Economy and Education & Workforce Development and Media & Marketing and Philanthropy

Charitable sector rides on road to recovery: Giving makes big jump for the first time since 2000

June 20, 2005

Americans gave more money to charity last year than ever before, signaling a return to the pre-9/11 philanthropic heyday.

Contributions were up 5 percent, to $248.5 billion-the first significant increase after adjusting for inflation since 2000.

"Things have been kind of flat," said Eugene Tempel, executive director at the Center on Philanthropy at Indiana University. "This ... tells us things are getting a little stronger. This is a good sign."

Researchers at the center compile data each year and write Giving USA, a report published by the Illinois-based Giving USA Foundation. The most recent version, released last week, has received national media attention.

Its findings, while encouraging, aren't earth-shattering. As in past years, individuals make the overwhelming majority of gifts to charity, 75 percent in 2004, and religious organizations get more than any other recipient-36 percent of the total.

Still, there are some interesting nuggets of information:

Gifts from foundations and corporations each were up 7 percent, outpacing the 4-percent growth in individual contributions.

Giving to human-service organizations, meanwhile, was down for the third year in a row after inflation adjustments. Only international affairs organizations suffered a similar decline, while everything from arts to animal welfare saw an increase.

Professionals say Giving USA is a useful benchmark for the charitable sector, offering donors and agencies alike a glimpse at the broad philanthropic landscape.

"It doesn't say everything-there are a lot of dynamics at play," said Ellen Annala, president and CEO of the United Way of Central Indiana. "But it gives us a good indication of what's happening, [information] we can work with when it comes to setting our sights for the coming year. It's helpful."

Even so, Annala wasn't surprised by the report's results, which mirrored her experiences. After a couple of tough fund-raising years, UWCI surpassed its $36.6 million goal for 2004-increasing grants to member agencies as a result.

Although Giving USA doesn't dissect data on a state or regional level, a separate report produced by center researchers suggests philanthropy in Indiana follows national trends.

Indiana Gives 2004 found similar sources and recipients of the $4.9 billion Hoosiers gave to charity in 2003-77 percent came from individual households, and 39 percent went to religious groups.

Some priorities are different, though. For example, giving to human-service organizations was higher in Indiana, making up 15 percent of giving in 2003, compared with 8 percent nationally that year.

Published by the Giving USA Foundation, an educational and research initiative of the American Association of Fundraising Counsel, the annual report has crunched the national numbers since 1964.

The publication has become increasingly important as the sector has grown, said Hank Goldstein, a New York-based fundraising consultant and chairman of the Giving USA Foundation, which pays about $400,000 each year to commission and distribute the book.

"Philanthropy is an important part of society. It's huge," he said, citing the nearly $250 billion in charitable contributions and hundreds of billions in additional revenue not-for-profits collect. "This is a very large segment of the economy."

And the latest Giving USA report offers a reason for optimism, Goldstein said.

"People are doing OK. The market is doing reasonably well. Foundation portfolios are recovering. Corporate profits are up," he said, ticking off the reasons giving increased last year. "It's looking good."

"It seems the shock of 9/11 is over," concurred Brian Payne, president of the Central Indiana Community Foundation, which more than doubled its fund-raising efforts last year, bringing in $47 million. "A lot of people are feeling like we've survived the worst of it."
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