Philanthropy in America remains strong, and charitable giving has grown again this year, the fourth consecutive year of increases in total giving (in current dollars). Charitable giving in all sectors – individuals, bequests, corporations and foundations – rose in 2017, advancing nearly all categories of recipients. According to The Giving Institute’s annual report released today, America continues to be a very generous nation. In its report, Giving USA 2018: The Annual Report on Philanthropy for the Year 2017, the growth 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 5.2 percent between 2016 and 2017 (3.0 percent, adjusted for inflation), to $410.02 billion in contributions. This rise reflects growth in giving to nearly all of the major recipient subsectors, and strong growth in giving by individuals.
Highlights about Giving by Source
Giving by individuals comprised 70 percent of total giving in 2017. This totaled an estimated $286.65 billion, rising by 5.2 percent from the previous year.
Giving by foundations—which includes grants made by independent, community, and operating foundations—amounted to 16 percent of all gifts made in 2017. This rose 6 percent from 2016.
Giving by bequest accounted for 9 percent of all gifts made in 2017, totaling an estimated $35.70 billion, and increasing from 2.3 percent.
Giving by individuals, bequest, and family foundations amounted to an estimated 86 percent of total giving in 2017.
Giving by corporations comprised 5 percent of total giving in 2017, totaling $20.77 billion, though it stayed even with prior years in terms of a percentage of pre-tax dollars. Corporate giving includes cash and in-kind contributions made through corporate giving programs, as well as grants and gifts made by corporate foundations.
The single largest contributor to the increase in total charitable giving in 2017 was an increase of $14.27 billion (5.2 percent over 2016, in current dollars) in giving by individuals. Key economic factors associated with giving including financial markets posted strong growth in 2017. The S&P 500, which is a leading strong indicator, posted growth of 19.4%. Personal consumption also grew in 2017. Very large, or mega, gifts, or gifts by individuals that require an adjustment to the econometric estimate, totaled $4.1 billion in 2017. The sectors that benefited most from mega gifts in 2017 were education, health and the arts.
Though the trends tend to follow economic growth, and philanthropy is generally a lagging indicator, giving is stable as the percentage of both GDP and individual wealth is stabilized. The Baby Boomer generation continues to mature and retire, and new generations of leaders and donors are emerging. Individual giving remains the most important driver of the philanthropic marketplace (Family Foundations often act as individuals), and should remain a high priority focus for nonprofits.
This past year, the number of donors adding to their giving portfolios increased for the first time since 2010. Donors are not only giving to charities that they have given to in the past, but they are expanding the number of nonprofits that they support – perhaps a result of the heavier focus among emerging leaders on ROI and impact of giving, together with diminished “brand loyalty” that drives giving today. That being said, the trend for top heavy giving is strong. The wealthiest donors are increasing their gifts, although the number of individual donors continues to decline, as in years past. Overall giving also decreased from lower income and middle income donors.
Highlights about Giving By Sector:
Giving to religion remains the top destination for charitable dollars. Giving to religion is at its highest level, at $127.37 billion.
Giving to education increased from 2016, to $58.90 billion.
Giving to human services is at its highest level, and increased to $50.08 billion, from $46.80 billion in 2016.
Giving to health is at its highest level, at $38.27 billion, from $33.14 billion in 2016.
Giving to public-society benefit is at $29.59 billion (from $29.89 billion in 2016).
Giving to arts is at its highest level, at $19.51 billion (next highest was $18.21 billion in 2016).
Giving to international affairs declined this year, to $22.97 billion.
Giving to environmental and animals is at its highest level, increased to$11.83 billion from $11.05 billion last year.
Giving to foundations increased this year to $45.89 billion, from $40.56 billion in 2016.
Donor Advised Fund giving is captured by foundations and public society benefit. Giving to Donor Advised Funds is growing three times as fast as overall giving. Nearly two-thirds of the top 50 gifts went to foundations and donor-advised funds.
The decline in giving to International Affairs is on particular interest. This is due to domestic national disasters in 2017 which focused giving on stateside need. As disasters are unpredictable, the impact they have in how they will affect giving is uncertain. The impact that the new tax code will have on giving also remain unknown.
A new trend that emerged in 2017 was the phenomenon of “rage donations,” or donations in response to anger and frustration to something in the public sphere. The long-term impact of rage donations remains unknown, but retention for these donors, if the past is any indication, is expected to be low.
Looking ahead to 2018, based on trends gleaned from the data in the report, the best practices for nonprofits include building a major gift infrastructure and focus on individual donors and donor retention. Addressing the expectations of emerging leaders and major donors, it is important to effectively communicate data that reflects achievements, results, and ROI clearly presenting the impact of dollars and the connection to impact on individual’s values. Strong economic indicators to date predict that 2018 will also be a strong year for charitable giving.
Donor Advised Funds (DAFs) have increased in importance, and they continue to grow in popularity as a platform for philanthropy. The flexibility of the DAF, enabling of donors to inject more strategy and focus into their giving, is contributing to the expanded use of this effective tool.
The Giving USA report shows that Americans remained generous and caring about their communities, despite an unsettled political landscape. 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 givingusareports.org.
To review slides from our recent webinar on Giving USA 2018, please click here.
Avrum Lapin is President, Rebecca Molberger is a Consultant, and Andrea Otto is Marketing Coordinator at The Lapin Group, LLC, based in Jenkintown, Pennsylvania, a prominent full-service fundraising and management consulting firm for nonprofits. The Lapin Group inspires and leads US-based and international nonprofits seeking fund, organizational, leadership, and business development solutions, offering contemporary and leading-edge approaches and strategies. A Board member of the Giving Institute and a member of the Editorial Review Board of Giving USA, Avrum is a frequent contributor to eJewishphilanthropy.com and speaker in the US and in Israel on opportunities and challenges in today’s nonprofit marketplace.
My colleagues and I welcome your comments and emails. Let us know what you think. Please feel free to contact us at The Lapin Group at 215-885-1550 or email@example.com to discuss this further.