News and analysis
June 19, 2012

Donations Barely Grew at All Last Year, 'Giving USA’ Finds

For the second year in a row, charitable giving barely grew, rising by just 0.9 percent after inflation in 2011, according to today’s release of “Giving USA,” the annual yearbook of American philanthropy. The study estimated that the total donated was $298.4-billion.

The glacial pace of the economic recovery caused “Giving USA” researchers to make a far gloomier forecast about when a full recovery in charitable giving will occur.

“If we continue to grow at this rate, it will take more than a decade to get back to where we were in total giving in 2007,” said Patrick Rooney, executive director of the Indiana University Center on Philanthropy, which compiles “Giving USA.”

Last year Mr. Rooney predicted that a recovery in giving could occur by 2016; now, given current conditions, he says it will more likely be 2022.

No Stronger This Year

Slow fundraising growth in 2011 comes nowhere near to erasing record historic losses—the deepest ever recorded in the report’s five decades—caused by the recession.

Total charitable giving last year was still 11 percent below what it was in 2007, before the effects of the recession were felt. Donations to charities dropped by a total of 13.4 percent in 2008 and 2009, “Giving USA” said as it released new estimates for contributions in those years.

The drop in those years was largely caused by a 17.6-percent plunge in donations by living Americans, who provide more than 70 percent of all donations.

Interviews conducted in the past week with more than 40 charity officials and other fundraising experts suggest that 2012 will not be any stronger for charitable giving than 2011.

And while some people may accelerate gifts in 2012 because they think the charitable deduction will be reduced next year, uncertainty about the global economy, the presidential election, health-care policies, and tax rates will cause many others to hold off making big gifts this year, said Robert Sharpe, a Memphis fundraising consultant.

“The bleeding stopped in 2010,” he said, “but the recovery is anemic.”

Aid Groups Did Better

American charities that conduct development and relief work overseas were the only type of nonprofit to outpace inflation by a significant percentage, at 4.4 percent, while donations to environmental causes increased by 1.4 percent after inflation. Giving to every other type of organization was either flat or declined.

Religious organizations suffered the biggest drop, with donations falling nearly 5 percent, in part because of a decline in the number of Americans who belong to churches, synagogues or mosques, “Giving USA” said.

Among the other key findings:

  • Donations to foundations dropped by nearly 9 percent, to $25.8-billion. That drop might not be as ominous as it appears for future grant making, however. “Giving USA” said, because affluent people seemed to be putting a lot of their money into donor-advised funds. The three biggest such funds had an average rise in donations of 77 percent last year, the study noted.
  • Contributions by living individuals were stagnant at $217.8-billion.
  • Donations by corporations fell by more than 3 percent, to $14.6-billion last year, while foundations gave 1.3-percent less, at $41.7-billion.
  • Bequests were the only source of growth in donations last year, rising nearly 9 percent, to $24.4-billion.

A free executive summary of “Giving USA 2012” is available online. The full report costs $45.