Charitable giving reaches pre-recession peak

The headline from the Indiana University Lilly Family School of Philanthropy newsletter, “Giving USA: Americans Donated an Estimated $358.38 Billion to Charity in 2014; Highest Total in Report’s 60-year History,” is great news for our sector. Similar headlines in the Huffington Post, the New York Times and CNN reinforce the fact that Americans are very generous.

A report released this week by the Giving USA Foundation reports that Americans gave $358.38 billion to charity in 2014. That total just exceeds the last peak in 2007, when Americans donated $355.17 billion to nonprofits and is an all-time high since the Giving USA Foundation began its research 60 years ago.

Here’s a breakdown of the 2014 charitable giving from the report:

• Individual giving, $258.51 billion, increased 5.7 percent over 2013 and represented 72 percent of the total giving;
• Foundation giving, $53.97 billion, was 8.2 percent higher than 2013 and represents 15 percent of total giving;
• Corporations contributed 5 percent of the total, giving $17.77 billion, an increase of 13.7 percent; and
• Bequests, which represent 8 percent of all gifts, increased 15.5 percent.

The question many of us ask is why? Why did the growth happen?

Laura MacDonald, chair of the Giving USA editorial review board and founder of Columbus-based nonprofit consulting firm Benefactor Group, identified some of the factors behind this growth, including the rise of tech donors and “mega-gifts” that accounted for one-third of the growth in individual giving. And, while corporate donations continue to languish at less than 1 percent of pretax profit, individual giving rose to 2.1 percent of GDP, a height not seen since prior to the 2008 recession.

Giving USA 2105: The Annual Report on Philanthropy. Researched and written by Indiana University Lilly Family School of Philanthropy. Sponsored by Giving USA Foundation, a public service initiative of The Giving Institute.

She observed, “Almost every sector benefitted from the growth in giving, from religion to arts, from education to human service. While American donors’ interests may be diverse, it appears that our generosity is a shared value.”

But there might be another reason. Perhaps not only are donors able to be more generous, I think the charities are working harder and smarter, making sure their cases for support are sound and relevant. Grantmakers and nonprofits are finding a way to have meaningful conversations and are using new communication and evaluation tools.

Lucy Bernholz, one of my favorite writers in the philanthropy field, catches “Buzz Words” in action. A few she predicted in 2013 have certainly had an effect on how and why Americans give and may offer more insight into our “why” question. Could it be that we are using these Buzz Words concepts to make our field stronger?

Here’s the list – you decide:

• Social Impact Bond
• Collective Impact
• Storytelling
• Charitable Tax Reform
• Infographics
• Evidence-based
• Shapeshifting
• Disruption
• Amplify
• #

I’d love to know what you think! And watch for our own report on the state of charitable giving in Ohio, due out this fall.

Suzanne T. Allen, Ph.D.

Giving USA Numbers Just Released

On June 17, Giving USA published their 2014 Report and folks around the country gathered to review the data and talk about the implications. I was invited to be a part of the Cincinnati group by Jim Yunker, President & CEO of Smith Beers Yunker & Company, Inc., and after the presentation, I served on a panel with Jim Schwab from Interact for Health and Sr. Sally Duffy from Sisters of Charity. We talked about how the data impact the work we do and the trends we see ahead.

So let’s look at the data first:

From the Giving USA 2014 Report, we learn that charitable giving in the United States rose 4.4 percent to $335.17 billion last year; if the trends continue, pre-recession giving levels could be seen as early as 2015. The “Giving Pie” – the pie chart we all use to show categories of givers – is growing.

But as the data were broken down, it was clear who was responsible for last year’s increase in giving: the single largest contributors are still individuals. Charitable giving in this large section of the “Giving Pie” is an estimated $240.6 billion, and it rose 4.2 percent in 2013, an increase of $9.69 billion from 2012.

In addition to individuals, the parts of the “Giving Pie” also increased for bequests and foundations. Only giving by corporations declined slightly in 2013, the result of the slow rate of growth in pre-tax corporate profits in 2013, at 3.4 percent.

