For more on these issues and others surfaced in the Giving USA 2018 report, please join NPQ on Monday, June 18th at 2pm ET for a free webinar in which we’ll discuss the trends in giving over this tumultuous year. NPQ’s Ruth McCambridge will be joined by Patrick Rooney, Professor of Economics and Philanthropic Studies and the Executive Associate Dean for Academic Programs at the Indiana University Lilly Family School of Philanthropy, and Aggie Sweeney, the Chair of Giving USA Foundation and Senior Counsel at Campbell & Company. Click here to register!
Editor’s Note: All the Giving USA figures cited here have been adjusted for inflation.
The Giving USA 2018 report is out and, as expected, annual total giving last year was up by an inflation-adjusted three percent to $410.02 billion—a record, although contributions as a percentage of GDP continued to hover at around two percent. Many factors likely contributed to this, including a rising stock market and an ever-widening wealth gap.
What this means in the long run for most nonprofits is hard to say. Wealthy people generally give in different patterns than the rest of us, but in 2017, every nonprofit category saw significant increases except for international affairs, which fell 6.4 percent, and religion, which rose only 0.7 percent. Still, in our estimation, the surface numbers may hide a longer-term problem: More and more dollar donors are flowing into repositories like foundations and donor-advised funds, where some or all of it will be held for an extended period of time before it gets to a working nonprofit.
Part of this is due to the growth of high dollar and mega-gift givers. The report reveals that:
- For 2016, Giving USA added $1.495 billion in mega-gifts made by individuals and $400 million in mega-gifts made by bequest.
- For 2017, Giving USA added $4.1 billion in mega-gifts made by individuals and $850 million in mega-gifts made by bequest.
It should be mentioned that the floor above which a gift is defined as a mega-gift changes year over year. In 2016, it took $200 million to qualify as a mega-gift; in 2017, that number jumped to $300 million—thus narrowing the range—and still the value of mega-gifts more than doubled. The names of many of those donors are familiar: Mark Zuckerberg and Priscilla Chan gave a cool $1.9 billion to the Chan Zuckerberg Foundation; Florence Irving gave $600 million to Columbia University; Michael Dell gave a billion to his foundation; and Henry Hillman’s estate donated $800 million to the eponymous family foundation in Pittsburgh. Many of these gifts, again, are currently parked at intermediaries. The Chronicle of Philanthropy estimates that mega-gift category differently, for a total of $10.3 billion. Still, whichever numbers you accept, the dollar amount has more than doubled. Giving to foundations is up by 13.1 percent, too.
At the same time, corporate giving has apparently increased by eight percent, though as a proportion of pretax profits—which are, themselves, are at near-record levels—it is nowhere its peak. In 1986, this ratio was at two percent, but now it is less than half that, even though profits have grown almost tenfold.
Corporate giving as a percentage of pre-tax corporate profits, 1977-2017
(in billions of current dollars)
| Year | Corporate giving | Corporate pre-tax profits | Corporate giving as percentage of pre-tax profits |
| 1977 | 1.54 | 211 | 0.7 |
| 1978 | 1.70 | 246 | 0.7 |
| 1979 | 2.05 | 272 | 0.8 |
| 1980 | 2.25 | 254 | 0.9 |
| 1981 | 2.64 | 244 | 1.1 |
| 1982 | 3.11 | 199 | 1.6 |
| 1983 | 3.67 | 234 | 1.6 |
| 1984 | 4.13 | 269 | 1.5 |
| 1985 | 4.63 | 257 | 1.8 |
| 1986 | 5.03 | 246 | 2.0 |
| 1987 | 5.21 | 323 | 1.6 |
| 1988 | 5.34 | 390 | 1.4 |
| 1989 | 5.46 | 390 | 1.4 |
| 1990 | 5.46 | 412 | 1.3 |
| 1991 | 5.25 | 425 | 1.2 |
| 1992 | 5.91 | 474 | 1.2 |
| 1993 | 6.47 | 519 | 1.2 |
| 1994 | 6.98 | 599 | 1.2 |
| 1995 | 7.35 | 684 | 1.1 |
| 1996 | 7.51 | 741 | 1.0 |
| 1997 | 8.62 | 802 | 1.1 |
| 1998 | 8.46 | 728 | 1.2 |
| 1999 | 10.23 | 766 | 1.3 |
| 2000 | 10.74 | 747 | 1.4 |
| 2001 | 11.66 | 691 | 1.7 |
| 2002 | 10.79 | 789 | 1.4 |
| 2003 | 11.06 | 969 | 1.1 |
| 2004 | 11.36 | 1,255 | 0.9 |
| 2005 | 15.20 | 1,653 | 0.9 |
| 2006 | 14.52 | 1,851 | 0.8 |
| 2007 | 14.22 | 1,748 | 0.8 |
| 2008 | 12.40 | 1,382 | 0.9 |
| 2009 | 13.79 | 1,473 | 0.9 |
| 2010 | 15.82 | 1,841 | 0.9 |
| 2011 | 15.58 | 1,807 | 0.9 |
| 2012 | 17.22 | 2,131 | 0.8 |
| 2013 | 15.86 | 2,156 | 0.7 |
| 2014 | 18.26 | 2,249 | 0.8 |
| 2015 | 18.44 | 2,159 | 0.9 |
| 2016 | 19.24 | 2,159 | 0.9 |
| 2017 | 20.77 | 2,248 | 0.9 |
Notes: Corporate pre-tax profits data from “Corporate Profits Before Tax by Industry,” Table 6.17D, Bureau of Economic Analysis, retrieved April 2018 from http://www.bea.gov/iTable/index_nipa.cfm. All figures are rounded. See the “Brief summary of methods used” section of the full report for explanation for the revisions made to Giving USA data for years prior to 2017.
