American Giving Again Exceeds $300 Billion

June 2010

Annual Charitable Giving Again Exceeds $300 Billion

By David Hinsley Cheng

"U.S. charitable giving falls 3.6% in 2009 to $303.75 billion" and for the third straight year exceeded $300 billion. That's how the most recent report began on giving, unveiled by Giving USA, a publication for Giving USA Foundation.

The figures that were just released several days ago were widely anticipated by many in the nonprofit community. For much of 2009, we all heard about many campaigns making significant downward adjustments, layoff of staff at all levels, massive losses to endowments, and so on. It seemed at times that organizations were bracing themselves for a worst-case scenario brought about by the downward spiraling economy.

From this most recent report, we take heart, however in knowing that in times of adversity, Americans are still digging deep and supporting important causes. In fact "using models we have developed, we estimate that the human services, health, international aid and environment/animals subsector saw increased contribution" said Patrick M. Rooney, Ph.D., executive director of the Center on Philanthropy. "This focus on vital needs is consistent with what historians tell us happened during the Great Depression."

Some key findings from the 2010 Giving USA Report include:

Individual giving fell an estimated 0.4% in 2009, to $227.41 billion (this equates to a 0.0% change in inflation adjusted dollars). Many news reports and polls suggested that individual contributions increased toward the end of the year, as stock market indices rose and as media coverage highlighted the needs faced by charitable organizations.

Foundation grantmaking by private, community, and operating foundations was $38.44 billion, according to the Foundation Center, falling by 8.9%. This is a less severe drop than foundations anticipated when the Foundation Center surveyed them early in 2009.

Corporate giving rose to an estimated $14.1 billion, up 5.5%. This unexpected bounce takes corporate giving to within 1% of its pre-recession level. According to at least two reports (Committee Encouraging Corporate Philanthropy and Community Foundation of Silicon Valley), corporations increased their in-kind donations, which are less affected by recessions. This shift explains at least some of that growth.

The subsectors that saw declines in giving tended to be those that are more likely to receive gifts through capital campaigns, contributions to endowments, and donations of art and property. These include education, grantmaking foundations, and arts and cultural organizations.

Giving to religion, at 33% of total giving, remains the largest share of all contributions, with an estimated $100.95 billion. The estimated decline in giving to religion was 0.7%.

Giving to education declined to an estimated $40 billion, a drop of 3.6% reflecting the second consecutive year that giving to education has declined.

Giving to private and community foundations dropped to $31 billion, a decline of 8%.

Giving to human services grew 2.3% to an estimated $27 billion as did giving for healthcare which rose 3.8% to $22.5 billion.

Giving to arts, cultural and humanities organizations dropped an estimated 2.4% to $12.3 billion.

Giving to international aid organizations reached $8.9 billion, an increase of 6.2%.

For the full executive summary of the Giving USA report, visit www.givingusa2010.org.

"Speculation was swirling for many months that charitable giving had to be down by a great percentage in 2009," said Nancy Raybin, chair of Giving Institute: Leading Consultants to Nonprofits. "Anecdotally, our experts across the country heard that strong giving in December made all the difference, and the totals for the year bear that assumption out."

Giving USA, which has reported U.S. charitable contributions since 1956, found that the inflation-adjusted drop of 3.2% for 2009 was not as severe as the decline during the recession year of 1974, when inflation-adjusted giving fell by 5.5%.

Why have we done better now than in earlier recessionary years? According to the report's authors, three potential reasons are:

Average household giving this decade is, on average, higher than it was in the 1970s. Then, average individual giving by households averaged $1,323 whereas the 2009 average was $1,940 per household

More women today are in control of their own money by virtue that they make up 50% of the current labor force. Because of that there is a new and sizable donor base that was not present in the 1970s.

Greater professional fundraising acumen by nonprofit organizations.

From this Giving USA study, my two personal conclusions from this data are: Firstly, that the American people are generous. In times of need America step up to the plate. We saw it quite vividly during the Asian Tsunami, Katrina, Haiti and countless other times. Secondly, by sheer will and determination of hard-working nonprofit leaders coupled with sound fundraising principles in action, nonprofits forged ahead and continued to appeal to donors for support, even (or especially) in these trying times.

Years ago, a nonprofit CEO told me unapologetically that part of his job was to ensure that his board and committed donors gave until it hurt. In 2009, we clearly see that when America was hurting, she still gave. Now that's something we can all hang our hats on. Let's keep up the good work.

# # #

David Hinsley Cheng is Managing Partner of DRG Executive Search Consultants and has been working with nonprofit boards and staff on CEO and other senior level searches since 1995.



