Report: Philanthropy Is on the Rise … Albeit Slowly

The "Giving USA 2013" report on philanthropy says that while donations to charity are on the rise, they're far below their prerecession peak—and that recovery might take a while.

Charitable giving certainly isn’t on the decline, but its growth isn’t what it once was.

That’s the assessment of the 2013 report on the state of charity put out by the Giving USA Foundation, a public service initiative coordinated by the Giving Institute and Indiana University’s Lilly Family School of Philanthropy. More details below:

A long climb back: According to the “Giving USA 2013” report, charitable giving was up by a modest 3.9 percent in 2012 over the previous year in terms of individual gifts and gifts from corporations and foundations, which is definitely an improvement. However, while it’s the third consecutive year of growth, that’s far from the prerecession peak in 2007. After the steep decline in giving during the recession, it may take up to seven years for the totals to return to that previous level.

Where the growth was … and wasn’t: The sectors that saw the largest increases in giving between 2011 and 2012 included arts, culture, and humanities, which rose by 7.8 percent to $14.44 billion; education, mostly to colleges and universities, grew by 7 percent; and public-society benefits organizations, which went up by 5.4 percent. Most other sectors, including international affairs, health organizations, human services, and foundations, had more modest increases. One sector did experience a very slight drop: Religious giving remains the largest sector, representing 32 percent of all charitable giving, but giving in the sector slowed by 0.02 percent.

Parsing the results: Since the report’s release, a number of analyses have surfaced about what the results show, including from the Wall Street Journal and Nonprofit Quarterly.  The Manhattan Institute’s James Pierson argues in a WSJ op-ed that the results show the nonprofit sphere is now dependent on money from the federal government to function. “These are reputable institutions, and many of the programs they sponsor are important,” he writes. “Nevertheless, in view of their dependence upon government funds, no one can seriously maintain that these groups are ‘independent.'”

NPQ’s Michael Wyland takes things a step further, arguing that Pierson’s point shows the weaknesses of accepting a large amount of money from a single source. “Big money is seductive in its appeal, especially when the money appears to be mission-aligned and benevolent,” Wyland explains. “It’s often only later, with the regulations about contracting practices and board composition or the ‘guidance’ from a donor for the nonprofit to ‘modify’ its activities, that the organization realizes the control they’ve lost and the price they’ve paid for the big money.”

The “Giving USA 2013” report is available from the organization’s website.


Ernie Smith

By Ernie Smith

Ernie Smith is a former senior editor for Associations Now. MORE

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