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Charitable Giving Rises 6 Percent to More than $260 Billion in 2005
Disaster relief tops all records and totals 3 percent of all giving
By George C. Ruotolo, Jr., CFRE
Chairman and Chief Executive Officer
Acting Chair, Giving Institute: Leading Consultants to Non-Profits
 Last
month, The Giving USA Foundation™ published Giving USA 2006,
which details giving trends in 2005. The book was researched and written
by the Center on Philanthropy at Indiana University.
The Foundation’s
mission is to advance the research, education and public understanding
of philanthropy. It was founded in 1985 by the American Association of
Fundraising Counsel, now Giving
Institute: Leading Consultants to Non-Profits. As acting chair of
the Giving Institute, I wanted to share highlights of the findings with
you. As you will see, the results in this year’s edition of Giving
USA show us that Americans are always generous, especially when nature
strikes unexpectedly.
- Americans gave total contributions
of $260.28 billion for 2005, a growth of 6.1 percent (2.7 percent
adjusted for inflation).
- The year 2005 saw
extraordinary philanthropic response to three major natural disasters.
About half of the $15 billion increase in total giving from the
revised estimate of $245.22 billion in 2004 is attributable to
disaster relief giving.
- The other half reflects
donors’ commitments to other causes that matter to them.
- Major natural disasters
in the U.S. and abroad between December 2004 and October 2005 generated
at least $7.37 billion in contributions (2.8 percent of total estimated
giving) in 2005.
- Of the disaster giving,
individuals contributed an estimated $5.83 billion, or 79 percent
of the estimated total in disaster relief contributions for 2005.
- Corporations gave
an estimated $1.38 billion, or 19 percent of the estimated total
of disaster relief gifts. The balance of disaster relief giving,
an estimated $160 million ($0.16 billion) based on records from
the Foundation Center, was paid by foundations in 2005, for 2
percent of the estimated amount for disaster relief.
- Earlier editions
of Giving USA reported the philanthropic response after
the attacks of September 11, 2001, which reached $2.8 billion
according to a December 2004 Foundation Center report. The contributions
in 2005 to aid survivors of U.S. Gulf Coast hurricanes Katrina,
Rita and Wilma quickly surpassed the prior records for disaster
relief giving, topping $5 billion by year’s end. And we
expect contributions for rebuilding will continue, perhaps for
a decade or more.
- In addition to the
counted charitable contributions made for disaster relief, the
recovery and rebuilding efforts engaged people very directly in
ways that are not always tabulated on a national level.
For example, after hurricanes Katrina, Rita, and Wilma, religious
congregations and other groups collected truckloads of goods and
organized and sent teams of volunteers. Schools organized drives
to collect supplies, books and equipment to restore classrooms
in schools in Louisiana, Mississippi or Alabama. Clubs, coworkers
and other groups of people organized temporary or even semi-permanent
homes for survivors of the disasters who relocated. Similar, although
less extensive, direct responses occurred after the U.S. received
news of the December 26, 2004 tsunami and the October 8, 2005
earthquake in Pakistan.
Giving
USA 2006 reports giving from four sources of contributions—individual
(living) donors, bequests by deceased individuals, foundations and corporations.
- Individual giving
is always the largest single source of donations. It rose by
6.4 percent (2.9 percent adjusted for inflation) to an estimated $199.07
billion. It accounts for 76.5 percent of all estimated giving in 2005. Average
charitable giving per household in 2005 is estimated to be 2.2 percent
of average household disposable (after-tax) income, exactly at the 40-year
average.
- Charitable bequests are estimated to have fallen
5.5 percent in 2005, largely due to a steep decline in the number
of deaths in 2004 and an expectation that the number of deaths for
2005 remained low. Estimated charitable bequests of $17.44 billion
are 6.7 percent of total estimated charitable giving for 2005.
- Foundation grantmaking, which is reported by the
Foundation Center, rose 5.6 percent (2.1 percent adjusted for inflation)
to $30 billion. The Foundation Center, which reported this information
in April 2006, said the increase was because of growth in the number
of foundations and because the stock market rose in 2004 and held
steady in 2005. Foundation giving is 11.5 percent of total estimated
charitable giving in 2005.
- Corporate donations grew by an unprecedented 22.5
percent (18.5 percent adjusted for inflation), to reach an estimated
$13.77 billion. At 5.3 percent of the total estimate for charitable
gifts, corporations account for a slightly larger slice of the pie
than the average of 5 percent given by corporations in the past 40
years. I believe this high level of corporate giving is explained
in part by two years of very strong growth in gross domestic product
and by growth in corporate profits before taxes. It also shows companies’
exceptional response to disasters worldwide in 2005.
Even with overall growth in charitable giving, some subsectors grew
more than others. The subsectors for arts, culture and humanities
and for health saw inflation-adjusted giving decline.
To order a copy of Giving
USA 2006, please visit the Giving
USA Foundation website.
 Click
here
for a printer-friendly version of Netlinks
Netlinks
is published by George C. Ruotolo, Jr., CFRE, chairman and chief executive
officer of Ruotolo Associates. The newsletter is written and edited
by Liz Campbell, associate. Reproduction
of Netlinks is permitted only with attribution to Netlinks,
a publication of Ruotolo Associates Inc. To view past issues of Netlinks,
visit the firm's website.
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