Charitable Donations Rebound from Great Recessions, but will Philadelphia Feel the Effect?
Robert Evans, a member of the Giving USA Editorial Review Board, breaks down just a few of the results from the 2014 Report on Philanthropy in 2013. Bob shares both the good and the bad and calls attention to what it means for Philadelphia and other major metropolitan areas.
Also seen in the Philadelphia Inquirer.
Every year at this time, those of us immersed in the fundraising world reflect on the “philanthropy scorecard” from the previous year. This year’s reckoning commenced with the publication today of the Giving USA annual survey, the philanthropic “bible” that has cataloged the ups and downs of giving for more than 50 years. Our city’s history has been filled with examples of citizens taking it upon themselves to be charitable by example, create new institutions and tackle complex social problems. The newest Giving USA 2013 survey shows some real changes taking place in the world of charitable giving and serves as a true call to action for our community’s nonprofits and donors alike.
The Chicago-based Giving Institute and its research partner, the Lilly Family School of Philanthropy at Indiana University, publish Giving USA; it is a national study and doesn’t break out data by region. Still, there is much that we can infer about the health of our region’s nonprofit organizations.
Philanthropy is a lagging indicator of the nation’s overall economic health. Now, more than four years after the Great Recession, charitable giving finally appears to have rebounded. According to Giving USA, last year Americans gave $335.17 billion, a 4.4 percent increase over 2012, to more than 1.1 million nonprofits and at least 300,000 houses of worship. At this pace, Americans will soon reach or surpass the 2007 high-water mark for giving.
From this study, Philadelphians can find much to cheer about.
Higher education continues as the powerhouse of the philanthropic world. And locally, some of the region’s largest universities are raising money at astounding rates. In 2013, the University of Pennsylvania, our largest private employer, completed its staggering $4.3 billion campaign. Nationally, educational institutions (including public and charter schools and educational organizations of all types and sizes) received 16 percent of all 2013 donations. That $52 billion figure represented a 9 percent increase from 2012. Expect our region’s universities to continue this accelerated pace of fundraising and building, thereby providing a vital economic boom for our area.
This newspaper has written in great depth about the arts building boom, the revitalization of parts of the city. The paper has also raised questions about whether the Philadelphia philanthropic community can sustain such growth. According to Giving USA, donations to the arts nationally grew by 7.8 percent in 2013, accounting for $16.6 billion and 5 percent of all donations. Does that mean that the Philadelphia Orchestra will fundraise its way out of bankruptcy or the Please Touch Museum will be able to repay its $60 million debt with bond holders? Not necessarily. But the fact that arts giving is on the rise is encouraging for the city’s many cultural organizations. It also offers further proof that we have moved beyond the recession.
Now here are a few distressing observations.
What’s encouraging for arts organizations is a bit disheartening for the city’s human service providers. In too many pockets of our city, residents go to bed hungry and confront unemployment, underemployment, low wages and lack of access to a solid education. While the needs are staggering, the study reports that giving to human services grew only 2.2 percent, essentially remaining flat with 2 percent inflation. Clearly, this is not encouraging for the city’s many human service providers. Human service nonprofits must work twice as hard, and make truly compelling cases to raise needed dollars.
Other charitable mainstays are also struggling. According to the study, giving to religious organizations held flat in 2013, dropping .02 percent from 2012 and totaling $105.53 billion – 31 percent of all donations. Since the end of the Great Recession, overall giving has grown 12.3 percent while giving to religion has declined 2.4 percent.
Philadelphia is not New York or Los Angeles. Is there enough wealth concentration here to support our many worthy nonprofits? While we have our share of mega-donors, Philadelphia’s access to stratospheric gifts is limited by the fact that our region can claim just one member of the illustrious Forbes 400 of America’s wealthiest: entrepreneur Michael G. Rubin. (Several others on the list do have strong ties to the region.) And the richest of the rich could and should be doing more. In 2007, individuals on the Forbes 400 accounted for 15 percent of all charitable contributions and had a total net worth of $1.5 trillion. In 2013, the earnings of the 400 wealthiest individuals had climbed to $2 trillion, but their contributions only accounted for 12 percent of all giving.
As a whole, Giving USA paints a picture of a stronger, recovering philanthropic sector. But nonprofits – especially those in struggling sectors – must recalibrate their messages, and use the most contemporary and effective means of message delivery, to inspire donors. And for all of us, whether we can part with $18 or $18 million we can and must commit to making giving a higher priority. Let us all pledge to giving our share and giving our money and our time to make the world a more livable, just and charitable place.
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