	June 2010 Annual Charitable Giving Again Exceeds $300 Billion By David Hinsley Cheng "U.S. charitable giving falls 3.6% in 2009 to $303.75 billion" and for the third straight year exceeded $300 billion. That's how the most recent report began on giving, unveiled by Giving USA, a publication for Giving USA Foundation. The figures that were just released several days ago were widely anticipated by many in the nonprofit community. For much of 2009, we all heard about many campaigns making significant downward adjustments, layoff of staff at all levels, massive losses to endowments, and so on. It seemed at times that organizations were bracing themselves for a worst-case scenario brought about by the downward spiraling economy. From this most recent report, we take heart, however in knowing that in times of adversity, Americans are still digging deep and supporting important causes. In fact "using models we have developed, we estimate that the human services, health, international aid and environment/animals subsector saw increased contribution" said Patrick M. Rooney, Ph.D., executive director of the Center on Philanthropy. "This focus on vital needs is consistent with what historians tell us happened during the Great Depression." Some key findings from the 2010 Giving USA Report include: Individual giving fell an estimated 0.4% in 2009, to $227.41 billion (this equates to a 0.0% change in inflation adjusted dollars). Many news reports and polls suggested that individual contributions increased toward the end of the year, as stock market indices rose and as media coverage highlighted the needs faced by charitable organizations. Foundation grantmaking by private, community, and operating foundations was $38.44 billion, according to the Foundation Center, falling by 8.9%. This is a less severe drop than foundations anticipated when the Foundation Center surveyed them early in 2009. Corporate giving rose to an estimated $14.1 billion, up 5.5%. This unexpected bounce takes corporate giving to within 1% of its pre-recession level. According to at least two reports (Committee Encouraging Corporate Philanthropy and Community Foundation of Silicon Valley), corporations increased their in-kind donations, which are less affected by recessions. This shift explains at least some of that growth. The subsectors that saw declines in giving tended to be those that are more likely to receive gifts through capital campaigns, contributions to endowments, and donations of art and property. These include education, grantmaking foundations, and arts and cultural organizations. Giving to religion, at 33% of total giving, remains the largest share of all contributions, with an estimated $100.95 billion. The estimated decline in giving to religion was 0.7%. Giving to education declined to an estimated $40 billion, a drop of 3.6% reflecting the second consecutive year that giving to education has declined. Giving to private and community foundations dropped to $31 billion, a decline of 8%. Giving to human services grew 2.3% to an estimated $27 billion as did giving for healthcare which rose 3.8% to $22.5 billion. Giving to arts, cultural and humanities organizations dropped an estimated 2.4% to $12.3 billion. Giving to international aid organizations reached $8.9 billion, an increase of 6.2%. For the full executive summary of the Giving USA report, visit www.givingusa2010.org. "Speculation was swirling for many months that charitable giving had to be down by a great percentage in 2009," said Nancy Raybin, chair of Giving Institute: Leading Consultants to Nonprofits. "Anecdotally, our experts across the country heard that strong giving in December made all the difference, and the totals for the year bear that assumption out." Giving USA, which has reported U.S. charitable contributions since 1956, found that the inflation-adjusted drop of 3.2% for 2009 was not as severe as the decline during the recession year of 1974, when inflation-adjusted giving fell by 5.5%. Why have we done better now than in earlier recessionary years? According to the report's authors, three potential reasons are: Average household giving this decade is, on average, higher than it was in the 1970s. Then, average individual giving by households averaged $1,323 whereas the 2009 average was $1,940 per household More women today are in control of their own money by virtue that they make up 50% of the current labor force. Because of that there is a new and sizable donor base that was not present in the 1970s. Greater professional fundraising acumen by nonprofit organizations. From this Giving USA study, my two personal conclusions from this data are: Firstly, that the American people are generous. In times of need America step up to the plate. We saw it quite vividly during the Asian Tsunami, Katrina, Haiti and countless other times. Secondly, by sheer will and determination of hard-working nonprofit leaders coupled with sound fundraising principles in action, nonprofits forged ahead and continued to appeal to donors for support, even (or especially) in these trying times. Years ago, a nonprofit CEO told me unapologetically that part of his job was to ensure that his board and committed donors gave until it hurt. In 2009, we clearly see that when America was hurting, she still gave. Now that's something we can all hang our hats on. Let's keep up the good work. # # # David Hinsley Cheng is Managing Partner of DRG Executive Search Consultants and has been working with nonprofit boards and staff on CEO and other senior level searches since 1995.