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Giving and Getting

December 1, 2014

The holiday season is upon us, and many nonprofit organizations are making their appeals for year-end gifts. Accordingly, it's a good time to review just how nonprofits are doing with fundraising since the recession. The answer is both good news and bad news.

The good news is that charitable giving in the United States was up three percent in 2013, the largest year-over-year increase since the recession, according to Giving USA and the Indiana University Lilly Family School of Philanthropy. Donations from individuals, corporations, foundations and bequests topped $335 billion.

"It's really recovered," said Melissa Berman, the president of Rockefeller Advisors in a recent New York Times article. "America has a long, long tradition of generosity."

The richest donors, those Americans who make $200,000 or more in income, contributed $77.5 billion in 2012, which was $4.6 billion more than the year before according to a recent study by the Chronicle of Philanthropy. This $77.5 billion was 2.8 percent of these American's income that year, down 2.8 percent since 2006. Americans who earned between $50,000 and $75,000 donated 3.5 percent of their income to charity. But, the $335 billion in contributions is still less than the pre-recession high of $350 billion.

And there's the bad news. The actual dollars being donated by the wealthiest Americans is increasing, but the percentage of their income being contributed is decreasing. Stacey Palmer, the editor of the Chronicle of Philanthropy, attributes this phenomenon to growth in the number of wealthy Americans: "In some ways, because the ranks of the wealthy are growing, that means that more people are giving," she said.

In the same study, the Chronicle found that the rates of giving fell in many of the country's biggest cities, but in some places, the rates increased. Las Vegas, for example, saw an increase of 14.9 percent. Jacksonville saw an increase of 8.7 percent. Cities like Philadelphia and Buffalo saw donations fall by 10 percent or more.

Utah had the highest share of income donated to charity - 6.6 percent - presumably because of the presence of the Mormon Church, which encourages its members to give significantly to charity. In fact, nine of the top 10 cities where the giving rate was highest are in the so-called Bible Belt according to the Chronicle and the New York Times while Vermont, New Hampshire and Maine had the lowest rates.

And, where those contributions are going has "changed pretty significantly," according to Eileen R. Heisman, chief executive of the National Philanthropic Trust. Donations to organizations that fight homelessness and food banks spiked in 2008 and 2009, the worst years of the recession, while giving to the arts and education slumped.

But, as the economy recovers, "people are moving back to the areas where they have traditionally given," said Dr. Patrick M. Rooney, associate dean of Indiana University School of Philanthropy. It remains to be seen whether this trend continues in 2014 and 2015. But, efforts like last week's Giving Tuesday and new online donations sites like Kickstarter and RocketHub should help attract more and different donors.

"The Millennials are really committed to giving," said Ms. Heisman. "This isn't just a baby boomer phenomenon."

American Express just completed its annual employee giving campaign where we saw the participation rate of our employees increase from 75 percent to 80 percent in the United States, and from 51 percent to 69 percent in Canada. Employees pledged over $4.6 million to thousands of nonprofit organizations in both countries, which will be matched by the company for a total of over $9.2 million in donations. A great way to start the holiday giving season!

If you have a question or comment, please follow me on Twitter at @timmcclimon and start a conversation there.

Next week: Are Nonprofit Boards Doing Enough to Stimulate Giving?


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