Philanthropy in America remains strong, and charitable giving has increased again this year. This is the third consecutive year of increases in total giving (in current dollars). Charitable giving in all sectors – individuals, corporate and foundations – rose in 2016, resulting in advancements for nonprofits across many, if not all of those sectors. According to The Giving Institute’s annual report released today, American generosity continues to climb. In its report, Giving USA 2017: The Annual Report on Philanthropy for the Year 2016, the rise was again propelled by individuals supporting causes that are meaningful to them and that will positively impact on their lives and on the lives of their families and on their communities.
According to the report:
Total estimated charitable giving in the United States rose 2.7 percent between 2015 and 2016 (1.4 percent, adjusted for inflation), to $390.05 billion in contributions. This increase reflects growth in giving to all of the major recipient subsectors, and strong growth in giving by individuals.
The single largest contributor to the increase in total charitable giving in 2016 was an increase of $10.53 billion (3.9 percent over 2015, in current dollars) in giving by individuals. “Individual giving continued its remarkable role in American philanthropy in a year that included a turbulent election season that reflected a globally resurgent populism,” said Amir Pasic, Ph.D., the Eugene R. Tempel Dean of the Lilly Family School of Philanthropy. “In this context, the absence of a dramatic change in giving is perhaps remarkable, but it also demonstrates the need for us to better understand the multitude of individual and collective decisions that comprise our record of national giving.
”One of the most interesting aspects of the report is the continued importance of “mega-giving” in the landscape of philanthropy. Giving USA traced mega-gifts of $200 million and above as part of this report. For 2016, Giving USA added $1.495 billion in mega-gifts made by individuals and $400 million made by mega-bequest. Consistent with findings of Giving USA, the primary areas of interest for mega- gifts are health, human services, education, and arts and culture. These large gifts have impacted the philanthropic arena, allowing a small number of donors to greatly influence the nonprofit sector.
Aside from the mega-gifts, high-net-worth households, as defined with income of $200,000 or above, are increasingly shaping the nonprofit sector. The Indiana University Lilly Family School of Philanthropy estimates that high-net-worth households represent about 50 percent of total annual giving. This means that nonprofits must continue to sharpen their outreach and cultivation focus to high-net-worth households and larger gifts. The “downside," and possible warning bell for subsequent years, is that the number of gifts may decrease for some organizations, even while the value of those gifts rises.
Relating to the point about the slower rise of giving to foundations in 2016 compared to stronger increases in recent years, foundation giving and grant making are still seen as essential to a diverse philanthropic marketplace. However, it is clear that the increased confidence and comfort expressed above with direct individual giving is clearly having an impact. For nonprofits wishing to capitalize on recent trends, and to stay true to the long standing platform for a successful giving program, it is important to stay focused on individual gifts across the spectrum of giving, especially from high-net-worth individuals. Those gifts not only bring great value, but also raise the bar for all gifts.
Though this report does not separate categories of religious nonprofits, we can understand how giving trends will effect Jewish organizations. Levels of giving grew again in 2016, demonstrating a robust and more confident culture of philanthropy among all Americans. Giving to religion and to faith-related causes is at its highest level to date. Nearly one third of all giving in the US is to religious causes as shown below, consistent with previous years.
Slow Growth in Support of Synagogues: However, Giving USA reports that gifts to religious institutions have grown, but the pace of growth is slower than other sectors. In the last five-year period (2012 to 2016), giving to this subsector grew at an average rate of 3.8 percent per year— making it the slowest growing subsector out of nine. Giving to religion failed to outpace the five-year average rate of growth in total giving of 5.6 percent.
One reason for this for may be that there is declining membership to places of worship. Perhaps this reflect the reality that attendance and affiliation numbers are largely down across denominations, impacting engagement. According to the report, historically, religious giving just barely keeps pace with people’s incomes. In many households, income has also been flat or even declining. (It is important to understand the methodology of the report as religious giving does not include gifts to religiously affiliated charities, such as Jewish Federations, Jewish camps and other organizations, which are included in other sectors.)
Mega Donors: Jewish donors are leading the trend of large and impactful donations. The largest mega-gift in 2016 was by Michael Bloomberg of $600 million and Larry Ellison’s $200 million gift makes half of the top gifts this year by Jewish donors. The only mega-bequests included this year was $400 million from the estate of Howard and Lottie Marcus to American Associates, Ben-Gurion University of the Negev.
Arts and Education: Giving to the arts and education may also impact Jewish organizations. Blackbaud reported a strong increase of 13.0 percent for giving to K–12 organizations between 2015 and 2016. This figure would include Jewish Day Schools among the nonprofits reporting.
Jewish Federations: According to Giving USA, UJA-Federation of New York, one of the largest charitable bodies in the US devoted to Jewish causes, reported increasing fundraising totals for a fourth consecutive year, raising $2.6 million more than in 2015 to reach $153.4 million. When added to the $39.2 million raised through planned giving and endowments, as well as the $15 million for capital projects, UJA-Federation reported raising a total of $207.6 million in 2016. Funds were raised over a 12-month period and aimed to support displaced persons, vulnerable populations, and nearly 100 organizations on both local and global levels. According to The Chronicle of Philanthropy’s Philanthropy 400 index, the Combined Jewish Philanthropies of Greater Boston continued to lead the Federation world, enjoying both the largest amount of private support in 2015 at $392.0 million and the greatest percent increase in that support (34.9 percent) from 2014.
The Giving USA report shows that Americans remained generous and caring about their communities despite political and economic uncertainties this year. This report highlights trends and changes affecting nonprofit organizations. Giving USA: The Annual Report on Philanthropy has detailed America’s annual estimated charitable contributions – and how they are used – since 1956, making it the longest running study of its kind. The complete GUSA report plus an executive summary are both available at givingusa.org.