Taking a deeper look at the individual gifts, several very large gifts made by individuals, couples and estates in 2013 helped make this slice of “Pie” a bit larger. Large donations – gifts of $80 million or more – represented 1.3 percent of total giving. Interestingly, the majority of these large gifts were made from living Americans ($3 billion) and $1.3 billion came from bequests.

One of the fastest-growing beneficiaries of individual gifts was donor-advised funds. The Giving USA 2014 Report categorizes these types of funds as part of the public-society benefit classification, and as a category, it grew by 7 percent. This classification also includes advocacy groups, Jewish federations and United Ways.

However, individual gifts to private foundations dropped by 16.7 percent. This decline can be explained in a couple of ways: one way is that this does not connote a lack of interest, but that there is an inherent volatility in how affluent people form and fund their own foundations.

If you want a complete view of the Giving USA numbers, we’ll be posting to our website or you can purchase the full report by going to Giving USA’s website.

In our next blog, we’ll talk about how this data impacts you!

Suzanne T. Allen, Ph.D.

Ohio philanthropy programs develop tomorrow’s leaders

Youth philanthropy councils can be effective tools to grow the next generation of philanthropists in community foundations, as those who attended OGF’s workshop devoted to practical advice and resources for engaging youth in philanthropy found out this summer.

Today I’m talking with Ramona Grigsby, who for the past 14 years has led one of the state’s first youth philanthropy programs, the Youth Fund Advisory Committee at the Community Foundation of Greater Lorain County. The interview is part of a longer article in the current OGF Connection newsletter, which you can read online. We’re also updating our directory of youth philanthropy programs across the state and will release it online in the next few weeks.

Why did your foundation establish a youth in philanthropy program?
 In 1998 our Board of Directors chose to create an opportunity for youth in Lorain County to become directly involved in philanthropy. Led by the president of the board, they established an endowed youth fund, to be guided by an all-youth advisory committee. Students in grades 8-12 from the sixteen public school districts and several private schools in the county comprised the membership.  The foundation’s board believed that fully engaging youth was a new and extremely effective way of creating new philanthropists.

 It required trusting in a vision where empowered youth are given real responsibility over a sizeable amount of money. Teens are asked to make critical evaluations to determine which grant applications will be successful.  They learn to ensure the grantee reports at project’s end and accounts for the funding. Are there signs that we are making new philanthropists?  I believe we have some evidence.  Sometimes our students graduate and go off to college and tell us that they’ve joined a community service group on their campus. They talk about helping their group decide where to contribute their charitable efforts.

What is the secret to engaging youth?
Be real and be truthful. Being young doesn’t mean a student can’t learn about philanthropy, it only means s/he may not have encountered this information yet. Teens are generally eager to learn new things and are quick to prove they can do what is required of them. Keep your expectations high. Their manner of accomplishing a job may actually prove more innovative than you expected!  Over the last fourteen years I’ve watched high school seniors and juniors work closely with 8th and 9th graders to review grant requests.  The older students treat the younger ones with respect. The younger ones catch on quickly that they are encouraged to speak up and offer constructive comments. Allow humor to dot the landscape and food to break the attention lag at meeting’s half-time.  Be glad to see them . . . it will make their day.

Read more about what Ramona and others have learned from engaging young people in philanthropy and check out great resources if you’re thinking about starting a youth philanthropy program in your community.

Drop in donations noted

Donations to the country’s 400 largest charities dropped sharply last year, according to an article in the latest Chronicle of Philanthropy. The 11 percent decline is the steepest in the Chronicle’s two decades of research and much worse than the decline seen in 2001, the last big drop in charitable contributions.

The 11 percent figure, as an average always does, obscures the range of donations experienced last year. Among the 10 U.S. charities that raised the most money last year, one reported a decrease of 27 percent while another saw an increase of 18 percent.

Included in the list of 400 largest charities are 11 located in Ohio, including a few grantmaking foundations. Their experiences are as varied as the rest of the list, with some gains and losses reported.

Here at OGF we are in the midst of researching and writing our annual state of philanthropy report, which will provide a snapshot of Ohio’s foundations’ assets and giving data. We’ll preview the results of our research on November 10 at our annual conference closing lunch, open to nonprofits and grantmakers. The full report will be available online; check the website’s publications page and this blog for its release.