Unraveling Development: Giving USA 2009, the Annual Report on Philanthropy

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Are you ready for a great gift?

Wonderful and useful information for any organization, all fundraisers, every board member. Nicely packaged in an easy-to-read book. Well summarized in an annual article in The Chronicle of Philanthropy.

What gift am I talking about? Giving USA 2009: The Annual Report on Philanthropy for the Year 2008.

For more than 50 years, the Giving USA Foundation (formerly the AAFRC Trust for Philanthropy) has given you and me and our organizations this great gift. You can read the research findings on the web. Wait for the article(s) in The Chronicle of Philanthropy.

Share the highlights with your staff colleagues, your fund development committee and your board of directors. Discuss the trends and talk about the implications for your organization. Figure out how you can use this information to develop your fund development plan and motivate your volunteers.

Here’s just the tip of the iceberg of great information:

  • Estimated total giving in 2008 (from individuals, corporations, and foundations) was$307.65 billion, a decrease of 2% (-5.7% adjusted for inflation) compared with the revised estimate of $314.07 billion given in 2007.
  • This is the first decline in giving since 1987 – and only the second since Giving USA began in 1956.
  • Individuals (living or dead) gave an estimated $251.94 billion, representing 82% of total gifts. (Making bequests in one’s will is an important source of charitable gifts.)
  • Corporations, always the lowest source of gifts, gave an estimated $14.50 billion, or 5% of the total.
  • Foundations gave an estimated $41.21 billion, or 13% of the total.

Where does the money go? Where are these donors giving their gifts?

  • 35% ($106.89 billion) was given to religion
  • 13% ($40.94 billion) was given to education
  • 9% ($25.88 billion) was given to human services
  • 7% ($21.64 billion) was given to health

Go to the source to see how much was given to other types of nonprofits, for example: environmental and animal organizations, arts and humanities, and so forth.

No surprise that the economy has negatively affected charitable giving. When there’s a more robust economy, giving typically increases – and sadly, the opposite holds true. But research shows that charitable giving doesn’t decrease as badly as the economic downturn. People still care, so do foundations and corporations.

Giving USA notes: “The recession that began in December 2007 continued into 2009, and many charity leaders are planning for the possibility that giving in the second year [e.g., 2009] will be even lower than in the first year of the downturn.”

Here’s an interesting tidbit: Giving has increased over the past 40 years – and foundations have been giving an increasing share of the total and individuals a smaller share. Why? Because of the growing number of family foundations and the increasing assets that these family foundations hold.

Another interesting tidbit: Bequest gifts have been a smaller portion of the total since 1973 – because people want to give while they are alive. Donors cherish the giving experience.

How does charitable giving compare to gross domestic product (GDP) in the U.S.? Giving in 2008 is estimated to be 2.2% of GDP, a slight decline from the high of 2.4% in 2005. (Somehow, it seems like we could give a higher percentage of GDP to charity. Or is that just my warped view?)

Charitable giving by households was 2.4% of disposable (after-tax) personal income in 1968. Giving fell to 1.5% of disposable personal income in 1998 and then rose to 2.2% by 1998. And that’s where we are today: charitable giving is 2.2% of disposable personal income. (Another warped view of mine: I’m thinking that we could give more. Do you ever calculate what percent of your disposable income you give to charity? I do. Years ago, the Independent Sector had a campaign urging us all to “Give 5”: Give 5% of our disposable income to charity; give 5 hours per week to volunteer – or maybe 5 hours per month. I don’t remember.)

In addition to paying for what we have to pay for – the essentials – households also spend on “luxury” items. Luxury expenditures include restaurant meals, travel, jewelry, recreation, and so forth. Giving was 19.9% of these luxury expenditures in 1968, and 17.6% in 2007, the most recent year for available data.

There’s lots more information for you to check out.

How do you use this information? How can Giving USA information help you and your organization?

Here are some ideas:

  • Convince your organization to launch (or strengthen) its individual giving program. That’s where most gifts come from, individuals like you and me and Bill and Melinda. But mostly individuals like you and me.
  • Urge caution in planning budgets for the next couple years. It will take time for charitable giving to feel the negative effects of the economic recession – and it will take time for giving to rebound.
  • Explain to your donors what the national experience is for charities during a recession. Explain your own specific situation. Be sensitive to what’s happening with your donors – but still ask them for money.
  • Accept the reality that corporate giving represents the smallest source of charitable gifts in the study – and way less than corporations are allowed to give according to the law. And if you count on employee matching-gift programs, Giving USA reports that companies are cutting back.
  • Read the special section on legislative issues in Giving USA. There might be some tips for you.

And mostly, reading the highlights from Giving USA is just what professionals do. Professionals stay in touch with the research in their sector. Professionals read and read and read more – and then have insights about how to use the information.

  • Melissa Brown

    Thanks for the great article!

  • Simone Joyaux

    You’re most welcome, Melissa. Giving USA is a very useful tool for nonprofits – even nonprofits outside the US. The research data, the topics, the questions raised….Keep up the good work. And nonprofits out there, read this annual report!

  • Sarah C

    I really enjoyed your writing style. It made me smile!

    I very much agree that we can all give more. I think helping donors feel connected with the cause will certainly help. I’m excited about the strides being made with social media.

    NYU M.S. Fundraising and Grantmaking Student