U.S. Charitable Giving Estimated to be $306.39 Billion in 2007

U.S. Charitable Giving Estimated to be $306.39 Billion in 2007

Up 3.9 percent despite worries about gas prices, mortgage crisis and housing market
News story posted in Demographics on 24 June 2008| 3 comments
audience: National Publication | last updated: 18 May 2011
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Charitable giving in the United States is estimated to be $306.39 billion in 2007, exceeding $300 billion for the first time in history, according to Giving USA 2008, the yearbook on philanthropy released today by Giving USA Foundation.

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Glenview, Ill. (June 23, 2008)—Charitable giving in the United States is estimated to be $306.39 billion in 2007, exceeding $300 billion for the first time in history, according to Giving USA 2008, the yearbook on philanthropy released today by Giving USA FoundationTM.

Every type of public charity receiving donations saw gains in 2007. The subsectors examined in Giving USA are: Arts/Culture/Humanities; Education; Environment/Animals; Health; Human Services; Public-Society Benefit; International Affairs; and Religion. Foundations saw a decrease. Private foundations are not technically a form of public charity, but are examined in the report, as are community and operating foundations.

The estimates for 2007 indicate that giving rose in 2007 by 3.9 percent (1 percent adjusted for inflation), says the report, which is researched and written by the Center on Philanthropy at Indiana University. 

This year’s report also includes results from a survey of 366 charities about their fundraising practices and the impact they believe national events had on giving in 2007 and will have in 2008. The survey concentrated on charities in the public-society benefit subsector. These include combined purpose funds that reallocate received gifts to other charitable recipients, community and economic development organizations, research institutes, and organizations registering voters or working on civil rights issues.

Combined-purpose funds include such entities as United Ways, religious campaigns and the Combined Federal Campaign.

“Charities we surveyed have concerns about 2008 for the economy and the stock market and the impact they will have on giving, but not about the presidential election,” said Ms. Del Martin, chair of Giving USA FoundationTM. “This year’s Giving USA survey showed that a clear majority of charities in the public-society benefit arena are not worried about the impact the presidential campaign will have on their fundraising.”

Presidential campaigns raised $580.4 million in 2007, according to the Federal Election Commission. That is less than one-quarter of one percent of the $306 billion raised for charitable purposes. 

Giving USA 2008 shows that a strong start to the economy in 2007 helped lift giving despite worries at year’s end from gasoline prices or the housing and mortgage crises,” said George C. Ruotolo Jr., CFRE, chair of Giving Institute: Leading Consultants to Non-Profits, which founded Giving USA Foundation in 1985. “Just as important as the 3.9 percent overall increase is the finding that every subsector (except private foundations) is projected to have seen increases in 2007. This last occurred in 2001.” 

The increase in 2007 is attributable largely to stock market performance in the first half of the year, overall growth in the economy measured by gross domestic product, and increases in corporate and personal income as reported at the end of the year. Charitable giving was 2.2 percent of gross domestic product for 2007.  
The strongest growth was reported by foundation grantmaking, which rose 10.3 percent (7.3 percent adjusted for inflation). Estimated charitable bequests also rose, increasing 6.9 percent to $23.15 billion (an increase of 4.0 percent adjusted for inflation).

Individual giving, the mainstay of fundraising and giving, reached an estimated $229.03 billion, or 74.8 percent of total estimated giving in 2007. This is an increase of 2.7 percent (a drop of 0.1 percent adjusted for inflation). 

“Individual giving makes up a grand total of 88 percent of all giving when you combine bequest, family foundation and individual giving,” added Martin. (Half of all individual giving goes to religious organizations.) “Even if you only look at donations to secular organizations, individuals—through their outright gifts, their wills, and the foundations they control—still give more than 80 percent of the total.

“And what you can’t forget,” she added, “is that the ‘little guys,’ the families most affected by the economy, kept on giving despite any worries they might have had about their personal situations.”

Charitable bequests are estimated to be $23.15 billion in 2007. This is an increase of 6.9 percent (4.0 percent adjusted for inflation).

