Charitable Giving Holds Steady

Charitable giving grew last year but by only 1 percent, reflecting both a slowdown in the economy and the unusual generosity of the mid-1990s, an annual study shows.

Giving in 2002 rose to $240.92 billion from $238.46 billion the previous year, according to the "Giving USA" report released Monday by the Indianapolis-based American Association of Fundraising Counsel.

When adjusted for inflation, charitable contributions of all types declined one-half of a percentage point compared with 2001, the report said.

"Growth in giving has diminished substantially from the mid-1990s," said Leo P. Arnoult of the counsel, a group of fund-raising consultants. "The decline is an issue and a concern."

While the findings may partly offset anecdotal information about hard times for charity groups, they offer further evidence of a sharp turnaround in giving over the last decade, Arnoult said.

In five years of rapid economic growth that began in 1996, giving posted annual increases in the double digits - ranging from 11 percent to 15 percent. That was the strongest string of growth years in the more than five decades the "Giving USA" report has been compiled.

But giving in 2001 posted just a 4.5 percent increase, followed by last year's 1 percent rise.

Giving by individuals, which makes up about three-quarters of all donations, increased 0.7 percent in 2002, not adjusted for inflation.

Grants by foundations decreased 1.2 percent to $26.9 billion - a reflection of last year's stock market decline, Arnoult said.

That decline was offset by a 10.5 percent increase in corporate giving to $12.2 billion, according to the report, compiled from research by Indiana University's Center on Philanthropy.

Many corporations are expanding their philanthropic efforts to counter publicity about accounting scandals and win over customers, employees and shareholders.

"I think you've probably seen more growth because of some of the ethical misconduct you've seen," said Marc Drizin of Walker Information, an Indianapolis-based research company that studies corporate giving. "But I think companies more and more are understanding that there is a business value of giving to the communities they serve in."

Giving to human services declined last year, while donations to environmental and international causes rose, according to the study.

Many human services charities, Arnoult said, face a triple whammy: a drop in donations, declining government support and increased demand amid high unemployment.

Still, Arnoult sees last year's modest overall giving rise as positive.

"Given the continuing soft economy, and all the fear in 2002 about terrorism and the uncertainty about the brewing war in Iraq and declining stock market," he said, "it could have been much worse."

By Mark Jewell