According to the just-released Giving USA report, Americans gave $427.71 billion to charity in 2018. That’s almost the highest level of giving ever, second only to 2017.
It’s impressive, but it’s not much of a jump in real dollars and is actually a decline of 1.7 percent in inflation adjusted dollars.
Where does the money come from?
The Giving USA report tracks contributions from four main sources and their percentage of total giving:
While individuals still represent by far the majority of donations, their giving declined by 1.1 percent. This is the first year giving by individuals has fallen below 70 percent of the total since 1954.
Keep in mind that bequests are also donations from individuals and they held steady at 9 percent of the total.
The real bump was in giving by foundations which grew 7.3 percent, with gifts from community foundations growing by a whopping 10.2 percent.
Where is the money going?
The distribution of gifts stayed pretty much the same as last year. Religion and education took the largest shares, with health and human services and gifts to grantmaking foundations following close behind. As always, the arts and environment took a very small portion of the total.
A complex year for giving.
The Giving USA folks refer to 2018 as a “complex year for giving,” and they’re right. There are many factors that affect giving in any given year – personal income growth, stock market performance, and public policy. Perhaps the most important change in 2018 was in the tax laws that drastically reduced the number of households that itemize their returns. It’ll be a year or two more before we really know how these new laws will affect our fundraising results, but certainly we know that there is a reduced financial incentive for charitable giving for literally tens of millions of people who no longer itemize.
Amir Pasic, Ph.D., the Eugene Tempel Dean of the Lilly Family School of Philanthropy says, “Charitable giving is multi- dimensional … it is challenging to disentangle the degree to which each factor may have had an impact. With many donors experiencing new circumstances for their giving, it may be some time before the philanthropic sector can more fully understand how donor behavior changed in response to these forces and timing.”
What does it all mean for you?
Here are a few suggestions for how to use the Giving USA numbers:
Giving is not on the rise, so be careful about being overly optimistic! Of course, your projections should have more to do with your own history, trajectory, and investments, than with the national stats, but it’s important to keep an eye on the bigger trends for the occasional reality check.
The truth of where the money comes from hasn’t changed. Individuals’ direct giving through cash, securities and property may have declined as a portion of the overall total, but it still represents the biggest piece of the pie. Keep in mind that giving from foundations is on the rise and nearly half of foundations are family foundations (really, just individuals giving in another way). It’s well worth your time and investment to have a strong individual giving program, including a major gifts and family foundations focus.
It’s not uncommon for people new to fundraising to think that corporate giving should be a primary source of income and that planned giving isn’t worth the investment. One look at the Giving USA report should clear up those misconceptions right away! Here’s a handy-dandy infographic courtesy of Giving USA for you to share.
If donors are giving less because they don’t have a tax incentive to do so, it’s on us as fundraisers to give them a solid reason to give and give more.
Now, let’s get out there and make 2019 the biggest year ever!
Image by Tumiso from Pixabay.