Charitable giving is on the rise again
Nonprofits were hard hit during the Great Recession, with Americans cutting back their charitable donations as their own fortunes waned.
But thanks to a stabilizing economy, charitable giving has rebounded close to its pre-recession peak.
Individuals, corporations and foundations gave $335.2 billion in charitable donations last year, approaching the 2007 high of $349.5 billion, adjusted for inflation, according to a new report from Giving USA Foundation and the Indiana Lilly Family School of Philanthropy.
Individual giving rose 4.2 percent, fueled in part by large gifts of $80 million and more from single donors, couples and estates. Improving personal income and a significant rise in the S&P 500 stock index bolstered the fortunes of wealthy donors, the report notes.
Wealthier Americans are more likely to give to charities than those with mid-range or low incomes, Gallup said in December. For people with incomes of more than $75,000, 95 percent said they donated to charities, compared with two-thirds of those earning $30,000 or less.
At the same time, corporations trimmed their charitable giving in 2013 by 1.9 percent, after raising it by 16.9 percent in 2012.
The 2013 decline in corporate giving "makes clear how closely linked economic factors are to giving. While the S&P 500 was strong in 2013, corporate profits slowed substantially compared with 2012. Corporate profits are directly linked with corporate giving," said L. Gregg Carlson, chair of Giving USA Foundation and the president of Carlson Fund Raising, said in a statement.
The pickup among individuals, however, provides a reason for optimism, said Patrick M. Rooney, associate dean for academic affairs and research at the Indiana University Lilly Family School of Philanthropy. That's because the school had projected it would take several additional years to reach pre-recession levels.
Many of the country's wealthiest citizens are donating more to charities, with the top 50 donors giving $7.7 billion in 2013, according to a report earlier this year from the Chronicle of Philanthropy. That was a 4 percent increase from 2012, although total wealth among those on the Forbes' billionaires' list for 2013 jumped 17 percent from the previous year.
If giving continues to grow at the current rate, charitable donations may surpass the 2007 peak in just a year or two, the study noted.
Not all charities saw their boats lifted by the rising tide of giving, however.
Religious organizations failed to see a boost, as donations to them fell 0.2 percent between 2012 to 2013, while giving to foundations slipped by 15.5 percent and groups focused on international affairs saw a decrease of 6.7 percent.
The sectors that witnessed the biggest strength in giving included education, with an 8.9 percent rise, and arts and humanities groups, with a 7.8 percent increase.
"We see that giving to the arts, health, the environment and education has been consistently rising in the last three years," David H. King, president of Atlanta-based consulting firm Alexander Haas and chair of The Giving Institute, said in the statement. "These types of organizations, perhaps with a slight exception for health, are those for which donors reduced their support during the recession when they tended to give to organizations serving what they may have perceived as more urgent needs" such as food pantries and homeless shelters.