News and analysis
June 14, 2016

Donations Grow 4% to $373 Billion, Says ‘Giving USA’

Charitable giving reached $373.3 billion in 2015, up 4 percent from the previous year, according to estimates from "Giving USA," an annual report on American philanthropy.

International-affairs organizations saw the largest growth in donations, with their collections rising by 17.4 percent to $15.8 billion, largely due to the Nepal earthquake, the Syrian-refugee crisis, and other high-profile humanitarian disasters.

Education giving grew by 8.8 percent, the second-biggest jump, reaching $57.5 billion, according the report released Tuesday by the Giving USA Foundation. Donations to arts, culture, and humanities groups rose 6.8 percent, while giving to environment or animal-welfare issues increased 6.1 percent.

The giving total set a record for the second year in a row as contributions further eclipsed prerecession levels. However, the results for 2015 were not quite as strong as in the previous year, when giving surged 6.1 percent.

"If you look at the overall economic environment for 2015, it was just not as favorable a year as 2014," said Una Osili, director of research at the Indiana University Lilly Family School of Philanthropy, which conducted the study.

Giving represented 2.1 percent of GDP, matching the 2014 figure and coming in above the 40-year average of 1.9 percent.

Slower Growth Rate?

Ms. Osili said it is too early to predict how giving will fare over the full year. However, studies released earlier this year suggest nonprofits should brace for the possibility of a continued flattening in growth rates.

Projections released in January by the Lilly School and Marts & Lundy, a philanthropy-consulting firm, said giving was expected to increase about 4.1 percent this year. A report by fundraising forecaster Atlas of Giving earlier this year projected an increase in donations of 2.6 percent.

Some nonprofits started the year concerned that the presidential election might divert donations from charities to candidates, and about a stock market that was rocky. But stocks have rebounded since the start of the year, and some recent studies suggest that elections do not discourage giving to charities.

Other findings from the report include:

  • Giving to public-society-benefit organizations, such as commercially affiliated donor-advised funds, grew 5.9 percent to $27 billion. The category also includes advocacy groups, Jewish federations, and United Way affiliates.
  • Giving to religious organizations rose by 2.6 percent to $119.3 billion. Faith groups have received the largest portion of total donations for decades but have seen their share of total giving drop as attendance at services has declined and fewer people claim religious affiliation. However, with this year’s modest growth, religious groups held steady at 32 percent of all giving.

Note: An n/a means that “Giving USA” did not track giving to a particular cause during the years indicated.

  • Giving from living individuals grew 3.7 percent to $264.6 billion, 71 percent of total donations.
  • Bequests rose by only 1.9 percent, to $31.8 billion, compared with 26 percent growth in 2014. Giving from bequests can fluctuate dramatically from year to year, depending on how many large estates close, Ms. Osili said.

  • Growth in giving by companies slowed in 2015, too, but those results may have been heavily affected by a big year in 2014, when corporate donations spiked by more than 10 percent after a down year in 2013. Corporate giving, which includes donations of products and cash and grants by company-affiliated foundations, was up 3.8 percent in 2015, reaching $18.5 billion.
  • Giving from independent, individual, and operating foundations grew 6.3 percent to $58.5 billion. That continues a trend of strong growth in foundation giving in recent years, likely influenced by robust stock-market growth.
  • Giving increased last year to all types of nonprofits except foundations, which saw a 4 percent decrease from 2014. The report says this might be due to fewer large gifts being made to foundations; some observers contend foundations may be losing ground to increasingly popular donor-advised funds.

Shaking Off the Recession

Just three years ago, researchers said giving levels might not reach a previous high seen in 2007 — right before the start of the economic crisis — until at least 2018, unless the economy grew substantially.

Now, with two years of strong growth in giving in 2014 and 2015, such fears seem to be in the rear-view mirror.

The big question for nonprofits may be: Was the slowdown in the giving rate in 2015 a temporary event, or the start of a more extended period of modest growth?

The answer may lie largely in the performance of economic indicators like the stock market, which was flat in 2015 even as other economic measures looked brighter. The Standard & Poor’s 500 index fell by 0.8 percent last year. Research has shown that there is a statistically significant correlation between the S&P and giving levels, according to "Giving USA." So far this year, the S&P is up about 2 percent.

GDP grew 3.3 percent last year, compared to 2.4 percent growth in 2014.

Disposable personal income — in current dollars — was up 3.7 percent, compared with 4.2 percent growth in 2014. That did not, however, affect the level of giving as a percentage of disposable income, which remained at 2 percent. Over the past 40 years, the rate was highest in 2000, when giving reached 2.4 percent of disposable income, and lowest in 1995 (1.7 percent).

Corporate pretax profits, a major factor in business giving, were up 3.3 percent, lower than the average rate of growth of 7.9 percent since 1975. Giving as a percentage of pretax profits was estimated at 0.8 percent, the same as in 2014. That’s lower than the 40-year average of 1.1 percent.

Regional Differences

"Giving USA" does not offer geographical breakdowns, but experts doubt the gains in the past two years have been spread evenly across the country, or between large and small organizations.

Kim Klein, a principal at Klein & Roth Consulting, said organizations are having very different experiences from coast to coast.

Some states, like New Mexico, still haven’t fully emerged from recession. Others, such as North Dakota, are hurting in the face of slumping oil and commodity prices, she noted.

Keith Curtis, chair of the Giving USA Foundation, agreed that there are likely pockets of the country where giving is slow due to economic conditions.

"We do know across the country there are some areas that are doing well, but just like in the economy, you’re going to see some areas that are not quite as strong," he said.

There are organizational as well as regional dichotomies, observers say, with large groups likely benefiting the most from the county’s recent largess.

Generally, the majority of donations each year go to larger institutions with deep resources, said Ann Kaplan, survey director at the Council for Financial Aid to Education. She said big organizations "spend more, they have more of a case for support, and they have larger endowments."

Robert Kissane, president of nonprofit-consulting firm CCS, agreed, noting that smaller organizations sometimes don’t have the resources to mount large fundraising campaigns.

Mr. Kissane pointed to donations to educational organizations, which received 15 percent of total giving last year. He said big-name colleges are likely getting most of the big gifts, while institutions with low national profiles tend to struggle.

"There are a lot small, wonderful schools that are educating teachers and doing all sorts of stuff, which don’t have the wherewithal to build a good [fundraising] program," Mr. Kissane said.

Similarities in Giving, 2005 and 2015

  2005 2015
Total giving as a percentage of Gross Domestic Product 2.20% 2.10%
Individual giving as a percentage of disposable income 2.30% 2.00%
Corporate giving as a percentage of coporate pre-tax profits 0.90% 0.80%

Eden Stiffman contributed to this article.

Note: Historical data in the first chart that appears with this article has been corrected. Data in a previous version of the chart was incorrect for years 1954-2014. Also, a previous version of this article said that giving from living individuals was 72 percent of total donations in 2015 instead of 71 percent. It also said that GDP grew 4 percent in 2014 instead of 2.4 percent. And it said that giving as a percentage of disposable income remained at 2.1 percent in 2015 instead of 2 percent.

Send an email to Timothy Sandoval.