June 3, 1999 | Read Time: 8 minutes
Report says donations to charities soared by 9% last year, to $175-billion
Donations to charity rose nearly 9 per cent last year, according to the new edition of Giving USA released last week.
Gifts totaled $175-billion, according to the report,
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which is the latest in a series issued annually by the American Association of Fund-Raising Counsel Trust for Philanthropy.
Some categories of charities saw gains of 15 per cent or more, after accounting for inflation, the report says.
United Ways, civil-rights organizations, consumer-protection organizations, scientific-research groups, and other organizations that Giving USA classifies in a catchall category saw the biggest increase — 27.5 per cent.
Donations to environmental groups rose by more than 26 per cent, and giving to human-services organizations increased by more than 25 per cent. Health organizations and hospitals saw donations grow by 18.6 per cent.
Arts and culture groups were the only the type of organization that saw a decline. Gifts dipped by 2.3 per cent, the second year in a row that contributions to such groups dropped.
Editors of Giving USA, as well as fund raisers and non-profit leaders, say the growth was largely due to the continued strong performance of the stock market, and that the market’s dip in the late summer appeared to have little effect on giving.
Giving USA editor Ann E. Kaplan attributes much of the increase to the affluent households that have benefited from the current economic boom. “Higher-income households are accounting for more giving,” she says. Ms. Kaplan notes that, as stock prices continue to rise, “by transferring the same stocks as in previous years, people are making a bigger gift.”
While the annual release of Giving USA is eagerly awaited by many fund raisers, some experts say they question the reliability of its figures. Even Ms. Kaplan says the numbers are simply estimates, and that the projections are harmed by a lack of good data on donation trends. Concern about the quality of data on giving has led the Urban Institute to call a meeting of scholars and other experts to develop a more comprehensive and academically sound way to determine the state of giving.
While the specific figures may not be on the mark, Giving USA is thought to accurately portray the degree to which American philanthropy depends on gifts from individuals rather than on grants from corporations and foundations. It estimated that individuals accounted for 85.1 per cent of all donations, including bequests. Total giving by individuals amounted to $148.5-billion in 1998, a rise of 8 per cent from 1997.
The amount of money that foundations contributed to charity grew by an estimated 21 per cent last year, to $17.1-billion — nearly double the previous year’s increase of 11.4 per cent. It was the third year in a row that the largest rate of increase in giving came from foundations.
The strong stock market caused foundations’ assets to jump 23 per cent in 1997, to $329.9-billion, according to the Foundation Center, in New York. Since many foundations decide how much to give based on their financial performance the previous year, the 1997 increase was a big factor in 1998 giving. By law, foundations must give away at least 5 per cent of their assets each year.
Companies, meanwhile, increased their charitable giving by 7.7 per cent, to $8.97-billion. Still, that figure amounted to just 1 per cent of corporations’ pretax income.
However, a growing number of companies support non-profit organizations through marketing, public-relations, and advertising partnerships, which are generally not counted in their charitable-giving budgets. Such support is not included in the Giving USA estimate.
Here is how various types of non-profit groups fared last year, according to Giving USA estimates:
United Ways and public-interest groups. Contributions to United Ways, civil-rights groups, consumer-protection organizations, and other groups lumped together under the category “public and society benefit” organizations received 6.2 per cent of all donations made by Americans last year.
United Ways across the country raised $3.4-billion last year, a 4.7-per-cent increase from the previous campaign season, according to United Way of America.
A program that began more than three years ago is starting to pay off for the United Way of Minneapolis Area, whose private donations in 1998 rose 6 per cent, to $57.3-million — the best percentage increase in a decade. The organization also raised more from first-time donors than it ever had in the past.
The charity formed a committee of investment bankers, securities analysts, and venture capitalists to help identify businesses in the area with the most growth potential. With the committee’s help, the United Way has been able to add 100 of those companies each year over the past two years to the more than 2,000 businesses where it solicits workers.
“Our goal is to identify companies that over a three-year period could produce $10,000 in individual donations,” says Jim Colville, president of the United Way. “We are very selective — we take on about 100 companies each year and give each one a lot of individual attention. The program is not designed for volume, it’s designed for quality.”
