Giving USA 2019

The latest edition of the Giving USA report has arrived. Widely recognized as one of the most reliable and respected reports of the philanthropic landscape, it provides a detailed look into the trends and statistics related to giving in the United States, across all sectors.

Our experts have analyzed the data from this year’s report. Here we present our top five takeaways from the findings that you need to know in order to fundraise successfully this year and beyond.

Giving USA 2019 Cover

The state of US giving

Total charitable giving reached $427.71 billion in 2018, increasing $2.97 billion in current dollars from the 2017 total of $424.74 billion. This is more than the GDP of Ireland and nearly the same GDP as the United Arab Emirates.

If every dollar given charitably in the United States last year was laid end-to-end, it would encircle Earth more than 1,500 times.

However, if we were to consider this figure in inflation-adjusted dollars, total giving decreased $7.4 billion to $427.71 billion from an all-time high of $435.11 billion (again, adjusted for inflation).

After four years of solid growth, including a record-breaking 2017, these lackluster results may be what economists consider a reversion to mean or course correction. For example, those sectors that saw the largest growth in 2017 – human services, education, public-society benefit, and foundations – also saw the largest decline in 2018.

That said, there are straggling trends that warrant both focused attention and decisive action. And there are areas of optimistic growth that we can absorb and internalize to influence efforts, no matter the sector or donor we serve.

For more analysis on the state of U.S. philanthropy, download our report "How America Gives." DOWNLOAD NOW
Takeaway #1: Economy & Policy

Both economic conditions and the policy environment influenced giving – but some aspects had more profound impact than others.

Many were eager to learn the impact of the Tax Cuts and Jobs Act, which officially began in 2018. Experts anticipated a direct cause and effect; for example, an increase in the standard tax deduction would reduce the incentive to give, or the increase in the maximum charitable deduction to 60% of adjusted gross income would incentivize high net worth individuals to give. This tidy narrative does not necessarily paint a complete portrait.

Takeaway #1: Economy & Policy

Graham-Pelton’s experience suggests that policy in sum does not influence donor generosity, and polling supports this. Results from a Fidelity Charitable study demonstrate that four out of five donors (82%) planned to maintain or increase their giving in 2018 despite tax code changes. This includes those 63% who planned to give the same amount and 19% who planned to increase their giving. This solid commitment affirms what we already know about donor motivations: that giving back or making a difference are the primary drivers of charitable giving.

But like much of philanthropy, it’s not that simple. Donors, after all, are human. And otherwise rational humans can make emotional decisions. Reuters named 2018 “the year volatility came home to roost,” citing trade-related tensions between the United States and China, weakness in the tech sector, concerns about slowing global growth and higher interest rates – all keeping “investors on their toes.”

The most volatile period in 2018 also aligned, unfavorably, with the 2018 giving season, with stocks plunging from mid-October to what CNBC called “a violent December,” wherein the Dow and S&P recorded their worst December performance since 1931.

Giving USA has found a statistically significant correlation between changes in total giving and changes in the stock market. Considering that nearly one-third of annual giving occurs in December and 12% of all giving happens in the last three days of the year, 2018 is an example of that research come to life.

ACTION

Talk to your supporters about how the economic climate affects them, but don’t use policy as an excuse to slow down your asking. Your goal will always remain: to give generous people a reason to give.

Takeaway #2: Sectors & Subsectors

There is a subtle shift in the causes donors support.

The causes that donors support and the way they consider and transmit their gifts is shifting to reflect social norms and emerging interests. Enterprising nonprofit sectors are seeing attention and enthusiasm rise.

Takeaway #2: Sectors & Subsectors

This year, giving grew for only two subsectors: International Affairs and Environment and Animal Organizations.

Giving to International Affairs grew by 7% in inflation-adjusted dollars donated, and at $22.9 billion – nearly the GDP of Ireland – it now comprises 5% in overall giving. This was the most dramatic growth in dollars raised across all the sectors measured.

By comparison, the two years prior saw decreases in international giving, likely due to the increase in domestic crises and natural disasters that took place during that timespan. Despite annual dramatic fluctuations since this sector was first measured in 1987, giving to International Affairs in sum has seen a steady rise, particularly since the late 90s.

