Today, Giving USA released its estimates for total charitable giving in the United States for 2011. This year, I’ve had the privilege of seeing the process of developing these numbers from the inside as a member of the board of the Giving USA Foundation. It has been a tremendous learning experience for me and has given me a new appreciation for the financial modeling and attention to detail it takes to track and compile these estimates.
That said, the numbers are in, and while things are better than they have been, the road ahead is still rocky.
According to Giving USA, charitable giving increased 4 percent in 2011 to $298 billion. This is the second straight year of growth after giving fell precipitously in 2008 and 2009. It is a testament to fundraisers and donors alike that in times of economic uncertainty, they have still found a way to collectively grow this total over the past two years.
Individual donors drove this growth. Gifts from living individuals increased by 3.9 percent to $217 billion, and bequest giving grew by 12 percent to over $24 billion. These numbers aren’t record highs, but it is important to note that individuals are showing a continued commitment to philanthropy as individual giving has always been the dominant source of charitable gifts in America.
There are significant challenges within these numbers too. The tide may be rising, but it is doing so very slowly, and it is not raising all ships equally. Giving to religion, the subsector that historically receives the largest share of charitable giving each year, fell for the second straight year in 2011.
And even though individual donors appear ready to reengage in philanthropy, institutional donors have been slower to loosen their purse strings during this sluggish economic recovery. Giving by foundations grew only 1.8 percent last year, and corporate giving fell .1 percent.
Inflation Adjusted Giving
In addition, when we adjust for inflation – which is a better measure of the actual buying power of the dollars raised – total giving was actually almost flat, growing only .8 percent. At that growth rate, it could take nearly a decade to recover the purchasing power lost since our charitable high water mark in 2007.
What lessons should you draw from these numbers? At JGA, we believe the primary lesson is that despite nominal growth, improvements in your fundraising bottom-line will still be largely dependent on how well you plan and execute your fundraising strategy.
Individuals are ready to give, and corporations and foundations are at least holding steady in their gifting, but there is no landslide of new money coming into the system that will wash over all of us. Thus, strategic development strategies and a focus on continued relationship building are more important than ever in continuing the philanthropic rebound in our country.