Corporate giving, which is closely tied to corporate profits, is projected to have increased 1.9 percent, to $15.69 billion. This is a decline of 0.9 percent adjusted for inflation. Other reports of corporate giving include fair-market value for in-kind donations. Giving USA estimates the amount corporations claim on tax returns as charitable contributions. There are restrictions on how in-kind gifts are valued for tax purposes.

Foundation grantmaking, according to data from the Foundation Center, was $38.52 billion. This reinforces a key finding in Giving USA 2008 that an increasing share of total giving is now coming from foundations, which accounted for more than 12 percent of the total for 2007. The growth in foundation giving reflects the increasing number of household or individual donors who, in recent years, have created foundations and are using them as vehicles for focusing their charitable giving and emphasizing certain types of organizations or programs.  

2007 estimates of giving by type of recipient
Charitable gifts benefit at least nine different types, or subsectors, of charities. All subsectors, except new gifts made to foundations, are estimated to have seen increases in total gifts received in 2007.

Religion: Religious congregations received an estimated $102.32 billion, which is 33.4 percent of the total. This is the first year that giving to religion has exceeded $100 billion.

Giving to religion increased an estimated 4.7 percent (1.8 percent adjusted for inflation). Religious gifts account for an estimated one-half of all individual giving, not counting gifts made through bequests (5 percent) or family foundations (3 percent).

Education organizations received an estimated $43.32 billion, or 14.1 percent of the total. Gifts to this type of organization increased 6.4 percent (3.4 percent adjusted for inflation) compared with the revised estimate for 2006.

Human Services charities are estimated to have received gifts totaling $29.64 billion. This is 9.7 percent of total estimated giving. The total is a change of 8.4 percent (5.4 percent adjusted for inflation) from the revised estimate for 2006. 

In recent years, foundations have been the type of charity to receive the third-highest amount of donations. For 2007, the estimate for giving to foundations is $27.73 billion, based on work between the Foundation Center and Giving USA. The estimate for 2007 puts foundations as the fourth-largest category, after human services. The change in giving to foundations is a decline of 9.4 percent (-11.9 percent adjusted for inflation).  

Gifts to health organizations are estimated to be $23.15 billion, or 7.6 percent of total estimated giving. Growth in giving to this subsector in 2007 is estimated to be 5.4 percent (2.4 percent adjusted for inflation).

Estimated giving in the public-society benefit subsector is $22.65 billion in 2007, or 7.4 percent of total estimated giving. The increase is 5.8 percent (2.9 percent adjusted for inflation).

Arts/Culture/Humanities organizations received an estimated $13.67 billion in 2007, or 4.5 percent of total estimated giving. The increase is 7.8 percent (4.8 percent adjusted for inflation).

International Affairs organizations, which include relief, direct aid, exchange, and other programs focused on international issues, received an estimated $13.22 billion, or 4.3 percent of total estimated giving. This is growth of 16.1 percent (12.9 percent adjusted for inflation). Giving to international affairs has risen dramatically over the past few years. One recent study released by Giving Institute member firm Campbell & Company showed that the Millennial Generation—those born after 1981—are concerned with causes that make the world a better place while those born before that time are looking to provide relief closer to home.

Giving to the environment/animals subsector is estimated to be $6.96 billion, or 2.3 percent of total estimated giving. This estimate reflects growth of 10.8 percent (7.7 percent adjusted for inflation). 

Summary of Giving USA methods
Giving USA’s annual estimates are based on 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, Bureau of Economic Analysis, Foundation Center, INDEPENDENT SECTOR, Council for Aid to Education, National Center for Charitable Statistics at the Urban Institute and National Council of Churches of Christ.

The Giving USA report estimates changes in giving to subsectors (health, arts, education, religion, etc.). Except for giving to religion and giving to foundations, the subsector estimates are based on econometric models. The Center on Philanthropy at Indiana University prepares all the estimates in Giving USA for Giving USA FoundationTM.

Giving USA found total growth of 4.6 percent when estimating the dollar amount of gifts received at organizations When estimating giving by adding together the results of the four sources of contributions, Giving USA found a growth in giving of 3.9 percent. The estimates for the sources of giving are developed separately from the estimate of the receipts by type of recipient. The fact that the two different methods come within less than 1 percentage point of each other is one measure used by the Giving USA Advisory Council on Methodology to evaluate the results prior to their release. 