Any use of this data requires the following full citation: Giving USA 2018: The Annual Report on Philanthropy for the Year 2017. Researched and written by Indiana University Lilly Family School of Philanthropy. Sponsored by Giving USA Foundation, a public service initiative of The Giving Institute. © 2018 Giving USA Foundation™
All of this suggests what we already know—namely, that the super-rich are doing very well, thank you very much, and a lion’s share of these mega-gifts are now parked in foundations…which is, you will notice, the only category of giving that went up by double digits, at a 13.1 percent increase.
Additionally, gifts to public-society benefit corporations, which includes donor-advised funds, went up by 5.5 percent. While that grouping also includes United Way giving, we already know that donor-advised fund giving is growing at an accelerated rate while United Ways as a field are seeing declines. The 2017 increases for donor-advised funds, therefore, are likely higher than 5.5 percent, which would be no surprise given the growth at year’s end in anticipation of changes in charitable giving deductions.
The problem there is that United Ways would generally give out the money they raised within the year, while donor-advised funds have a payout rate each year of 15 to 20 percent. And, of course, foundations pay out more in the range of five percent. Thus, the amount of money going into foundations and donor-advised funds may mitigate what nonprofits experience in their budgets relative to the numbers overall, and much of that money is still under the control of the donor, since most are living.
2017’s Charitable Giving by Source:
⇑ Giving by individuals totaled an estimated $286.65 billion, rising 5.2 percent in 2017 (an increase of 3.0 percent, adjusted for inflation).
⇑ Giving by foundations increased 6.0 percent, to an estimated $66.90 billion in 2017 (an increase of 3.8 percent, adjusted for inflation). Data on foundation giving are provided by the Foundation Center.
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⇑ Giving by bequest totaled an estimated $35.70 billion in 2017, increasing 2.3 percent from 2016 (a 0.2 percent increase, adjusted for inflation).
⇑ Giving by corporations is estimated to have increased by 8.0 percent in 2017, totaling $20.77 billion (an increase of 5.7 percent, adjusted for inflation).
Recipients of 2017’s Charitable Giving:
⇑ Giving to religion increased 2.9 percent (0.7 percent adjusted for inflation), receiving an estimated $127.37 billion in contributions.
⇑ Giving to education is estimated to have increased 6.2 percent (4.0 percent adjusted for inflation) to $58.90 billion.
⇑ Giving to human services increased by an estimated 5.1 percent (2.9 percent adjusted for inflation) totaling $50.06 billion.
⇑ Giving to foundations is estimated to have increased by 15.5 percent (13.1 percent adjusted for inflation) to $45.89 billion, based on data provided by the Foundation Center.
⇑ Giving to health organizations is estimated to have increased by 7.3 percent (5.1 percent adjusted for inflation) to $38.27 billion.
⇑ Giving to public-society benefit organizations increased an estimated 7.8 percent (5.5 percent adjusted for inflation) to $29.59 billion.
⇑ Giving to arts, culture, and humanities is estimated to have increased 8.7 percent (6.5 percent adjusted for inflation) to $19.51 billion.
⇓ Giving to international affairs is estimated to have declined 4.4 percent (6.4 percent adjusted for inflation) to $22.97 billion.
⇑ Giving to environment and animal organizations is estimated to have increased 7.2 percent (5.0 percent adjusted for inflation) to $11.83 billion
Giving USA uses the Consumer Price Index to calculate inflation, 2017= $100. All figures are rounded.
We asked Patrick Rooney, professor of economics and philanthropic studies, and the executive associate dean for academic programs at the IU Lilly Family School of Philanthropy, if he could explain the decline in giving to international affairs, and he said the hypothesis is that donors from the United States respond to natural disasters abroad but not to disasters that result from the deeds of man. We also asked Rooney for prognostications for giving in general over the next few years, and though he was characteristically hesitant to go out on a limb, he believes it may take two or three years to see the real impact of the tax bill signed into law last December, either on disposable income in general or on giving at high-dollar levels.
In general, it is hard for NPQ to compartmentalize giving from the equity profile of the rest of the economy. The fact that mega-gifts are ever more grandiose and corporate giving as a proportion of pretax income is less than half of what it was in 1986 when those profits were a tenth of what they are today tempers any celebratory feelings.
