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Several recently released reports are shedding
light on charitable giving in 2009.
A number of these studies are based on
surveys of actual gifts to various charitable
organizations and institutions, while others use
econometric models to estimate giving based on
analysis of various sets of data. Because these
studies use such different methodologies, as
might be expected they do not always come to
the same conclusion about the state of charitable
giving in America. The reports for 2009
are no exception.
Results of surveys
In February of 2010, the Council for Aid to Education
(CAE), a subsidiary of The Rand Corporation,
released the results of its survey of charitable giving
to higher education. The findings reveal that giving to
higher education dropped by over 12% in the fiscal year
that ended June 30, 2009, which is the largest drop in
the survey’s 50-year history. The survey further reveals
that giving to higher education by individuals fell by
nearly 18%.
The Association of Healthcare Philanthropy (AHP)
has reported that giving to healthcare in the calendar
year 2009 (85% of which comes from individuals) fell by
11% from 2008. Additionally, a study released by Target
Analytics shows that gifts under $5,000 by 38 million
donors to 79 of the nation’s largest mass-based organizations
declined by a median of 4.8% in 2009, with half
reporting declines greater than that amount.
The Chronicle of Philanthropy reports that even
among the nation’s 400 most successful fundraisers,
a group known as The Chronicle’s Philanthropy 400,
giving in 2009 declined 10%. The Chronicle has also
announced a a decline of 64% in the amount of gifts of
$1 million or more last year.
Predictive models
In contrast to results of surveys of gifts received,
predictive models base their estimates on analysis of economic and demographic data. Perhaps the most
widely cited predictive modeling effort is the
Giving
USA report, which is prepared by the Indiana University
Center on Philanthropy and released each June.
While often misinterpreted by the press as a definitive
pronouncement on giving in America, the Giving USA
report is intended to be only a preliminary estimate of
giving for a particular year.
Based on analysis of general economic trends such
as gross domestic product and personal income, factors
that have proven to correlate to a large extent with
trends in giving in past years, the Giving USA model
does not attempt to take into account the national
mood, consumer sentiment, unemployment rates, or
other factors that may have influenced charitable giving
in the year for which predictions are being made.
The model has also never been tested in the midst of an
economic downturn as severe as the one Americans are
currently experiencing.
These limitations may help explain why Giving
USA estimates for giving in 2009 differ significantly
from the survey results announced by CAE and others.
The recently released Giving USA report for 2009
estimates that charitable giving in America last year
reached $303.75 billion, a decline of 3.6% from adjusted
2008 levels. The initial account for 2008 also revealed a decline from 2007 numbers, but a revision of 2008
figures based on subsequently released IRS data now
indicates that Americans surprisingly gave more in
2008 than in 2007.
That was due to a
significant increase in
bequests in 2008 driven
by a handful of exceptionally
large gifts via estates.
Bequests returned to a
more normal level in 2009,
but still were up slightly
over 2007. The Chronicle of
Philanthropy also reported
a surge in large bequests
in 2008. Seven of the top
ten gifts in 2008 came in
the form of bequests. By
contrast, there were no
bequests listed among the
top ten gifts in 2007. The
sharp increase in bequests in 2008 mirrors charitable
giving during the Great Depression, when bequests
accounted for a higher percentage of charitable giving
and helped many institutions weather the economic
storm. See the March 2009 issue of Give & Take for
more information on bequests in recessionary times.
Remarkably, Giving USA reports that giving by
living individuals in 2009 ($227.41 billion) declined
by just 0.4% when compared to 2008 figures ($228.23
billion) and was essentially flat when adjusted for inflation. These numbers contrast sharply with CAE and
other survey results referenced above, which reveal a
much larger drop in individual giving.
While Giving USA is perhaps the most widely cited
predictive model for charitable giving, another recently
released predictive model prepared by Paul Schervish
and John Havens of The Boston College Center on
Wealth and Philanthropy estimates that overall giving
in 2009 fell by roughly 5%. Unlike Giving USA, the
CWP study takes unemployment rates into account
when estimating giving.
IRS numbers for itemized
gifts in 2008 will be released later
this summer and should shed
further light on the actual level
of giving in 2008. Just as IRS
reports for estate gifts resulted
in an upward revision by Giving
USA for 2008, future data could
lead to an upward (or downward)
revision for 2009.
To learn more about the
Giving USA report, see the
Giving USA Foundation’s Web
site at www.aafrc.org. For more
information from The Chronicle
of Philanthropy, visit www.philanthropy.com.
Details about the Council for
the Aid to Education’s report may
be found at www.cae.org.
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