The Giving USA 2018 report fuels optimism for continued philanthropic growth
2017 was an important year in philanthropy. For the first time in history, Americans gave more than $400 billion, across all sub-sectors of the philanthropic community, which represent an increase of over 5% from 2016.
What organizations benefited?
Religious and faith-based organizations continue to lead the pack, as they have historically, bringing in $127 billion in contributions, a rise of 2.9% from 2016. Despite the increase of top-line revenue, the rate of growth at 2.9% is well under the overall average of 5%. This may be a side-effect of declining rates of attendance and affiliation at houses of worship, particularly among younger Americans.
Education and Human Services follow giving to Religion, bringing in $59 billion and $50 billion respectively. Both of these sectors saw an increase of more than 5% compared to the previous year.
Both Education and Human Services have been steadily increasing, especially during the social media age, as individuals can support their causes not only by traditional donations or volunteering efforts, but can be a modern spokesperson of these causes by utilizing these new outlets to help spread their message, and more importantly, engage new donors. This new sense of modern community and how people interact with one another has helped the sustained growth of these two subsets.
Foundations on the rise?
By far, the biggest increase over 2016 was the 15.5% growth in giving to Foundations, totaling $46 billion. Foundations are unique as they accepted over 10% of all donations last year, and were also responsible for giving over 10% of all donations going to other philanthropic organizations.
A big factor in this shift is the rise of mega-gifts contributed by the world’s wealthiest philanthropists through their individual foundations to help fund chosen causes. Facebook’s Mark Zuckerberg, Dell’s Michael Dell and Bloomberg Media Group’s Michael Bloomberg, contributed a combined $3.5 billion to their respective foundations. Giving from these three individuals represents nearly 1% of total giving last year.
Why the growth?
Despite this growth in mega-gifts, the majority of giving still comes from individual donors. The main driver of growth seems to be tied to the overall health of the economy. In 2017, personal income grew by 3.1%. Americans are generous when it comes to supporting causes that help their community but giving is still highly discretionary spending. An increase in personal income combined with strong consumer confidence and low unemployment correlates to an overall increase in donations.
Will the trend continue?
Although last year’s numbers are encouraging and give reason to be optimistic about 2018, some organizations are still tempering expectations. The effects of this year’s changes to the tax code, specifically as they relate to the charitable giving deduction, are an unknown. Many experts feel that this may slow, or possibly reverse the four year trend of year-over-year growth in giving.
Nonetheless, the previous four years, and especially 2017, show Americans remain generous; continued low unemployment and a strong economy should portend well for 2018.