The Key to Better Research on Charitable Giving: More Financial Support

To the Editor:

We would like to thank The Chronicle for calling attention to the need for more financial support for good research about the non-profit sector (“Report’s Numbers Are No True Measure of Charity, Critics Say,” June 3). The article on Giving USA also makes a strong case for the value of this research to our country. Though it may seem like a daunting task, there is a feasible and specific research agenda that the American Association of Fund-Raising Counsel Trust for Philanthropy has already identified.

First, the estimate of personal giving, though quite solid in fact, could be improved with more funding to determine the amount of giving in non-itemizer households. These households make up only 20 per cent of the giving, and the research that has been done on them is not as poor as it is sometimes said to be. Still, more information about them would go a long way toward perfecting this statistic. The research community will bemoan the fact that there is no perfect way to obtain this information, but that is always the case with research, especially in the social sciences. A very good way to seek information is to get better data though household surveys.

Second, data about religious non-profits could be improved through such research as Independent Sector’s survey From Belief to Commitment: The Community Service Activities of Religious Congregations in the United States. The estimates yielded from those studies are very good. To update the data between those comprehensive reports, we need to expand the number of religious organizations surveyed in the interim.

Third, data about non-religious non-profits could be improved by tripling the sample size of the Giving USA survey and then doing increased follow-up to insure a high response rate. That would enable us to revise base-line numbers, to keep the addresses in the data base up to date, and to more reliably estimate changes in giving. Moreover, it would permit a more detailed analysis of giving to organizations of differing sizes. Where such surveys are already being done with large samples, such as the survey done by the Council for Aid to Education at RAND, we should insure that the survey process does not eventually become too expensive for the organization to want to conduct.

Fourth, bequest estimates would be improved by collecting data from states to supplement the data collected at the national level. National data, representing federal estate-tax returns, do not have data about small estates, but such data are available at the state level.

This basic four-part agenda is not so hard to visualize and only requires adequate funding and cooperation among research organizations to be successful. The Giving USA advisory committee comprises a large group of collaborating institutions, and many organizations not on the committee have been willing to work with the A.A.F.R.C. Trust for Philanthropy cooperatively. Those groups all cooperate without worrying that their data will be co-opted or their turf infringed upon.

So, the A.A.F.R.C. has earned the trust of organizations that collect data, scholars who analyze data, and the non-profits that cooperate by returning the survey. The A.A.F.R.C. is also a key disseminator of research findings, has a broad audience, and a mission to educate the public. The only missing link is funding.

In the Chronicle article, the researcher Paul G. Schervish put the price tag at millions of dollars, and that is probably an accurate estimate of what is required. In the context of current-day philanthropy, $5- or $10-million is not an unthinkable amount of money….

Great minds are ready to work on the problems that exist, and a feasible research agenda has been outlined above. That there are many more projects we could identify is no reason not to start research in the areas we already know we can focus upon.

We would also like the opportunity to comment on the article that summarized our numbers (“A Giving Boom,” June 3). The article never states that the percentage increases are given in inflation-adjusted dollars. Because inflation is low and giving is up strongly, this doesn’t grossly distort all of the story, but it does distort the decline in arts giving, which was negligible. It looks much more significant to say arts giving declined by 2.3 per cent than to say it barely changed, falling almost imperceptibly — by less than 1 per cent in current dollars. In general, since measures of inflation are estimates themselves, it compounds estimating error to speak of the whole report in inflation-adjusted terms, even when you do inform your readers that you have done this. Better to leave the numbers in current dollars and let people make adjustments themselves, if there isn’t room to show both series.

Also, the article uses the phrase “catchall” to refer to the area called public/society benefit. The term makes the categorization sound sloppy. But the National Taxonomy of Exempt Entities is a precise system, developed not by the A.A.F.R.C. Trust for Philanthropy, though we participated in its development, but by a consortium of major non-profits and foundations, with substantial cooperation from the I.R.S. In a way, all the categories are “catchalls,” but it’s not like everything falls neatly into place and whatever doesn’t gets swept into a “catchall” category. A lot of time, money, and intelligence went into the classification system.

Also on the topic of categories, the human-services category was labeled “social services,” implying that all the funds in this area go to assist those in need. This is absolutely not the case. Especially when questions are raised about the formation of public policy based on the data, it would be more responsible to use the National Taxonomy of Exempt Entities terminology, which covers an array of services, including sports and recreation.

Finally, we would like to address the matter of the sample size. The sample of organizations was 3,000, not 700. The latter number represents the completed surveys, and is supplemented by higher-education and independent-school data from the Council for Aid to Education as well as data about gifts to foundations that come from the Foundation Center. … The sample is larger and the universe is smaller than the article states. With $100,000 in additional funding, we could again triple the sample size.

And this brings us back to the research agenda outlined above. The A.A.F.R.C. Trust for Philanthropy has outlined specific projects that would improve the data we as a nation rely upon to gauge charitable giving. In this agenda resides an opportunity for the funding community to decide that it would like our country to take its information on charitable giving to the next level. The trust is prepared to move the agenda along, and has a history, spanning more than four decades, of working efficiently in the realm of the possible. The trust has been a voice of optimism and practicality in this field and has the track record to prove it.

Nancy L. Raybin
Chair

Ann E. Kaplan
Research Director
American Association of Fund-Raising
Counsel Trust for Philanthropy
New York

The Chronicle’s article stated that figures were adjusted for inflation and noted that 700 organizations provided the data that were used to build many of the estimates in Giving USA.