 percent more in current dollars than the 2013 total. The inflation-adjusted increase was 3.2 percent.
- Human Services—its $42.10 billion total was 3.6 percent higher, in current dollars, than in 2013. The inflation-adjusted increase was 1.9 percent.
- Health—the $30.37 billion 2014 estimate was 5.5 percent higher, in current dollars, than the 2013 estimate. When adjusted for inflation, the increase was 3.8 percent.
- Arts/Culture/Humanities—at an estimated $17.23 billion, growth in current dollars was 9.2 percent in 2014. When adjusted for inflation, the increase was 7.4 percent.
- Environment/Animals—The $10.50 billion estimate for 2014 was up 7.0 percent in current dollars, and 5.3 percent when adjusted for inflation, over 2013 giving.
- Public-Society Benefit—the $26.29 billion estimate for 2014 increased 5.1 percent in current dollars over 2013. When adjusted for inflation, the increase was 3.4 percent.
- Foundations—at an estimated $41.62 billion in 2014, giving grew 1.8 percent in current dollars and 0.1 percent when adjusted for inflation.
- International Affairs—the $15.10 billion estimate for 2014 decreased 2.0 percent, in current dollars, from 2013. The drop was 3.6 percent when adjusted for inflation.
In addition to the above, 2 percent of 2014’s total — $6.42 billion — went to individuals, largely through in-kind donations of medicine via patient assistance programs.
Six of the nine categories saw donations reach record highs last year when adjusted for inflation: religion, education, human services, health, arts/culture/humanities and environment/animals.
“It’s not only fantastic to see significant growth in total giving, it’s also encouraging that six types of nonprofits — two-thirds of the ones covered in Giving USA—reached historic high-water marks last year,” said David H. King, CFRE, president of Atlanta-based consulting firm Alexander Haas and chair of the Institute.
“While the overall growth is indicative of robust philanthropy to a wide spectrum of nonprofits and, thus, of all boats rising with the tide, we would be remiss to gloss over what is happening with giving to religion. Although 2014 donations reached a new high of $114.90 billion, and, as always, accounted for the largest percentage of donations, the fact is, this category is continuing its 30-year dramatic downward slide as a share of total giving. In fact, it has dropped from 53 percent of all donations in 1987 to 32 percent of the total in 2014.”
Giving to foundations, public-society benefit and international affairs has not yet returned to or surpassed peak levels. Una Osili, Ph.D., director of research at the school, said several notable trends affected donations to those three sectors.
“We found a dramatic slowing down of giving to support the largest national donor-advised funds in 2014. This may have slightly dampened giving to the public-society benefit subsector,” she said. “We also know that giving to some pass-through charities—those that redistribute their funds to other organizations—have seen little to no growth in recent years.”
When it comes to international affairs, “donors appear to be increasing their attention to domestic causes in recent years,” said Osili, “due to increased needs in the U.S. Additionally, giving to international affairs in 2014 may have been affected by the fact that there was not a major international natural disaster on the scale that we have seen in some recent years, which tends to influence giving to this category.
”The trend of very large gifts to foundations has been holding steady for the past few years, so giving to foundations is close to achieving a high point again,” Osili said. “Gifts to foundations peaked in 2007, when they reached an inflation-adjusted total of $43 billion. That year, several extraordinarily large gifts – including several higher than $500 million and one that exceeded $1 billion – factored into the total.”
Further observations about giving to recipients:
- Giving to religion’s decline over time as a share of the total reflects that fewer Americans currently identify with a religion, attend worship services or give to houses of worship. These effects have been noted among the Baby Boomer generation; younger age groups appear to be following the same path.
- Human services giving has increased annually since 2006, when adjusted for inflation. While growth has been modest in recent years, this category, which provides essential services to low-income households, youth and communities, continues to be of central importance to Americans when it comes to charitable donation decisions.
- Giving in two categories—arts/culture/humanities and environment/animals—saw the fastest growth last year among the nine; in addition, neither has seen a decline (in current dollars) since the end of the recession.
- Giving to education continues to be strong, and to higher education in particular. Included in its 2014 total are several multi-million dollar gifts, including two of more than $100 million. The latter supported medical research on university campuses.
