Giving USA: Charitable Donations of $316.23 Billion in 2012 Showed Slow Growth, Like the Economy

Chicago, Illinois (PRWEB) June 18, 2013

Even with households across the country feeling continued financial pressure, Americans donated an estimated $ 316.23 billion to charitable causes in 2012. Modest overall gains in total contributions mirrored the nations recent economic trends, Giving USA Foundation and its research partner, the Indiana University Lilly Family School of Philanthropy, announced today.

The 3.5 percent year-over-year growth rate (1.5 percent adjusted for inflation) in gifts from American individuals (both households and bequests from their estates), corporations and foundations matches the same figurative portrait of 2012s economic indicators some trends were positive, others were negative, but overall, there was growth. Federal tax policy shifts likely also played a role in giving decisions made last year.

The findings are contained in the 58th consecutive edition of Giving USA, the seminal annual report on charitable giving in America. When you consider all the factors that go into determining how much we give to charity, modest growth makes sense and is actually encouraging, said Gregg Carlson, chair of the Foundation, which publishes Giving USA. Most households feel pressured at every economic corner, but the longstanding social contract between Americans and the nonprofits they believe in remains resilient and intact; many see giving as a core budget item. The amount devoted to that category might shift up or down with annual economic realities, but it doesnt go away.

He added, The $ 316 billion in total giving reflected by our 2012 data continues the positive twin trajectory of dollars coupled with hope. I would say the outlook is positive for those who believe in and understand the power of American philanthropy.

Beyond financial pressures, 2012 also saw policy changes considered at the federal level that could alter future giving, including proposals aimed at capping or eliminating the longstanding charitable tax deduction. Although the American Taxpayer Relief Act of 2012 preserved the deduction, the publicly aired proposals may have fueled some giving decisions, said David H. King, CFRE, chair of the Giving Institute.

Philanthropic giving fares best in a known environment, and has been dependent, in part, on certain factors holding true over the decades, including the charitable tax deduction, said King. The uncertainty among donors created by policy makers examination of the charitable deduction likely influenced giving in two very different ways in 2012. Some donors may have prepaid gifts they had intended to make in 2013 to ensure they received a tax benefit, while others may have chosen not to donate out of concern that deductions for very large gifts would not carry over in 2013 and beyond.

Nearly 50 years of data indicate that while the policy environment can have an impact on the timing and amount of charitable giving, especially from donors at higher income levels, the overall giving climate is primarily influenced by economic factors, which were mixed in 2012.

As in the economy overall, some aspects of giving are growing more than others, said Gene Tempel, Ed.D., CFRE, founding dean of the Indiana University Lilly Family School of Philanthropy. For example, the 9.9 percent inflation-adjusted growth in corporate giving was driven by strong gains in corporations pre-tax profits, which marks a bright spot. In contrast, foundation giving grew by 2.3 percent after adjusting for inflation.

Mixed economic factors are also shaping the slow uphill climb giving has been experiencing in recent years following several difficult years at the end of the last decade.

While total charitable giving is continuing to grow, at current growth rates it is less likely to reach the 2007 benchmark high of $ 344.48 billion for at least six to seven years adjusted for inflation, said Patrick M. Rooney, Ph.D., an economist who is associate dean of academic affairs and research at the Indiana University Lilly Family School of Philanthropy. Individual giving rose 1.9 percent after inflation, perhaps reflecting the fact that the average household is still struggling in some areas.

Topline Considerations from Giving USA 2013 about Donors:

2012 saw marked year-over-year growth in corporate giving, which is strongly linked to companies profits. For 2012, corporate pre-tax profits surged upward 16.6 percent, according to the Bureau of Economic Analysis.

Corporations represent a vital portion of our countrys total charitable giving, Carlson said. And while their donations increased last year, corporate philanthropy represents only 6 percent of total giving.

Nonprofits should remember that in most cases, their mission must align with the companys strategic priorities, added Carlson. For example, you might see a grocery-store chain partnering with food pantries vs. other types of nonprofits, or a financial services corporation supporting math education.

Uncertainty fueled by mixed economic indicators may have moderated giving by individuals, who historically account for the largest percentage of total giving. Positive trends, such as the 13.4 percent increase in the Standard and Poors 500 Index between 2011 and 2012, the slight rise in home values, and overall lower unemployment rates and fuel costs, were combined with budget concerns and tax reform discussions. In addition, personal disposable income rose 3.3 percent and personal consumption expenditures rose 3.6 percent last year, virtually mirroring the growth in individual giving.

A Closer Look at the Data:

Giving by individuals rose to $ 228.93 billion in 2012, an estimated 3.9 percent increase (1.9 percent adjusted for inflation). Income and wealth are key drivers of household giving, as is a sense of financial security. Giving by taxpayers who itemize their gifts represented 81 percent of the total donated by individuals in 2012.

Giving by bequest decreased an estimated 7.0 percent in 2012 (8.9 percent adjusted for inflation) to $ 23.41 billion. Itemizing estates contributed 78 percent of the total, or $ 18.31 billion. Bequest giving tends to be volatile from year to year, as it is highly influenced by very large gifts from estates that closed during that year.

Giving by corporations rose 12.2 percent in 2012 (9.9 percent adjusted for inflation), to an estimated $ 18.15 billion, including gifts from both corporations and their foundations. The two entities provide cash, in-kind donations and grants. Increasing the 2012 total was the estimated $ 131 million corporations gave to nonprofits working on relief efforts in the aftermath of Hurricane Sandy.

Giving by foundations increased 4.4 percent (2.3 percent adjusted for inflation) to an estimated $ 45.74 billion in 2012, according to figures provided by the Foundation Center. Giving by community foundations grew 9.1 percent last year, which helped to bolster the total. Operating and independent foundations increased grant making by 3.5 percent and 3.9 percent, respectively.

Topline Considerations from Giving USA 2013 about Recipients of Charitable Contributions:

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