By Kelli B. Grant
Americans are returning to pre-recession charitable giving habits, according to a new report. That’s not entirely a good thing.
Adjusted for inflation, charitable giving rose an estimated 2.1% last year to $290.89 billion, according to the Giving USA survey released today. That’s notable after the collective 13% drop in 2008 and 2009, yet means nonprofits have roughly six more years of recovery at similar rates to reach pre-recession levels. Donations from individuals increased 1.1%, which Giving USA says is consistent with other years immediately following recessions.
The charities consumers choose are also shifting back toward pre-recession habits, suggests Patrick Rooney, the executive director of The Center on Philanthropy at Indiana University, which co-produced the report. In a statement, he points to the 3.5% and 4.1% increases in giving to education and to arts, culture and humanities — as well as the 1.5% drop in donations to human services like homeless shelters and food banks.
“That’s really bad — and probably the scariest thing from this report,” says Ken Berger, the president and chief executive of rating site Charity Navigator. With unemployment still at a steep 9.1% and concerns of a double-dip recession, the drop poses problems both for consumers in need and the nonprofits providing for them. “These groups are getting called upon to do more, and being given less,” he says.
Part of the shift is likely due to a rebound in giving from high net-worth donors, whose financial situations may have improved more quickly and who were targeted by The Giving Pledge challenge to donate the bulk of their wealth. Many such donors are particularly keen on the arts and education, Berger says.
“For donors, this underscores the importance that if you have less to give, to make sure the contributions you make are being used well,” says Bennett Weiner, the chief operating officer of the Better Business Bureau’s Wise Giving Alliance. (Check out our how-to guide for tips to give effectively.) If you have less cash to give, consider donating time or goods.
PayDirt readers, how have your charitable giving choices changed in recent years?