Giving USA Insights

The annual Giving USA report was released this week.  At a session this morning, Pittsburgh nonprofits were lucky to hear in-person insights from Dr. Patrick M. Rooney, the new Executive Director at The Center on Philanthropy at Indiana University.  Here are some highlights:

  • Total giving dropped 5.7% (adjusted for inflation) from 2007 to 2008.  Rooney noted the good news is that this decline is far less than stock market and job losses last year.  And, the total amount given ($307.65 billion in 2008) is still much higher than the amounts in the 1990s.  On the downside, giving has been rising on average 4.3%, so we’re down 10% from normal.
  • Foundations gave 13% of the contribution total.  At least 40% of that grantmaking was from family foundations, so that part could be also lumped together with direct giving by individuals.
  • Bequests were 7% of the gift value last year.  Rooney said that death rate of members of the top 300 richest families influences bequest giving more than any other factor.
  • Giving to foundations dropped 22% (in inflation-adjusted dollars) from 2007 to 2008 – the largest drop of any sector after a big run up of giving to foundations over the past decade.  Giving to human services organizations dropped 15.9%.  Health, education, arts, and environment giving dropped 9-10% each.  Rooney speculated (based on economic theory) that some donors may give less to health and human services because the government is seen as doing more in these areas.   
  • Personal income, GDP, corporate income, and the stock market are all key drivers of the rates of giving, and unfortunately those figures don’t look great for 2009.
  • The Center on Philanthropy’s research showed that President Obama’s current tax proposals would reduce giving by those earning $250,000 or more by 4.7%
  • Giving as a percentage of Gross Domestic Product has averaged around 2% over the past 40 years – basically stagnant.  Rooney said the most important question nonprofits and fundraisers face is, “What is the value-added proposition the nonprofit sector would have to offer to grow that figure from 2% to 5%?”
  • Lastly, Rooney noted that a separate study showed that about 85% of households made a charitable gift at least once in three years and 56% of them gave in all three years.   Giving rates per household (adjusted for income, education, and inflation) are similar across generations and across races and ethnicities.

(The Chronicle of Philanthropy also ran a great online discussion today with a team from the Giving USA Foundation, with the results available for free here.)

The take-away?  The short-term numbers are sobering but the long-term numbers and outlook are positive.  Im using them as a reminder of the importance of consistent, honest discussions between nonprofits and donors or funders about mutual hopes for meaning and impact.