US Philanthropy Reaches $373 Billion

By Laurence A. Pagnoni, MPA

Charitable giving in the USA reached a record high for the second year in a row, according to the newly released Giving USA 2016: The Annual Report on Philanthropy for the Year 2015, a publication of Giving USA Foundation, researched and written by the Indiana University Lilly Family School of Philanthropy.

Researchers estimate that giving totaled $373.3 billion in 2015 up 4 percent from the previous year, according to estimates from “Giving USA,” an annual report on American philanthropy.

International-affairs organizations saw the largest growth in donations, with their collections rising by 17.4 percent to $15.8 billion, largely due to the Nepal earthquake, the Syrian-refugee crisis, and other high-profile humanitarian disasters.

Education giving grew by 8.8 percent, the second-biggest jump, reaching $57.5 billion, according the report released Tuesday by the Giving USA Foundation. Donations to arts, culture, and humanities groups rose 6.8 percent, while giving to environment or animal-welfare issues increased 6.1 percent.

That new peak in contributions represents a record level whether measured in current or inflation-adjusted dollars. In 2015, total giving grew 4.1 percent in current dollars (4.0 percent when adjusted for inflation) over 2014.

The revised inflation-adjusted estimate for total giving in 2014 was $359.04 billion, with current-dollar growth of 7.8 percent, and an inflation-adjusted increase of 6.1 percent.

Charitable contributions from all four sources — individuals, charitable bequests, corporations, foundations — went up in 2015, with those from individuals once again leading the way in terms of total dollar amount, at $264.58 billion. This follows the historical pattern seen over more than six decades.

Giving to eight of the nine nonprofit categories studied grew with only giving to foundations declining (down 3.8 percent in current dollars, down 4.0 percent adjusted for inflation).

Giving to the category of International Affairs — $15.75 billion — grew the most (up 17.5 percent in current dollars, up 17.4 percent adjusted for inflation).

Giving to the category Arts/Culture/Humanities — $17.07 billion — grew the second most (up 7.0 percent in current dollars, up 6.8 percent adjusted for inflation).

Fundraiser Mike Rosen says that “While the 2015 giving news is certainly positive, there are four points that indicate that the good news might be short lived. He points to four worrisome trends as follows:

  1. Slowing Growth Rate. The rate of growth in giving slowed in 2015. In 2014, we saw inflation-adjusted growth of 6.1 percent while the growth rate in 2015 was just 4.0   percent. We may be seeing the start of a new trend.
  2. Correlation to GDP. Once again, charitable giving correlates to Gross Domestic Product. In both 2014 and 2015, giving stood at 2.1 percent of GDP. Since 2000, giving has been between 1.9 and 2.2 percent of GDP. In other words, when the overall economy grows, philanthropy grows; when the overall economic growth rate slows, so does philanthropic growth. With anemic GDP growth in 2016, we can expect anemic philanthropic growth unless the economy heats up in the second half of the year.
  3. Decline in Volunteerism. In 2004, 28.8 percent of Americans volunteered. In the following decade, the percentage of Americans who volunteered dropped down to 25.3 percent of the population. While the percentage of Americans who volunteer remains good, the downward trend is worrisome. There is a correlation between    volunteerism and giving. For example, people who volunteer but do not make current donations are more than twice as likely to make a charitable bequest gift as     people who neither donate nor volunteer.
  4. Tougher Competition for Donors. Between 2014 and 2015, the US saw a 6.0 percent increase in the number of 501(c)3 nonprofit organizations. That means that the      4.0 percent inflation-adjusted growth rate in philanthropy did not even keep pace with the growth rate of charitable organizations. In other words, fundraisers are facing greater competition for a pool of philanthropic resources that is not keeping pace with demand.

Mr. Rosen suggest three things you can do to help ensure your organization has the philanthropic resources necessary to fulfill its mission:

  1. Have a monthly giving program.
  2. Work on improving your organization’s donor retention rate.
  3. Start or grow your planned giving program. In 2015, 9 percent of charitable giving came through bequests. What percentage of contributions to your organization came from bequests? If it was less than 9 percent, you have some work to do in this area.

To purchase your copy of the full report, visit the Giving USA store by clicking here.

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