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Charitable Giving by Americans Is Bouncing Back

Donations are up overall, but two sectors are flagging

By Richard Eisenberg

And now for a glimmer of uplifting news: Americans are opening their wallets and increasing their charitable giving, according to the new Giving USA annual report from the Giving USA Foundation and its research partner, the Indiana University Lilly Family School of Philanthropy.
The $335.17 billion Americans gave to charity in 2013 is up 4.4 percent from 2012, marks the fourth straight year of increased giving and is close to 2007’s pre-recession peak of $349.50 billion (adjusted for inflation).
Part of Our 'National DNA'

“The big takeaway is that Americans continue to demonstrate that giving to causes they care about is part of our national DNA,” said Gregg Carlson, chair of the Giving USA Foundation and president of Carlson Fund Raising in Henderson, Nev. “If the rate of increase continues, we’ll reach the pre-recession high in the next year or two. We’re very optimistic that will happen next year, and certainly in the next two years.”

(MORE: How Warren Buffett Made Me Smarter About Charity)

The $335 billion figure represents Giving USA’s estimate of total charitable giving by individuals, corporations, foundations and bequests last year. But a $9.69 billion increase in giving by individuals in 2013 — 4.2 percent from 2012 — represents the single largest contributor to the overall rise in total charitable giving.
Carlson believes the growing generosity of individuals reflects their strengthening finances and a desire to compensate for their reduced giving when they felt pinched during the Great Recession.

Adds Una Osili, Director of Research at the Lilly Family School of Philanthropy at Indiana University: “The sustained recovery in giving is a good signal for charities and the causes they support.”
Boomers and Charitable Giving

The Giving USA report doesn’t break down contributions by age but, Carlson says, “It’s safe to suggest a lot of this giving is by boomers.” Isili notes that boomers often make donations where they feel confident their giving “is having an impact.”
Another recent report, The Next Generation of American Giving, by Blackbaud (a software provider to nonprofits), said boomers give the largest share of donations to charities. They represent 43 percent of total U.S. giving; nearly three quarters of boomers make charitable contributions.
(MORE: How Generous Are Baby Boomers?)

The Blackbaud report also said that just 10 percent of boomers plan to give more to charity over the next 12 months. (By contrast, 21 percent of Millennials and 18 percent of Gen X’ers intend to boost their giving.) Blackbaud’s Dennis McCarthy told me, for an earlier Next Avenue post, that the percentage is low because so many boomers were “absolutely  eviscerated” in the recession — their retirement funds took a hit and some lost their jobs.
Osili agrees. “Keep in mind that boomers are facing retirement or are about to retire,” she said, so many may be cautious about giving more in the year ahead with retirement security on their minds.


Where Giving Isn't Rising

Not everything is rosy on the charity front, according to the new Giving USA report.
Donations to international affairs-focused charities slid 6.7 percent last year and corporate giving fell 1.9 percent.
Giving USA posits that the drop in international donations may be related to the lower overall corporate support for charities in 2013. Also, Carlson said, “this type of giving is volatile, depending on what is happening internationally.”
Of course, periodic scandals — such as Cambodian sex trafficing activist Somaly Mam stepping down from her foundation after Newsweek reported she faked her life story — only add to the public’s wariness towards international giving.

(MORE: How to Recognize Charity Fraud)
Osili and Carlson also believe corporate giving dropped because firms anticipate slower profit growth in 2014 and some companies are choosing to do their good works through cause sponsorships.
Giving to religious organizations, overall, was also “relatively flat” in 2013, Carlson said.  “That continues a trend of religion being a smaller and smaller part of the giving pie,” he noted. In 2013, according to Giving USA, 31 percent of gifts went to the religious sector (the largest share of charitable dollars); a decade ago, 57 percent did.
“We speculate it’s directly tied to attendance being down at houses of worship,” Carlson said. Churches, synagogues and mosques, generally speaking, “have been very slow to adopt other solicitation strategies — it’s outside their culture,” he noted.
A MOOC Awards Nonprofits $150,000

One last point: in my recent Next Avenue blog post about the Giving With Purpose MOOC I enrolled in — offered by Northeastern University and the Giving With Purpose Foundation — I mentioned that it would give $150,000 in grants to nonprofits that passed muster with the students. The 30 winning nonprofits have just been announced.
The winners tend to cluster in a few broad categories (housing and homelessness; youth, children, and education; and hunger and food security) and range in size from St. Mary’s Food Bank Alliance in Arizona to the New York Public Library.
“I love the list of grantees because it reflects how deeply woven nonprofit organizations are into the fabric of our communities,” said Rebecca Riccio, the Northeastern professor who taught the course. “They're not just addressing the needs of our most vulnerable members, although that's a critical function. They shape who we are and who we can become as a society by putting our best impulses as human beings into action.”

That, after all, is the purpose of giving.

Photograph of Richard Eisenberg
Richard Eisenberg is the former Senior Web Editor of the Money & Security and Work & Purpose channels of Next Avenue and former Managing Editor for the site. He is the author of "How to Avoid a Mid-Life Financial Crisis" and has been a personal finance editor at Money, Yahoo, Good Housekeeping, and CBS MoneyWatch. Read More
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