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Sunday, 06 August 2017 15:58

Despite uncertainty of 2016, philanthropy posts modest annual gains

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Philanthropic giving in a presidential election year typically remains stagnant.

But similar to last year’s election, giving also bucked convention, posting a 2.7-percent increase courtesy of donations from individuals, estates, foundations and corporations across the United States.

The increase is reflected in an estimated $390.05 billion given to charitable organizations in the U.S. in 2016, according to the annual Giving USA report on philanthropy. Of this total, individual giving accounted for 72 percent, or $281.86 billion.

“The big ‘aha’ in this report is that even with all of the uncertainty of 2016 and the election, giving remained strong and went up,” said Rob Collier, president and CEO of the Council of Michigan Foundations, based in Grand Haven.

Grand Rapids Community Foundation President Diana Sieger said she is not surprised that individual giving represented such a large percentage of total giving.

“It really is people like you and me,” Sieger said. “It’s not necessarily the people who are earning the most money who are really strong contributors. This has been the case for quite some time. It’s not investments by foundations or corporations. It’s appealing to the generosity of individuals. When organizations appeal to individuals, you’ll see those numbers go up.”

However, a stronger economy and a bullish stock market also served as factors to boost giving last year.

“It really depends on how hopeful people might be that economically they’re going to be OK so they have discretionary dollars that they are willing to use to help their fellow human beings,” Sieger said.

The opportunity to take advantage of charitable tax deductions also may be fueling the giving uptick, according to Collier.

“This is the 100th anniversary of the charitable tax deduction and 30 percent of Americans itemize and they are actually responsible for 80 percent of that $280 billion figure,” Collier said.

Aggie Sweeney, volunteer chair of the Giving USA Foundation Board and senior counsel with the Seattle-based Collin Group, said she is gratified by the report’s finding that indicate Americans continue to be very generous and giving. She said this sentiment is reflected on many levels including by the major sectors receiving philanthropic dollars.

The Giving USA report breaks down the total giving into nine categories of recipient organizations: religion; education; human services; giving to foundations; health; public-society benefit; arts, culture and humanities; international affairs; and environment and animals. Giving in each of the nine areas grew, making 2016 just the sixth time in the past 40 years that all categories grew at the same time.

Giving to religious recipient organizations represented 32 percent of total giving, or $122.94 billion, the report said.

Sieger said the religion category encompasses areas such as colleges and universities with religious affiliations, in addition to churches. Often as people get older, their giving patterns change and their focus shifts to supporting their alma mater or areas of a more spiritual nature such as churches or religious organizations, she said.

Collier said religion has always been at the top of the list for giving nationally, but its intensity varies from region to region.

“There are people who are worried about a drop in traditional religious attendance,” Collier said. “I think we’re seeing a downsizing in the number of churches.”

Giving to religious recipient organizations was followed by donations to education, with human services taking the number three spot out of the nine categories. Education giving represented $59.77 billion or 15 percent of total giving.

“Over the past five years, we’ve seen significant increases in giving to most sectors and one sector where we’ve seen significant increases is giving for education with most of that being given for higher education,” Sweeney said, noting that philanthropy helps offset a loss of funding from governmental sources.

“Many public universities are relying more on private support than they have in the past,” she said. “Many private institutions are relying on private endowments.”

The Giving USA research, conducted by Indiana University’s Lilly Family School of Philanthropy, also found the amount of funding going to foundations and/or donor-advised funds and endowments has continued to increase.

“It’s important to keep in mind that while giving vehicles have changed, there’s been a real emergence in giving to donor-advised funds, which gives donors the ability to exercise their choices and demonstrate their priorities through their philanthropy,” Sweeney said. “This makes a difference in addressing needs in local communities and even setting direction.”

People’s continued willingness to give is due in part to nonprofits communicating smarter messaging about their needs and those of the communities they serve, as well as offering a variety of convenient ways to give, Collier said.

“I think that online giving is certainly playing a significant role for individuals to give, particularly Giving Tuesday,” Collier said. “There’s also an increase in the number of nonprofits that have monthly contribution plans so that donors can give each month instead of all at once at the end of the year.”

Both Collier and Sieger said their experience shows the philanthropy snapshot in Michigan aligns with the findings in the national Giving USA report.

According to Sweeney, the report offers an increased understanding of philanthropy and trends and helps individuals — whether they be donors or leaders of nonprofits — to recognize that there really is widespread participation in giving to support a wide range of missions and purposes.

Sieger will use the information to see where the local trends may be headed and determine how to make a better connection with the community.

“Then it would be more of bringing to mind how we can talk to our donors about these trends and what organizations might be good philanthropic fits for them,” Sieger said. “Donors really want to make a connection.”

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