Giving toward the Environment and Animals can be viewed similarly, though with slightly less enthusiasm, having grown only 1.2% in inflation-adjusted dollars. One point to celebrate: at $12.7 billion raised in inflation-adjusted dollars, this is the highest amount ever given to the subsector. Put it this way: The American Society for the Prevention of Cruelty to Animals estimates that the total first-year cost of owning a dog is $1,270. Conjuring quite the image, this means that 2018 giving toward this subsector could pay for the first-year care of 10 million puppies.

We can’t help but draw a connection to, well, interconnectivity. When Pew Research Center began systematically tracking the internet usage of Americans in early 2000, about half of all adults were already online. Today, roughly nine out of 10 American adults use the internet. As Senior Vice President Jennifer Harris said, “Because of technology, the world’s suffering is closer to home.” As a result, global issues – international affairs, the environment, and ecology – are invested in more than ever.

ACTION

Ask yourself, “in what ways can we bring global issues closer to our donor’s front door? In what ways does our mission have a ripple effect across humanity and worldwide?” Build a strong case that connects your donors to the bigger picture.

Takeaway #3: Donor Loyalty

This is a call for stalwart institutions to energize their efforts.

Although both the education and religion subsectors have built-in donor pools, that no longer guarantees a culture of philanthropic loyalty among their constituents.

Takeaway #3: Donor Loyalty

Both giving to religion and giving to education decreased by nearly 4% in inflation-adjustment dollars in 2018. Markedly, giving to religion has dipped below 30% of overall giving for the first time, and giving to education has seen tepid aggregate growth.

When Giving USA research was first conducted, more than half of every dollar given to charity was given to the religion subsector: congregations, missions, religious media, and other related organizations. With a current share of 29%, a simplistic view would be that donor enthusiasm is waning in this sector.

Our experience demonstrates that this is not necessarily the case. Although fewer Americans consider themselves religious than ever before and there is increased competition for philanthropic dollars (giving to international affairs, human services, health, and environment/animal organizations have seen the highest rates of overall growth since 2004), those who are religious are committed and generous. According to the Giving USA Special Report on Giving to Religion, last published in 2017, “having any form of religious affiliation increases an individuals’ average annual charitable contributions from $695 to $1,590.”

Religious Americans understand their philanthropy yields goodwill to the human race. Yet it is the role of the fundraising industry to help them understand the ways they can rise to the occasion, especially during this fraught time for many denominations. A range of strategic investments in professionalization and resourcing must be made within the religion subsector – from elevating mid-level supporters to major gift donors, to making the case for recurring and automated online giving. After all, your supporters are noticing that this is commonplace in other sectors.

Pay attention to shifting donor interests even within the subsector: private foundations are increasingly directing their support to programs and operations in the education subsector instead of to endowments and new buildings, and are more likely to fund research and programming rather than invest in “long-term sustainability.”

ACTION

Forgo the traditional ladder approach and ask qualified, targeted prospects in the ways other sectors are asking them – think boldly! One way to pursue this route is to adopt a “co-create” approach with prospective donors: collaborate on big initiatives that move your institution forward and meet the prospects’ philanthropic priorities beyond the church pew or school classroom.

Takeaway #4: The Middle Class

America is said to have a disappearing middle class, but this is not a time to neglect their generosity.

On the contrary, a lack of investment in introductory and mid-level giving may mean precipitous drops down the road.

Takeaway #4: The Middle Class

Giving by individuals decreased from 70% of overall giving in 2017 to 68% in 2018. This is the first year giving by individuals has fallen below 70% overall giving since at least 1954.

Consider the bigger picture and you will note that this is part of an ongoing trend. In fact, giving by individuals has declined considerably as a percentage of inflation-adjusted total giving, from 83% during the five-year period beginning in 1979 to 70% during the five-year period beginning in 2014. Bequests have stayed relatively flat at 7-9% since 1979.

The Chronicle of Philanthropy and Graham-Pelton special report, “How America Gives,” shares evidence that fewer and fewer Americans are giving to charity, according to recent Chronicle data analysis. In it, editor Stacy Palmer writes, “rich people are making up the difference, keeping charity coffers full – especially as the middle class pulls back.”

