THE BLOG

Making a Difference: The World of Giving -- US Charitable Giving in 2012 Increases Again But Slowly

06/18/2013 08:04 am ET | Updated Aug 17, 2013
  • Lisa M. Dietlin CEO, Lisa M. Dietlin and Associates, Inc., philanthropic advisor, author

Yes, it's that time of year again when the numbers for donations in the previous year are released and everyone is wondering what happened in 2012. Did Americans make more or less charitable donations to their favorite charitable causes? Will giving ever return to the levels seen in 2007 which was the height of philanthropic contributions before the recession hit?

Giving USA Foundation with its research partner the Center on Philanthropy at Indiana University, released their annual look at philanthropy in the United States (a survey done annually since 1956) today, and the news for 2012 is very interesting, giving a snapshot of not just the landscape of charitable donations but of our people and country overall.

The good news is that, for the second year in a row, donations to the nonprofit sector increased. In 2012 they increased by 3.5% percent (1.5% when adjusted for inflation). This means gifts made by individuals, including bequests, as well as donations from corporations and foundations totaled $316.23 billion!

Americans continue to be seen as the most generous people in the world. Did you know that giving by INDIVIDUALS -- people like you and me -- account for almost 80% of all donations made in 2012 especially when you include bequests? And this is not unique to last year, but has been the trend for the last few years, even throughout the recent economic recession.

Here is a closer look at some of the interesting facts of this report. While individuals still account for the largest portion of the donations, there was a large increase from the corporate sector -- 12.2% -- to an estimated $18.15 billion. While this is far from the amounts individuals contribute, it is a sign that the strong gains being made in the corporate sector, especially in pre-tax profits, are being translated into higher donations to the charitable sector as a whole. However, even with this large increase, corporate giving represents only 6% of the total contributions made in 2012 and this includes an estimated $131 million made to relief efforts in the aftermath of Hurricane Sandy.

2012, following trends from 2011, continues to show encouraging signs of a recovery in the nonprofit sector. As shared last year, this steady increase in giving is definitely good news but the recovery has been slow with some experts saying the slowest recovery in the last 40 years following a recession. Some may ask, with so many Americans still struggling with the recovery, how could there be an increase in the charitable donations? Some reading this will question how they can make a difference, often mistakenly thinking that the ultra-wealthy are the only ones able to make gifts to charity. I would counter by sharing that past surveys usually indicate that half of the donations from individuals come from people with household incomes under $100,000. I expect this trend to continue. Remember, Americans, even in tough times, continue to give - neighbors still help neighbors; friends and family members still look out for each other, all believing they can and should be Making a Difference®.

For Americans wanting to make a difference there are plenty of choices. Right now more than 1.5 million nonprofit organizations exist in the US and most are trying to change things for the better nationally as well as internationally. And as the IRS receives an average of 100 applications a day from for new nonprofits to be formed; hence, the choices of where to make your donation are endless. To narrow down the options, I recommend looking at the sectors in which you would like to make a difference. See how they did last year; perhaps you will want to choose a sector that did well or one that needs increased support.

Remember, individuals -- just like you -- have an opportunity to affect what gets done and how.

And YOU are able to make the change happen with the issues and causes you care most about by making a donation of $25 or $50, $100, $500, $1,000 or much more.

So in 2012, here is how American giving sorted out...

  • Individuals represented, as noted above, 73% of total giving or228.93 billion
  • Bequests were at 7% or23.41 billion
  • Corporate giving (corporations and corporate foundations) had the largest increase as shared earlier in this blog at 12.2% or18.15 billion
  • Foundation donations were up by 4.4% to an estimated45.74 billion

... and where that money is going, with the subsectors that saw increases:

  • Education again saw increases for the second year totaling 7% or41.33 billion; this sector still ranks far behind religion, which while flat (meaning no increase or decrease in comparison to 2011) received donations of101.54 billion (another sector that was flat was International Affairs after seeing a 6% increase last year)
  • Human Services was up again by 3.8% or40.40 billion; again this includes223 million in support giving to organizations working on Hurricane Sandy relief and recovery efforts
  • Health donations also saw an increase for the second year; the increase was 4.9% or28.12 billion
  • Public-Society benefit support (such as the United Way, Combined Federal Campaign and other groups that redistribute donations) was up 5.4% or21.63 billion; this sector also received54 million donated to nonprofit organizations assisting people affected by Hurricane Sandy.
  • Support of Arts, Culture and Humanities was up by 7.8% with online giving being a strong component of the increase
  • Giving to Environmental and Animal organizations rose by 6.8% or8.3 billion

These two subsectors saw decreases in donations:

  • Giving to Foundations decreased by 4.6%, but adjusted for inflation that number increases to 6.5%
  • Giving to Individuals also decreased for a second year by 6.8%; as an FYI the majority of these donations are in-kind gifts of medications to patients made through the Patient Assistance Program of pharmaceutical companies' operating foundations

So how do you fit in? How can you participate? How do you work to make a difference?

Here are five (5) tips you might want to consider for making your charitable donations this year while ensuring you will be Making A Difference (M.A.D.):

  • Ponder the things in your world you care about. What are your deepest interests? Then develop a plan to support organizations that works for change in those areas - locally or regionally or nationally or even internationally.
  • Consider the needs of your community, and which nonprofit organizations are handling them; you can find this out by looking online, reading the newspaper, watching a newscast or asking your neighbors, family members or friends.
  • Add charitable donations to your annual budget, so that your support can grow without straining your other needs; you can even set up a donation plan so your gift happens automatically on a monthly or quarterly basis via your bank debit card or credit card.
  • Teach your children the habit of philanthropy by putting aside a part of their allowance or money they make for making donations; research with them where it can go at the end of the year (and if you match this gift it can go twice as far)!
  • Learn about estate planning so you can make a difference far into the future; in fact, you'll find there are planned gifts that pay YOU on a regular basis (look into "charitable gift annuities" to learn more).

Even though 2012 is showing an increase in giving again, the need continues to be great. Some experts predict it could take up to seven (7) years for charitable donations to return to pre-recession giving numbers. It's important to remember that all of us working will ensure those in need will have access to the services and programs. So take a look at where you want to Make a Difference®; there are lots of ways to get there. Just consider, are you M.A.D. today?

To learn more about the study on 2012 giving, please visit: www.givingusareports.org