We Knew It. Or Did We?

Ellen Remmer
Strategic Philanthropy
Giving USA
Thursday, June 19, 2014

The latest Giving USA numbers, crunched and created by the Lilly Family School of Philanthropy for the Giving USA Foundation, are out showing continued good news.  Giving increased 4.4% to $335.17 billion in 2013 edging closer to the 2007 pre-recession high of $349 billion (inflation-adjusted).  The research team is cautiously optimistic that we will overtake that level in another year or two.

 Our first reaction: we knew it.

These numbers resonated with The Philanthropic Initiative’s experience this year.  Increasingly, the story we’re hearing is “our foundation is preparing to grow from $4 million to $100 million in assets and we need to get ready.”  There’s more money out there and more money being given away.

Giving USA highlighted that the amount of funds donated through “mega gifts” of over $80 million grew three-fold.  Furthermore, the recently revised report from Boston College, “A Golden Age of Philanthropy Still Beckons” indicates the intergenerational transfer of wealth is in motion and barreling down the track – now at an estimated $59 trillion.  Venture capital, private equity firms and high tech entrepreneurs comprise some of this wealth, but it also includes good old fashioned manufacturers and real estate developers who are at a point in life where significance trumps financial return.  They are eager to enjoy the act of giving today, but also to engage their children and define their legacies.  More and more folks are also giving through a variety of structured vehicles including donor advised funds and foundations, often putting substantial amounts in both. 

But, before settling down in smug satisfaction at our ability to prognosticate, we dug a little deeper.  And behind the headlines are some data points which raise some very interesting questions.

For example, one sector that experienced a decline this year was giving to international affairs - down an inflation-adjusted 8%.  This startled us, given the growing interest in a globalism that we see among young donors, corporations, and others through TPI’s Center for Global Philanthropy.  The report suggests some plausible explanations, in particular that corporations are increasingly making direct gifts to international charities, which are not counted in the data.  This rings true, as we know that more and more companies are using on the ground employees to identify and vet local nonprofits.  Yet with corporate giving accounting for only 5% of all donations, it can’t provide the complete answer.    Certainly groups like NGOsource are developing databases to make equivalency determination easier and civil society is growing more professional, transparent and accountable in many regions of the world, but is that the complete answer?  Could the explosion of interest in market-based solutions to international development be even more important?

The continued decline in giving to religion is also provocative, given other Lilly School studies that show that 73% of all giving in America goes to organizations with religious ties.   Is religion actually driving more of our philanthropy?

And we continue to shake our heads at the fact that giving as a percentage of personal disposable income stubbornly persists below the 2% mark when it reached 2.4% in 2000. Why are so many of the growing number of deca-millionaires still standing on the sidelines? What can be done about it?

As always, the report is replete with a tremendous amount of data from highly credible sources as well as a wealth of thoughtful analysis and insights. And as always, it only prompts us to ask even more questions.

Acknowledgement:  Ellen Remmer serves on the Board of Visitors of the Lilly School of Philanthropy, which creates Giving USA

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