Charitable giving in the first half of 2015 was up nearly 8% compared with the same period last year, according to a new Atlas of Giving study, growing from about $222 billion to nearly $239 billion.
Improving employment rates are a big part of the reason for the uptick in giving, the report said, adding that donors are feeling more financially confident. Those who were unemployed are finding jobs, and those who were employed throughout the recession are less worried about layoffs and downsizing. The Atlas of Giving said low inflation was also a factor in the increased giving so far this year.
Gifts from the very wealthy — those donating tens of millions of dollars — are flowing in, according to the survey, totaling more than $4 billion so far in 2015. Such donations accounted for 2 percent of all giving.
The report predicts that charitable giving in 2015 will end up 5.6 percent higher by the end of the calendar year than in 2014.
The Atlas of Giving said its findings are produced by a team of 25 mathematicians using 65 economic algorithms. The organization doesn’t provide specifics on how it compiles its figures.
The full report is available for free on the Atlas of Giving website.
2015 first half U.S. charitable giving has been exceptionally (and unexpectedly) strong – up a total of 7.6% to $238.88 Billion from $222.03 Billion for the same period in 2014. Most of this strong giving performance is attributed to the continually good news of improving employment rates. Individual donors, who account for 74% of all U.S. giving, are finding jobs, less fearful of losing their jobs, and enjoying some splendid economic conditions like low interest rates, low gas prices, and little inflation. This leaves them with more disposable income that can be applied to charitable giving.
Other contributing factors include:
- Strong Foundation grants continue as grant making foundations share the bounty of 6 years of strong stock portfolio gains. (This strong grant trend is expected to continue for 2-3 more years.)
- More record Donor Advised account contributions and grants to charities.
- Increasing adoption of technology that makes the fundraising process more effective and less expensive. Theses include crowd funding, online event support, donor relations management technology, and better donor predictive and analytic tools.
- More nonprofits. New, focused, accountable niche nonprofits are bringing new money into the charitable giving economy.
- Mega gifts are booming – more than $4 Billion so far this year. Led by John Paulson’s $400 million contribution to Harvard, mega gifts are nearly 2% of all giving so far in 2015.
Giving results vary from sector to sector, source to source, and geography. How sectors and individual nonprofits and churches raise money and from whom greatly impact their results.
- Sector giving growth is lead by Environmental Organizations, Human Needs Organizations, Education (especially colleges and universities), and Donor Advised Funds.
- Source giving is interesting. Foundation grants show the strongest growth but account for only 14% of all giving. Individual giving is making the greatest overall impact with 7.3% growth and accounts for 74% of all gifts made nationally.
- Lagging sectors continue to be Churches and Health. Church membership and participation continues to decline, and this is very significant – especially since most of their giving comes from many individual donors. The Atlas of Giving believes that declines in Health giving are a direct result of the implementation of the Affordable Care Act (Obamacare). Many individual donors are under the impression that the federal government is now taking care of all the health needs of the less fortunate, the homeless, and the unemployed and, as a result, have curtailed their support. Additionally, there has been a significant decline in the number of nonprofit hospitals. As a result, donors seem less interested in lending support.
Updated Charitable Giving Forecast is no Bonanza but not the disaster predicted at the first of the year
- The updated charitable giving forecast indicates that 2015 calendar year giving will finish 5.6% higher than 2014 for a total of $482.27 Billion.
- 2015 month to month results should reflect 2014 plus growth, but November and December now look better than they have for some time.
- New forecast indicates that giving growth is slowing.
- 4.3% growth for Q3
- 3.8% growth for the last half of 2015
- 3.6% growth for the next 12 months
*** Keep in mind the Atlas of Giving Charitable Giving Forecast is updated monthly as financial, demographic, and event factors are constantly changing and updates are required. You can keep your finger on the pulse on American Philanthropy by regularly checking our monthly updates.
Practical Advice for Nonprofit Practitioners
- Stay the course…don’t make any drastic strategic or tactical changes at this time.
- Focus as much of your resources as possible in two areas: Gifts from Individual Donors and seeking Foundation and Donor Advised Fund Grants.
- Plan budgets based on 3-4% growth in giving over the next 12 months.
Click here to read the full report!