Several recent news articles and reports have announced that 2017 was a record year for U.S. philanthropy, citing a robust stock market and strong economy as drivers. For the first time, charitable giving exceeded $400 Billion, up 5.2% year over year. The articles also noted giving increases across all sectors, except international affairs, with more than 6% increases in gifts to:
- Arts, culture and humanities
- Social needs and benefits
- Animals and the environment.
We’d like to zoom in a little more on where the giving came from and where it went. To start, gifts to foundations represented the biggest increase in 2017, up 15.5% and totaling $46 Billion. And while the amount of individual giving by Americans has risen, the share of Americans donating to charity is falling. Between 2000 and 2015 this percentage has gone from 67% to 56%. The amount of disposable income dedicated to philanthropy is also declining, from 2.4% in 2000 to 2% today. According to Stacy Palmer, editor of the Chronicle of Philanthropy, “Many nonprofits have turned their focus to attracting more big gifts.” She also notes that “while wealthy people are keeping giving overall at record sums, the number of Americans who actually donate has dropped precipitously.”
In fact, the 10 largest donations totaled $10.2 Billion, more than double the $4.3 Billion from 2016. And of these 10 gifts, the 4 largest went to the donors’ foundations. These assets represent tremendous philanthropy and will be disbursed according to foundation guidelines and priorities, but they are not direct gifts to charity. Of the remainder, the next 5 went to various Universities, and the 10th to the Nature Conservancy.
There is some cause for concern that while giving by the extremely wealthy is increasing, giving across America, as a percentage of the population and as a percentage of disposable income, continues to decline. When nonprofits rely more and more on fewer and fewer large donors, the lack of donor diversity creates risk and economic downturns pose an even greater risk. Further, we have yet to see how the standard deduction in the new tax law will affect charitable giving in the months and years to come.
We encourage our readers to continue to directly support the needs in your communities and the world. Give to those needs that touch the hearts and minds of you, your family and your employees. Your giving matters—as the needs of the many are not all being met by the generosity of the few.