Giving USA released its 2017 numbers in mid-June, and overall it is heartening. More than $410 billion was contributed last year to charitable organizations, a record high. Of the total, individual giving represented $286 billion (70 percent) and $66.9 billion (or 16 percent) represented foundation grants.
While it is great news that giving has finally rebounded after the recession, a closer look raises concerns. The total dollar figure for charitable giving is setting records—but the number of people giving to charity appears to be dropping. In fact, data in the Giving USA report show that the number of American households that give to charity has dropped 10 percentage points since 2000.
The percentage of U.S. tax filers claiming a charitable deduction is dropping too – it fell 15 percent between 2010 and 2015. This mirrors what GWP has seen in the Pennsylvania data: in the same time period, the percentage of Pennsylvania tax filers claiming itemized charitable deductions fell 8 percent – even as taxable income rose 25 percent. These data suggest that the most affluent donors are continuing to give, while mid- and lower-income donors are giving less or perhaps not resuming their giving post-recession.
Institutional philanthropy should care about these trends for several reasons. First, as noted in the Chronicle of Philanthropy, philanthropic ‘buying power’ is concentrating in the hands of fewer, higher-level donors. Nonprofits may find that a handful of major donors are gaining outsized influence on the organization. Second, a smaller number of high-level donors means that losing any one of them disproportionately impacts the organization. Third, the organizational lifeblood of unrestricted gifts may be harder and harder to secure, as major donors tend to give for specific purposes. Finally, it is troubling to see philanthropic power concentrating in the hands of fewer and fewer Americans – it erodes the broad base of public support every nonprofit should have.
Philanthropic networks like Alliance for Charitable Reform and Charitable Giving Coalition are tracking this issue. In the meantime, GWP members can help by bearing in mind that your grantees may be increasingly challenged to raise unrestricted funds. Any unrestricted grants you make will accordingly have even higher value to your grantees.