The latest “Giving USA” report contained much good news for charities, with total donations rising to a record $358.4 billion. But the annual snapshot of American philanthropy also revealed some troubling developments. This follow-up analysis presents eight trends from the data that could challenge charities.
People are giving more ...
Gifts by living individuals grew by 4% in 2014 and bequests by 13.6%. This heralds opportunities for planned giving as baby boomers age.
... but they aren’t the force they once were.
Individuals accounted for a shrinking share of charities’ overall support: 80% of all giving last year came from living donors and bequests, down from 87% in the early 1990s.
As donors earned more money, they had more left over after paying for housing, food, and other necessities. There was a 3.8% jump in discretionary income in 2014.
... yet charities aren’t benefiting much.
Donors gave 2% of that income to charity last year — essentially flat from the roughly 1.9% they gave from 2008 to 2012. And some fundraisers say rising student-loan debt and other financial challenges make it less likely that baby boomers’ children and grandchildren will be able to give like their elders have.
Foundations get more generous ...
Foundations increased grants by 6.5% in 2014. And they’re a much bigger slice of charities’ overall support now than a generation ago: 15% of the pie last year, more than double the 6.7% in 1989.
... as donors hold back in adding to their funds.
Giving to foundations was flat: 0.1% growth in 2014. Some wealth was being siphoned off by donor-advised funds, but researchers at “Giving USA” found that the growth of such funds has slowed. That means the money in endowed funds may not be plentiful enough to keep up with charity demand.
Corporate giving rises ...
Businesses increased giving by 12% in 2014. The finding echoes an annual survey by CECP of the world’s largest corporations, which found 56% of 271 big companies increased their giving from 2012 to 2014.
... but falls relative to profits.
While companies have reaped revenue gains since the recession ended, the share of pretax profits companies gave in 2014 fell to 0.7%, the lowest level since 1974. Because corporate giving hasn’t grown as fast as profits, such donations now represent just 5% of the total.
The wealthy are giving big ...
Multimillion-dollar donations from the world’s richest people helped drive the surge in contributions last year. That trend is gaining steam: A Chronicle tally of gifts of at least $1 million found $700 million more going to nonprofits in the first five months of 2015 than during the same period last year, a 21% jump. And Fidelity Charitable reports that more holders of donor-advised funds made grants of at least $1 million in 2014 (272) than in 2013 (185).
... with most going to elite causes.
The biggest gifts mostly went to a small group of institutions. For instance, donations to the nation’s colleges grew by more than 10% last year, reports the Council for Aid to Education. But 30% of the money went to just 20 institutions.
Social-service aid inches up ...
Contributions to social-service groups increased by nearly 2% in 2014.
... as need keeps growing.
The slight uptick doesn’t bode well for charities that aid the poor, which say the recovery hasn’t helped many of their clients. For the third year in a row, the Nonprofit Finance Fund found more than half of 5,000 organizations said they were unable to meet demand for food, shelter, and other basic needs.
Religious giving is still strong...
Religion continued to drive the biggest share of donations: 32% of the total in 2014. Studies have found that donors who identify as religious tend to give more money to all causes, not just their own congregations.
... but faith loses popularity.
Religion is in steady decline as a favored cause: 53% of gifts went to religious groups in 1987. And a new study by the Pew Research Center found that the share of Americans who say they have no religious affiliation jumped nearly 7% from 2007 to 2014, now making up 23% of the adult population.
Arts and animals gain ground ...
Arts and culture organizations and groups that aid the environment and animals saw sharp increases in donations of more than 7% and 5%, respectively, the biggest gains among all causes.
... leaving less for other causes.
The newly energized support for the arts and hot causes like rescue dogs may indicate that donors are more attuned to their personal interests than society’s most urgent needs, say giving experts.