IU Center on Philanthropy study examines charitable giving in America

Individual giving up, corporate giving down

The only annual research publication about all sources of charitable giving in the United States, Giving USA is published by the AAFRC Trust for Philanthropy and researched and written by the Center on Philanthropy at Indiana University. Created in 1955 by the American Association of Fundraising Counsel (AAFRC), Giving USA is offered as a public service by the association and its affiliate, the AAFRC Trust for Philanthropy.

The 2001 giving total is an increase of 0.5 percent over the $210.89 billion now estimated for total giving in 2000. Adjusted for inflation, giving in 2001 is a decrease of 2.3 percent compared to the previous year.

"Research shows that giving is closely tied to the economy. Not surprisingly, giving in 2001 fits the pattern that we have seen during previous recessions," Arnoult said. "In six of the eight recession years since 1971, giving dropped by 1 to 5 percent when adjusted for inflation. Despite fears last fall that giving might decline precipitously, in fact, the change in giving in 2001 falls within the normal range for a recession year."

When economic indicators grow more slowly or fall, so does the rate of growth in giving. In 2001, personal income, one of the most critical indicators, grew at the slowest rate (inflation adjusted) since 1993. The stock market and corporate pretax profits fell. The volatility of the capital markets, the drop in corporate profits, and the slow growth in personal income all influenced giving in 2001.

The 0.5 percent rate of growth in giving in 2001 was lower than the 6 percent increase in 2000. The increase seen in 2000 was a more typical rate of growth after four years of extraordinarily high (above 10 percent) growth.

In spite of the recession, charitable contributions in 2001 stayed above 2.0 percent of Gross Domestic Product (GDP). This is comparable to the economic boom years in the late 1990s, when giving as a share of GDP rose to levels not seen since 1973.

"Americans' commitment to philanthropy remained strong even in the face of downward economic pressures. The $212 billion total is the highest level of giving ever reported. Even adjusted for inflation, the total is the second-highest on record. Once again giving sustained a string of increases each year since 1955 except for 1987," according to John J. Glier, chair of the American Association of Fundraising Counsel.

"People are more aware than ever of the role philanthropy plays in our lives and communities," said Gene Tempel, executive director of the IU Center on Philanthropy, which researches and writes Giving USA. "Giving USA estimates are important information about this vital dimension of our society and about the gifts that enable charitable organizations to fulfill their missions."

Four sources of giving are tracked by Giving USA: gifts from living individuals; gifts made through bequests; gifts from corporations and corporate foundations; and grants from foundations.

• In 2001, individual donors gave an estimated $160.72 billion, up 1.1 percent from the revised estimate for 2000. Adjusted for inflation, the change is a drop of 1.7 percent. Giving by individuals represents 75.8 percent of all giving estimated for 2001.

• Bequest giving is estimated at $16.33 billion for 2001. This is a drop of 4.5 percent (a decrease of 7.1 percent adjusted for inflation). Bequest gifts are 7.7 percent of total giving in 2001.

• Corporate giving fell an estimated 12.1 percent (a decrease of 14.5 percent adjusted for inflation). Corporate charitable contributions, including grants made by corporate foundations, are estimated to be $9.05 billion in 2001. This represents 1.3 percent of corporate pretax profits. Corporate contributions are 4.3 percent of all giving in 2001.

• Foundation grants (excluding corporate foundations) are estimated by The Foundation Center at $25.90 billion in 2001. This is an increase of 5.4 percent (2.5 percent adjusted for inflation). Non-corporate foundations include independent, community, and grantmaking operating foundations. Foundation giving is 12.2 percent of total contributions in 2001.

• Gifts made to relief and recovery after Sept. 11 came to slightly less than 1 percent of the total estimated $212 billion in contributions. Giving USA estimates that a total of $1.88 billion was received by the major national September 11 relief funds as of the end of 2001.

• Gifts by individuals to causes related to Sept. 11 are estimated at $1.25 billion. Corporate gifts paid in 2001 for Sept. 11 relief are estimated at approximately $410 million. Foundation grants paid in 2001 for relief are estimated to be approximately $195 million. Amounts for future gifts pledged by corporations and foundations in 2001 for Sept. 11 relief are not included in these estimates.

• Most of the major national organizations collecting relief donations were in the human services subsector, which received more than $1 billion in response to Sept. 11. The other subsector that received a substantial portion of the total estimated amount contributed for Sept. 11 relief is public-society benefit (including combined appeals such as United Way and Jewish federations and other organizations), which reported approximately $578 million. Contributions also were made to scholarship funds in education; religious organizations; and international affairs agencies.

• While Sept. 11 relief funds received 0.9 percent of giving in 2001, and the increase in total giving over 2000 is 0.5 percent, it is not accurate to conclude that the increase in the total is because of giving for September 11 relief.

http://www.aafrc.org/trust/charts.html