Has charitable giving in the U.S. recovered from the Great Recession? The answer seems to be yes—but that giving might not look the same way it did ten years ago. Giving USA Foundation recently released Giving USA 2015: The Annual Report on Philanthropy for the Year 2014, its 60th consecutive report of charitable giving trends in the United States. As our economy has bounced back from the recession, so has philanthropy, and at a much faster rate than experts predicted: giving in 2014 rose to $358.4 billion, surpassing pre-recession rates. The report unearthed a few more surprises, including trends in individual and corporate giving. Below, three of the takeaways we found most interesting:
1. Individuals still contribute the largest percentage in absolute dollars to the overall charitable giving “pie,” but their giving grew slower relative to that of foundations and corporations. For the past 40 years, donations by individuals have represented the largest share of philanthropic giving. However, in 2014, the biggest growth came from corporations and bequests, followed by foundations. For example, corporations gave nearly 12% more in 2014 than in 2013, whereas individuals gave only 5.4% more than last year. This may be because corporate giving has peaked and dipped sharply several times since the height of the recession- including recently- while individual giving has steadily increased since 2008.
2. Small changes in giving (less than 1% of GDP) can make a big difference, but there’s room to do more. Just before the recession, total giving was 2.1% of GDP. That number dipped to 1.9% at the height of the recession, but returned to 2.1% in 2014. This 0.2% increase may seem small, but it’s equivalent to about $34 billion. There’s still room for improvement, however: As the Lilly school’s Patrick Rooney told the Philadelphia Inquirer, “We are happy that giving is at 2.1 percent. That being said, it’s a little frustrating that we’re stuck as a percentage of the GDP between 1.9 and 2.1 percent and we can’t really dial the needle higher as a society.”
3. There are other ways of giving that may not be captured in the report. Giving goes beyond charitable donations. Individuals give in many ways that are not captured on their tax returns, such as through mobile giving, crowdfounding projects, and helping a neighbor.The same goes for corporations: corporate philanthropy hasn’t kept pace with profits, but traditional measures of giving might not show the whole picture. As a percentage of profit, corporate giving was at a 40-year low in 2014, while profits were at an 80-year high, suggesting that corporations aren’t increasing their giving as profits rise. However, some corporations are giving in ways that may not be captured in this statistic. For example, “B- corporations,” or social enterprises, incorporate social benefits into their business plan along with their profit goals. As our Executive Director Kat Rosqueta told the Philadelphia Inquirer, “There is an overall trend in blurring the line between corporations focused solely on bottom-line profits and organizations with a dual purpose,” such as eyewear company Warby Parker, which dedicates some of its profits to providing eyeglasses in developing countries.
A final thought to keep in mind as these numbers make headlines: While increases in giving are encouraging, it’s how the money is spent that makes the difference.