Environment. The 26.3-per-cent increase posted by environmental groups was the largest gain such groups have seen since 1988, when Giving USA first included that category in its study. The increase was much larger than in 1997, when giving rose by 4.9 per cent. Still, environmental groups received only $5.25-billion, just 3 per cent of all contributions.
Dave Evancich, vice-president for marketing at the World Wildlife Fund, in Washington, says he was not surprised by the growth.
“It’s about the evolution of giving to environmental causes,” says Mr. Evancich, whose organization raised $35.4-million in 1998 — up 12 per cent from the previous year. “Development and giving programs and marketing programs at environmental organizations are probably growing faster than in some of the other sectors, where they’re pretty mature.”
Social services. Donations to social-services organizations rose to $16-billion. The 25-per-cent increase far exceeded the previous year’s growth rate of just 1.8 per cent.
Leaders of social-services groups say that they had been harmed in the past by politicians who attacked welfare and aid to the poor. As those attacks abated, contributions became easier to obtain.
“That has increased the appeal toward giving by the private sector,” says Gordon Raley, executive director of the National Assembly of National Voluntary Health and Social Welfare Organizations, which represents the nation’s largest social-services charities.
Health. Donations to hospitals and other health charities rose by 18.6 per cent, to $16.9-billion. Ms. Kaplan of Giving USA says most of the growth appeared to be among small and medium-sized health charities, while the largest organizations showed smaller rates of growth.
Still, some large organizations fared well. The American Diabetes Association saw contributions rise by 10 per cent, and the charity expects a 13-per-cent increase in fiscal 1999.
“People are much more aware of health, and much more aware of the fact that they can impact their health and that they can adjust their risk of getting diseases,” says John Graham, the association’s chief executive officer. “People are looking to organizations like ours to help them do that.”
Other health fund raisers said that the increase reflected donors’ financial well-being.
Catholic Healthcare West, a health-care system with 47 non-profit hospitals in California and Nevada, credited the stock market for its 11-per-cent increase in donations. The organization raised $69.9-million last year.
“It has more to do with the economy and people’s sense of the future than people’s specific sense of wanting to bail out health care,” says James P. DeLauro, the institution’s vice-president for fund development.
Education. Donations to educational institutions, including colleges and universities, schools, and libraries, increased by 9.1 per cent, to $24.6-billion, according to Giving USA.
A separate report released at the same time as Giving USA showed that donations to such institutions have been quite strong. The Council for Aid to Education reported that private gifts to colleges and universities increased by 15 per cent during the 1998 academic year. Private schools that participated in its survey saw giving rise by 31 per cent.
International. International-aid groups saw contributions rise by 7.6 per cent, an increase that was far smaller than the 12.4-per-cent gain they saw in 1997. Over all, international groups received $2.1-billion, the smallest share of total contributions to charity.
Still, international-relief groups say they were buoyed by the figures.
Albert Brill, director of development for Catholic Relief Services, says donations to his charity rose by 18 per cent last year, to $82-million. He attributed the increase to Americans’ response to a series of humanitarian emergencies, including famine in the Sudan, and Hurricane Mitch, which devastated parts of Honduras and other Central American countries.
Of the more than $30-million that the charity has raised so far this year, at least $10-million has been earmarked for the war in Kosovo.
Religion. Giving to churches, synagogues, and other religious institutions crept up just 3 per cent, to $76.1-billion.
The Society for International Ministries, in Charlotte, N.C., had a 9-per-cent increase in giving, thanks to a merger with the African Evangelical Fellowship. Without the merger, the increase would have been just 3.8 per cent.
Churchgoers give a smaller percentage of their income to religious organizations than they used to, says Fred C. Ely, the society’s vice-president. Earlier generations were encouraged to give 10 per cent of their income to the church, he says, but many religious institutions no longer teach tithing because they don’t want to come across as self-serving.
Arts. Arts groups saw an overall decline in contributions for the second year in a row, according to Giving USA, though this year’s dip was just 2.3 per cent — about half as much as last year’s.
The decline is due mostly to a drop in giving at medium-sized organizations, according to the report. Very large and very small groups had overall increases of 6 per cent.
