Economy and Education & Workforce Development and Philanthropy

Giving lifted by disasters: Donors generous to victims of catastrophies but didn't forget usual causes, IU study finds

June 19, 2006

All told, individuals, corporations and foundations gave $260.3 billion to charity in 2005, 2.7 percent more than the year before even after adjusting for inflation, according to data compiled by researchers at Indiana University's Center on Philanthropy for the annual "Giving USA" report.

The report, set to be released June 19 by the Illinois-based Giving USA Foundation, answers a question that has been lingering for more than a year:

Would the nation's outpouring of support for victims of an Asian tsunami, Pakistani earthquake and two Gulf Coast hurricanes sink other fundraising efforts?

"This data suggests disaster giving did not impact overall giving," said Peter Fissinger, a Giving USA Foundation board member. "In real dollars ... disaster relief provided a boost and [the report] tells us people gave very generously above and beyond what they would have done."

Indeed, the total was impressive-just missing the high mark of $260.5 billion reached in 2000, the end of the dot-com boom. All the additional money, nearly $7.4 billion, went to disaster-relief efforts last year.

Other contributions were flat-down a mere 0.2 percent-but so was the economy, which influences philanthropic activity.

All donations were spread across not-for-profit industry segments, including religious groups, educational institutions and health organizations.

Partly because of the disaster giving, human-service organizations received their own impressive influx last year. After seeing donations decline the previous three years, contributions jumped 28 percent-the largest percentage increase of any sector.

"Disaster relief just called human attention to human service organizations," said Fissinger, a senior vice president of Chicago-based fund-raising consultant Campbell and Co.

But other factors also came into play, he said. For example, groups like the United Way have been investing in major fundraising efforts that are finally paying off.

Officials at United Way of Central Indiana had remained cautiously optimistic throughout the year, hopeful they would hit their campaign goal of $36.5 million despite the disaster giving.

They missed it by a mere $200,000.

"I was surprised we came in so close," said CEO Ellen Annala. "We had heard that companies were afraid of running too aggressive of a campaign after [Hurricane] Katrina. But we didn't see that huge of an effect as a result."

That wasn't the case after the 2001 terrorist attacks. Some in the sector believe the three-year drop in humanservice donations was mostly a correction for the unprecedented philanthropic response to that disaster, Fissinger said.

The national findings were reflected at the American Red Cross of Greater Indianapolis, where annual contributions were in line with what the agency had projected-before the hurricanes hit.

"Donors are pretty sophisticated and well-informed and make a decision that recognizes extraordinary need," said John Lyter, the local agency's CEO.

Donations to the Red Cross earmarked for local use last year hit $1.3 million, a little more than the agency expected. It included money that helped feed and house about 2,000 displaced Gulf Coast residents.

While donations to human-service groups were up, gifts to arts and cultural organizations were down 6.6 percent. It was the only sector that saw a decline last year.

"Donors to these organizations tend to be involved in many organizations ... so there is some plausible suggestion that disaster relief could have impacted arts and culture," Fissinger said. "Or it could have been that certain campaigns simply ended."

Even so, an eight-year, $40.7 million fund-raising effort for the Eiteljorg Museum of American Indians and Western Art in Indianapolis ended last year without a glitch, CEO John Vanausdall said.

"The effect was virtually nil," he said. "We had a strong year for annual contributions."

Because the study does not track donations in individual states, it is difficult to tell how closely local giving followed the national trend.

"It's hard to know definitively if it's happening here," said Patrick Rooney, director of research at the Center on Philanthropy. "But there's no reason to think that this area is particularly different than the rest of the country."
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