As some may have feared, 2018 did not see a cataclysmic drop in giving due to the implementation of the Tax Cuts and Jobs Act. However, considering the bigger picture yet again, itemized giving by low- and moderate-income earners – those making less than $100,000 annually – has been declining for more than 10 years, even before the implementation of the Act.

Meanwhile, total dollars contributed by upper-income earners has soared, but not due to itemized giving. Average itemized giving has not increased, but the number of upper-income earners have more than doubled since 2000, to 19 million. As a result, those earning more than $100,000 now account for 75% of all itemized giving. Donations from households earning $200,000 or more now total 52% of all itemized contributions. In the early 2000s, that number was consistently in the 30% range.

As tempting as it may be to court major donors – and we will always promote the benefits of and return on a strong major gift pipeline and portfolio – don’t allow your fundraising work to be divided into the haves and have-nots. Institutions must also invest in sustaining and growing lower- and mid-level giving in order to build a culture of philanthropy and a pipeline of future major donors.

ACTION

Fundraising technologies have boomed, allowing nonprofits to engage in “mass personalization,” getting to know their donors and articulating impact in a more meaningful way than ever. Segment your donor groups who have high future potential and consider ways you can highlight their giving impact (taking a break from the usual high-profile donor stories) and personalize your stewardship approaches with them.

Takeaway #5: The Future of Foundations

A strong foundation, indeed: Both giving by foundations and giving to foundations have seen collective gains.

Giving by foundations has grown substantially over the last 40 years, at 291%. The last 10 years has seen a steady growth in foundation assets. And the best news? Reports show commensurate growth in those foundations’ grantmaking.

Takeaway #5: The Future of Foundations

At Graham-Pelton, we know that all sources of giving are, at their core, powered by the individual – whether an independent donor, a corporate social responsibility decision-maker, or a member of a family foundation. And that is why we are particularly interested in those donors’ relationships with funding vehicles. Consider this: from 1978 to today, dollars raised from foundations has seen a 291% increase in inflation-adjusted terms, while dollars raised from individuals has seen a 169% increase.

As foundation assets rise, so does their giving. And in the few years in which their assets fell, their grantmaking still rose! And, interestingly, foundations with smaller endowments reported giving a significantly higher percentage of their assets than larger foundations (at a distribution rate of 13.2% for foundations with an endowment size of less than $1 million and 6.9% for foundations with endowments greater than $10 million). Note that, by law, foundations are required to pay out at least 5% of the average market value of their net investment assets each year.

In the latest Giving USA report, foundations saw the highest increase in their share of contributions and now comprise 18% (nearly $76 billion in inflation-adjusted dollars) of all funding sources, whereas the other sources – individuals, bequests, and corporations – dropped or remained flat. By comparison, in 1978, foundations comprised just 6% ($8.35 billion in inflation-adjusted dollars). In fact, giving from foundations has seen an eight-year streak of respectable, reliable growth.

Giving by foundations would be an incomplete analysis if we didn’t also consider giving to foundations. We encourage you to not be alarmed by the 2018 Giving USA findings that demonstrate that giving to foundations decreased 9.1% in inflation-adjusted dollars from 2017 to 2018. Why? Because 2017, and many years prior, were banner ones for support of foundations. For example, 2017 saw a 33% growth in giving to foundations. The decrease seen this year is indeed a “reversion to the mean.”

ACTION

Although very few foundations give mega-gifts to nonprofits who are not already receiving very large gifts from individual and corporate donors, it does not mean that small- to mid-size nonprofits should avoid putting a foundation fundraising plan in place. At a minimum, explore the ways that your mission could match the priorities of a grantmaking foundation, determine the portion of time required to research and approach foundations, and assign a corporate and foundations relationship manager. Learning how foundations make their decisions is a critical component of increasing your chances for submitting successful grant proposals.

