Total U.S. charitable giving from all sources grew by 4.4 percent in 2013, nearing its all-time peak seen just prior to the Great Recession—despite a contraction of corporate giving for the year. According to Giving USA 2014, the annual benchmark report on charitable giving compiled by the Giving USA Foundation and its partners at the Indiana University Lilly Family School of Philanthropy, corporate donations dropped by 1.9 percent in 2013, a 3.2 percent decrease when adjusted for inflation. Fortunately for nonprofits, that drop was countered by moderate increases in giving from individuals (up 4.2 percent in current dollars), foundations (up 5.7 percent in current dollars) and bequests (up 8.7 percent in current dollars.)
Per the Giving USA 2014 data, corporations—which include businesses of all sizes—accounted for just about 5 percent of overall charitable giving in the United States for the year, which totaled nearly $335 billion. The drop in contributions followed a particularly strong year in 2012, when the sector increased its giving by almost 17 percent. And in fact, the report notes, giving by corporations has risen much faster than overall giving rates since the recession officially ended in 2009—at 19.4 percent for corporations versus 12.3 percent overall.
If anything, the numbers add clarity to the link between corporate profits and giving levels, said Gregg Carlson, chairman of the Giving USA Foundation, which publishes the report.
The decline “makes clear how closely linked economic factors are to giving. While the S&P 500 was strong in 2013, corporate profits slowed substantially compared with 2012,” Carlson said. “Corporate profits are directly linked with corporate giving.”
In regard to where the money is going—i.e., which types of groups are seeing donations rise—the Giving USA 2014 report shows that some sectors are attracting donors more than others, and it has a lot to do with the economic recovery taking shape.
“We see that giving to the arts, health, the environment and education has been consistently rising in the last three years,” said David King, chairman of The Giving Institute, the trade association that created Giving USA and its foundation.
“These types of organizations, perhaps with a slight exception for health, are those for which donors reduced their support during the recession when they tended to give to organizations serving what they may have perceived as more urgent needs, such as food pantries, homeless shelters and even international relief, but as the economy recovers, donors are restoring funding to those sectors in a strong way,” King said.
In another shift, donors appear to have soured somewhat on international affairs, as giving in that area dropped 6.7 percent—one of the few areas that saw a decline in 2013. According to the report, the drop is partly attributable to lower overall corporate giving (disaster relief is a favorite giving area for many companies). But another reason could be donors shifting their support to overseas organizations working in areas impacted by disasters—instead of donating to U.S.-based relief groups.
If the giving levels outlined in the Giving USA 2014 report hold steady—a possibility due to rising confidence in the nation’s economic outlook—total giving could recover to prior peak levels earlier than anticipated, according to Patrick Rooney of the Indiana University Lilly Family School of Philanthropy.
“In recent years, our school has projected that giving could take several years to return to pre-recession highs, based on the contemporary rates of growth in giving,” Rooney said. “This year, we are more optimistic. If total giving continues to grow at the current inflation-adjusted, two-year average rate of 4.2 percent, we estimate it would take just one to two more years to reach or surpass the pre-recession peak.”
That would mean giving totals growing by about $15 billion a year by 2015 or 2016.
For more information, go to www.givingusa.org.