Monday, June 20, 2016

The Power of Individual Donors

Charitable giving continued its upward trend in 2015, as an estimated $373 billion was given to charitable causes.  For the second year in a row, total giving reached record levels, and taking 2014 and 2015 together, charitable giving has increased over 10% (using inflation-adjusted dollars). This increase and the overall size of charitable contributions is further testament to the integral role charities play in our society, a role which continues to grow.

But do individual donors recognize the power of their donations? In 2015, the largest portion of charitable giving came from individuals and totaled $264.58 billion.  Individuals were also responsible for two-thirds of the overall increase in charitable giving from 2014.

How much do we give?
  • Total giving to charitable organizations was $373.25 billion in 2015 (2.1% of GDP). This is an increase of 4.1% in current dollars and 4% in inflation-adjusted dollars from 2014.
  • This is the sixth straight year that giving has increased and the second straight record-setting year, following 2014’s total of $358.38 billion. 
  • Comparing GDP growth and change in charitable giving over 2010-2015, the average increase in giving to charitable causes (3.6%) is greater than the growth of GDP (2%).
Who is giving?
  • As in previous years, the majority of that giving came from individuals. Specifically, individuals gave $264.58 billion, accounting for 71% of all giving and representing a 3.8% increase over 2014 (3.7% when adjusted for inflation).  
  • Giving by bequest was up 2.1% in current dollars (or 1.9% when adjusted for inflation) to $31.76 billion.
  • Foundations gave $58.46 billion which represented an increase of 6.5% (or 6.3% when adjusted for inflation).
  • Corporations donated $18.45 billion for an increase of 3.9% (or 3.8% when adjusted for inflation).
Where do the donations go?
  • International organizations saw the largest increase and the first increase in three years. Giving to International organizations was up by 17.5%, totaling $15.75 billion.  This may be due to an increase in the number of large international organizations, or that giving in this area took longer to recover from the recession.
  • The portion of charitable giving going towards Religion increased for the second year in a row, going up by 2.7% from 2014 to $57.48 billion.
  • Giving to Foundations was the only area where donations decreased, a decrease of 3.8% from 2014, totaling $42.26 billion.
  • Contributions to Education organizations continue to steadily increase, this year by 8.9% to a total of $57.48 billion.
The charitable sector would not be growing the way it is if it were not for individual donors. In 2015, donations from individuals accounted for over two-thirds of all donations. If you add in gifts from bequests and family foundations, which are essentially gifts from individuals, then the category accounted for nearly 80% of all giving in 2015. This percentage shows the power of donations for individuals, rather than from large foundations or corporations, and the importance of charitable giving by individuals to the entire sector. 

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