A Note about Inflation Adjustments
Inflation-adjusted rates of change are based on estimates calculated using a Bureau of Labor Statistics inflation 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 2006 to 2007). 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.

NOTES TO EDITORS

Data for 1967 through 2007 are available upon request. The data show sources of contributions by year in current and inflation-adjusted dollars and allocation of gifts by type of recipient organization, also in current and inflation-adjusted dollars. Data also are available showing total giving as a percentage of gross domestic product; individual giving as a percentage of personal income and as a percentage of disposable personal income; and corporate giving as a percentage of corporate pre-tax profits.

The preferred citation for Giving USA is: Giving USA, a publication of Giving USA FoundationTM, researched and written by the Center on Philanthropy at Indiana University.

For scholarly citations, the preferred form is the American Psychological Association style as follows: Giving USA. (2008).

Giving USA is a public outreach initiative of Giving USA Foundation™. The Foundation, established by Giving Institute: Leading Consultants to Non-Profits, endeavors to advance research and education in philanthropy.


The complete Giving USA 2008 report, with data covering giving in 2007, will be available in July 2008. Giving USA Foundation also publishes a quarterly newsletter, Giving USA Spotlight. Both may be ordered by calling 847/375-4709 or on-line at givingusa.org. Giving USA 2008 (with data for 2007) is $75. Giving USA Presentation on CD is $135. Giving USA book and subscription to Spotlight is $165. Giving USA book in both electronic and soft-cover format, subscription to Spotlight, and Presentation on CD is $270. Giving USA book in soft-cover format, subscription to Spotlight, and Presentation on CD is $210. Single issues of Giving USA Spotlight are $45. Costs do not include shipping and handling. All orders must be prepaid.

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Mr. Hastings is absolutely correct

Charitable giving strong

No doubt an increase in tax rates will result in more sophisticated charitable giving techniques being used, but this will not translate into an increase in actual charitable giving. The bottom line is the more people have, the more people give. It has ever been thus in the U.S. Reduced tax rates under Bush (and under Reagan and under Kennedy) did not reduce charitable giving as predicted -- just the opposite. Increasing tax rates will not increase the amount of charitable giving.

Bequest Giving Strong

We have been examining the Giving USA data as it relates to charitable giving through estates. Of particular interest to those who work in the field of philanthropic planning is the fact that giving via bequests was estimated at $23.15 billion for 2007, an increase of 6.7% over 2006. Bequest giving grew at 2.5 times the rate of individual giving, which increased by just 2.7%. Giving by bequests has now grown three out of the last four years. As has been the case as far back as the years of the Great Depression, it is clear that bequests and other planned gifts are relatively immune to economic cycles, as they are more closely tied to the lifecycle of donors than the winds of economic change. It is not unusual for organizations that have long emphasized the importance of planned giving to receive upwards of 25% or more of their philanthropic support in the form of bequests. Over the past five years, for example, according to the Council for Aid to Education (CAE), matured bequests combined with the present value of trusts and other deferred gifts have accounted for an average of some 27% of individual gift income to higher education. We expect bequest income to remain stable in coming years with more moderate growth depending on the value of stocks, real estate, and other investments. The level of bequests is also tied somewhat to the number of deaths in America. Mortality rates have fallen slightly in recent years. There is not expected to be a significant increase in the number of deaths until the first Baby Boomers begin to pass away a decade or more from now, when the bulk of the coming intergenerational wealth transfer will begin to occur. In the meantime tax and economic policies may have a tremendous impact on the growth of charitable remainder trusts, lead trusts and other split-interest charitable gifts. A freeze of current estate tax rates as proposed by Barack Obama along with higher income and capital gains tax rates will doubtless lead to a renewed emphasis on gift planning tools that result in avoidance and/or delay of gift, estate, and capital gains taxes while in some cases also reducing the tax on ordinary income. Planners who want to be on the cutting edge of helping clients deal with what many expect to be significant changes in tax policies should dust off their knowledge of planning tools that held greater appeal during the Clinton years when 39.6% ordinary tax rates along with 28% capital gains tax rates prevailed. Back to the future?

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