What Our Experts Are Saying

Elizabeth Zeigler
President & CEO

“Religion has long held the top proportion of total giving, with education a distant second, since Giving USA began measuring this data. But the latest report reveals that giving to religion has dipped below 30% for the first time ever, and education has witnessed anemic growth. These stalwarts of the community must work harder than ever to connect with their own, reinforcing their relevance and wide reach while engaging in an increasingly sophisticated level of donor development.”

Andy Wood
Managing Director

“When reviewing Giving USA, Graham-Pelton colleagues in Europe are eager to identify areas that align with or deviate from what we witness among our clients. This year, I was particularly struck by the increase in giving among corporations (at 5.4%) and foundations (at 7.3%). In fact, giving by foundations has made an incredible leap, contributing $25 billion more than they did only 10 years ago.

“When you look at the latest Ross-CASE survey findings, for example, corporations, trusts, and foundations accounted for just 12% of donors but comprise 60% of new pledges and 61% of cash income, and nearly half of participating institutions secured their largest new gift or pledge from a trust or foundation. And according to our research with IDPE, nearly half of schools surveyed apply for funding from trusts and foundations, no matter the maturation of their development programme. This group should not be considered an ATM by not-for-profits because of these findings but should be an area of strategy and focus for all fundraisers.”

Jennifer Harris
Senior Vice President, Association and Social Change Sector

“Technology has created an enlivened globalism and called us to action beyond our traditional boundaries of city, state, or nation. Today, more than ever, people are called to help end the suffering of people everywhere. Because of technology, the world’s suffering is closer to home, and as a result, people are investing in international affairs more than ever. The takeaway for me is this: how do nonprofits personalize and customize the powerful messages that lead us to take immediate actions? How do we continue to spark creative dialogue with audiences to compel action? That’s the trick. To humanize our missions.”

Stuart Sullivan
Senior Vice President

“Nonprofits now actually need to reinvest in introductory and mid-level giving programs. The combination of tax reform and the decline in involvement of Americans in philanthropy at lower levels has alarming connotations in both the short and long term. Middle class donors who do not develop a pattern of giving may never include their favorite charities in their estate plans as a result. This group of donors has for generations demonstrated its devotion to charities. They need to be embraced and encouraged to give now more so than ever.”

Pat House
Executive Vice President, Client and Consultant Development

“We are seeing that ‘giving back’ is giving way to ‘paying forward.’ One’s giving habits and resulting organizational loyalties are easily broken if one’s contributions are recognized too slowly, too impersonally, with too much ‘fluff.’ The increasing popularity of donor-advised funds as holding cells of philanthropy tells us that organizations need to build more compelling cases to motivate donors to provide support, and they need to do it now. Americans have more reasons to give – and even more expectations around results from their giving.”

More from Graham-Pelton

Looking for more insights and analysis? A recent report from Graham-Pelton and the Chronicle of Philanthropy highlights the changing giving habits of Americans and how some nonprofits are adjusting their strategies in the face of declining middle-class donors.

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How America Gives

Graham-Pelton is a fundraising and management consulting firm for leading nonprofits worldwide.
Our mission is clear: elevate philanthropy so nonprofits can flourish.

About Giving USA

Each year, the Indiana University Lilly Family School of Philanthropy, Giving USA Foundation, The Giving Institute, and many others work together to produce Giving USA: The Annual Report on Philanthropy. It is the most comprehensive and accurate benchmark for charitable giving in the United States.

The data from Giving USA covers many facets of the philanthropic community. It tells us where, how, and to whom individuals and organizations are giving. Since 2000, the Giving USA Foundation has partnered with the Indiana University Lilly Family School of Philanthropy. The school conducts the research, and it spans:

  • 53 million households across the United States
  • Nearly 16 million corporations claiming charitable deductions
  • More than a million estates
  • About 82,000 foundations

Donations made to all of these entities ultimately go to nearly 1.1 million charities, as well as to an estimated 300,000 religious organizations across America.

About the Giving Institute

The Giving Institute is the parent organization of Giving USA Foundation and consists of member organizations that have embraced and embody the core values of ethics, excellence, and leadership in advancing philanthropy. As a member organization of The Giving Institute, Graham-Pelton embraces the highest ethical standards and maintains a strict code of fair practices.