“The 2014 growth among eight out of nine types of charitable organizations is good news for the philanthropic sector as a whole,” Curtis said. “The growth can be attributed, in part, to the ways charities have been working smarter during daunting times. Nonprofits increasingly are making sure they have strong cases for support, communicate frequently with donors and provide proof of the impact charitable gifts make.
“Now that there seems to be a bit of breathing room, I would encourage charities to continue all these good habits and ensure they remain ingrained as part of their organizational philosophy. If they do, success should continue.”
NOTES TO EDITORS
Members of the media can request 40-year data tables that show sources of contributions by year in current- and inflation-adjusted dollars and allocation of gifts by type of recipient category, also in current- and inflation-adjusted dollars. Data also are available showing total giving as a percentage of Gross Domestic Product, individual giving as a percentage of disposable income and corporate giving as a percentage of corporate pre-tax profits.
The requested citation for Giving USA is Giving USA 2015: The Annual Report on Philanthropy for the Year 2014, a publication of Giving USA Foundation, 2015, researched and written by the Indiana University Lilly Family School of Philanthropy. Available online at http://www.givingusa.org.
About Giving USA FoundationTM and The Giving Institute
2015 serves as a benchmark year for both Giving USA FoundationTM (www.givingusa.org) and the organization that created it, The Giving Institute (www.givinginstitute.org).
For the Institute, whose membership is comprised of consultants to nonprofits, 2015 marks 80 years since 11 firms created a trade association focused on ethical fundraising counsel. That mission remains, and its Code of Ethics is a model in the field.
The group’s public-service initiative—measuring and reporting on charitable giving in America—started with the first of 60 consecutive annual reports, known colloquially as Giving USA. The Institute formed Giving USA FoundationTM in 1985 to advance the research, education and public understanding of philanthropy.
Headquartered in Chicago, both the Foundation and the Institute anticipate continuing their respective—and linked—missions for decades to come.
How to Obtain Giving USA 2015
Giving USA 2015: The Annual Report on Philanthropy for the Year 2014, will be available for download June 16, 2015, at http://www.givingusa.org/. A complimentary executive summary, Highlights, also will be available on that date.
Customers can select from a number of Giving USA 2015 products, including the full report, available in both digital and paperback formats; a PowerPoint slide deck; the data tables; and the free Highlights executive summary.
Giving USA FoundationTM periodically publishes in-depth reports (Spotlights) on different aspects of charitable giving and fundraising trends. Visit www.givingusa.org for available topics; prices vary.
About the Indiana University Lilly Family School of Philanthropy
The Indiana University Lilly Family School of Philanthropy is dedicated to improving philanthropy to improve the world by training and empowering students and professionals to be innovators and leaders who create positive and lasting change. The school offers a comprehensive approach to philanthropy through its academic, research and international programs and through The Fund Raising School, Lake Institute on Faith & Giving and the Women’s Philanthropy Institute.
Giving USA Methodology
Giving USA estimates primarily rely on econometric methods developed by leading researchers in philanthropy and the nonprofit sector and are reviewed and approved by the members of the Giving USA Advisory Council on Methodology (ACM). Members of the ACM include research directors from national nonprofit organizations, as well as scholars from such disciplines as economics and public affairs, all of whom are involved in studying philan¬thropy and the nonprofit sector.
The Indiana University Lilly Family School of Philanthropy prepares all of the estimates in Giving USA for Giving USA Foundation. Giving USA develops estimates for giving by each type of donor (sources) and for recipient organizations categorized by subsectors (uses). Most of Giving USA’s annual estimates are based on econometric analyses and tabulations of tax data, economic indicators and demographics. Data for giving by foundations come from the Foundation Center.
Current Giving USA estimates are developed before final tax data, some economic indicators, and some demographic data are available. The estimates are revised and updated as final versions of these data become available. Final estimates are usually developed two to three years after their initial release.
For more specific details on Giving USA’s methodology, please refer to the “Brief summary of methods” section within Giving USA 2015 or contact the Indiana University Lilly Family School of Philanthropy at firstname.lastname@example.org or 317-278-8972.