At the current pace of charitable giving it will be another six years before we reach pre-recession generosity, according to the 2013 report from Giving USA, which tracks giving in America.
Total giving by individuals, foundations and corporations reached $316 billion last year, up an inflation-adjusted 1.5% from $312 billion in 2011. It was the third consecutive year of increases, but the total falls far short of the inflation-adjusted $344 billion of charitable contributions in 2007.
Giving is recovering along with the economy, which comes as no surprise. This is a familiar pattern in philanthropic circles, though the pace of the recovery in charitable giving this time around seems unusually slow. Giving remains mired at just 2% of GDP, the lowest figure in at least 10 years. According to an analysis from the publication Nonprofit Quarterly:
“It only took three years after both the 1973-1975 recession and the 2001 recession for giving to meet or surpass the total giving level seen prior to the recession. But as of 2012, giving is still well below pre-recession levels, four years later.”
A couple of data points leap off the pages of the Giving USA report:
- Bequests are way down Typically, giving by bequest rises in a tough economy, fundraising experts say. But bequests fell 7% last year. This may be largely due to a shift in the way individuals contribute; increasingly they are choosing to “give while they live.” This trend is apparent in the blockbuster growth of donor-advised funds and, as Giving USA points out, “the single largest influence on the higher numbers last year was the additional $8.7 billion in gifts made by individuals.
- Corporate giving is way up Individuals account for nearly three-quarters of total giving. But corporations stepped to the plate in a big way last year, increasing inflation-adjusted giving by 10%. This is partly attributable to a 17% jump in pre-tax profits and a trend toward in-kind donations, where companies offer materials and products they manufacture.
Nonprofit Quarterly takes issue with the rise in corporate generosity:
“It must strike the millions of American workers who have been laid off from their jobs in the corporate world during the long and deep recession as anomalous. They can’t get their jobs back because corporations and other sectors are hiring so slowly that it will take until 2020 before the U.S. economy reaches pre-recession unemployment conditions. How is it that corporations are shelling out philanthropic dollars so generously when their overall economic behavior doesn’t appear to match?”
On the other hand, investing in workers is a whole different and more permanent economic decision. Charitable giving can be turned on and off in an instant—as each recession and recovery seems to prove.