Charitable Giving Reaches $212 Billion for 2001

Charitable Giving Reaches $212 Billion for 2001

News story posted in Demographics on 20 June 2002| comments
audience: National Publication | last updated: 18 May 2011
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Summary

The AAFRC Trust for Philanthropy, in concert with the Center on Philanthropy at Indiana University, today released Giving USA, its annual report on philanthropy in America for the year 2001. American charities received $212 billion in 2001 amidst the conflicting influences of recession and national tragedy. This represents an increase from the prior year of 0.5% and an inflation adjusted decrease of 2.3%.

Giving USA Annual Report for 2001 Shows Mixed Results in Year of Recession and Crisis

PGDC Summary:

The AAFRC Trust for Philanthropy, in concert with the Center on Philanthropy at Indiana University, today released Giving USA, its annual report on philanthropy in America for the year 2001. American charities received $212 billion in 2001 amidst the conflicting influences of recession and national tragedy. This represents an increase from the prior year of 0.5% and an inflation adjusted decrease of 2.3%.

Full Text:

JUNE 20, 2002. NEW YORK CITY-- Americans gave an estimated $212 billion to charity in 2001, according to research findings in Giving USA. The report, released today by Leo P. Arnoult, CFRE, chair of the AAFRC Trust for Philanthropy, answers some widely raised questions about how charitable giving fared in a year of recession and crisis.

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 one-half of one percent (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 (AAFRC).

"People are more aware than ever of the role philanthropy plays in our lives and communities," said Eugene R. Tempel, Ed.D., CFRE, executive director of the Center on Philanthropy at Indiana University, 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.

September 11

Gifts made to relief and recovery after September 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 September 11 are estimated at $1.25 billion. Corporate gifts paid in 2001 for September 11 relief are estimated by The Foundation Center at approximately $410 million. Foundation grants paid in 2001 for relief are estimated by The Foundation Center to be approximately $195 million. Amounts for future gifts pledged by corporations and foundations in 2001 for September 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 September 11. The other subsector that received a substantial portion of the total estimated amount contributed for September 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 September 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.

"A variety of factors influenced giving in 2001," Arnoult said. "Many donors gave less or stopped giving because of the worsening economy. New donors, increases in giving from other donors, and changes in the mix of causes that donors support occur every year. These factors, along with recent growth in the number of foundations and giving for September 11 relief, all affected giving in 2001."

Methodology

Giving USA's annual estimates are based on original surveys of organizations and econometric studies using tax data, government estimates for economic indicators, and information from other research institutions. Sources of data used in the estimates include the Internal Revenue Service, the U.S. Department of the Treasury, the Bureau of Economic Analysis, The Foundation Center, INDEPENDENT SECTOR, the Council for Aid to Education, the National Center for Charitable Statistics at the Urban Institute, and the National Council of Churches of Christ.

Giving USA revises its estimates based on new data about claimed deductions for charitable contributions and in response to other findings about giving or the economy released by government agencies or researchers in the field. The estimates for giving reflect adjustments made to take into account new information about charitable deductions claimed on individual, estate, and corporate tax returns. Estimates for 2000 also include a revised estimate for giving by taxpayers who do not itemize deductions.

Giving USA estimates the percentage of change in giving to subsectors (health, arts, education, religion, etc.). Except for religion, these estimates are based on a survey conducted for Giving USA by the Center for Survey Research at Indiana University. The rates of change are based on responses from 1,710 organizations.

A Note about Inflation Adjustments

Inflation-adjusted rates of change are based on estimates that are calculated using a Bureau of Labor Statistics converter, which rounds to two decimal points. When comparing the inflation-adjusted rates of change to rates of change in current dollars, the difference between the two is not a constant 2.8 percentage points (the rate of inflation used in the BLS converter for 2001). This is a by-product of the rounding and is not due to the use of a different measure of inflation or an error in calculation.

The AAFRC Trust for Philanthropy / American Association of Fundraising Counsel

The American Association of Fundraising Counsel (AAFRC) was founded in 1935 to advance professional and ethical standards in philanthropic fundraising consulting and to promote philanthropy in general. The AAFRC first published Giving USA as a public service in 1955. In 1985, the AAFRC Trust for Philanthropy was created to carry out and expand the public service goals of the AAFRC. Today the AAFRC Trust for Philanthropy publishes Giving USA, the annual report on American philanthropy. The AAFRC continues to provide financial support, expertise, and leadership to the AAFRC Trust and works in partnership with it to advance philanthropy and promote ethics in the fundraising profession.

The Center on Philanthropy at Indiana University

The AAFRC Trust contracted with the Center on Philanthropy at Indiana University to research and write Giving USA. The Center on Philanthropy at Indiana University is the largest and most comprehensive academic center dedicated to the study of philanthropy and nonprofit management. It was created in 1987 to increase understanding of philanthropy and improve its practice. More than 45 Philanthropic Studies faculty members in 21 disciplines conduct research and teach about philanthropy and nonprofit management.


Source: www.aafrc.org

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