Much was made of the approximately $2 billion that Americans gave to charities responding to the 9/11 terrorist attacks, and we are nearing the $1 billion mark for gifts to relief following the tsunamis in southeast Asia last December.
Both of those figures seem like huge, generous outpourings to people in need after their lives have been turned upside down, and they are. According to Giving USA’s respected annual figures, the larger $2 billion figure represented only an average month of charitable giving in the United States to all charitable causes in 2003.
The vast majority – 74.5 percent – of the $240 billion we Americans gave to tax-deductible charities in 2003 came from individuals. Foundations were responsible for 11 percent, bequests produced 9 percent and corporations gave $13.46 billion or 5.6 percent of the total. These figures will probably come as a surprise to most people. To judge by the behavior of many in the nonprofit sector who spend a lot of energy seeking grants from foundations or donations from businesses, one has to wonder how much these percentages are given their due on a daily basis.
$240 billion to charity every year is an enormous amount of money, yes? Well, yes and no. It hovers just under 2 percent of our gross income and has not changed much at all over the years, even when the markets were producing much more investment income as they did before 9/11. This is an interesting figure, considering the fact that tithing (giving 10 percent of one’s income) has a strong foothold at least in the teachings of some religions.
Who is to say what the proper amount of annual giving to charity should be, given that it is such a personal thing that does not seem to change considerably from year to year in response to changes in the economy and society in general?
Calculate 2 percent of your own income and see how you stack up against the national average. Are you happy with that figure? My guess is that you will be surprised by it, regardless of whether it is above or below the national average. By the way, the figure you should use is your gross income, not that less desirable number on your regular paycheck.
So where was that $240 billion directed in 2003? Giving USA assigns the largest amount to religion at $86 billion, or 35.9 percent of the total. The next highest was education at only 13 percent or $31.2 billion. All the other categories were less than 10 percent of the total in the following descending order: unallocated, foundations, health, human services, arts and culture, public-society benefit, environment/animals and international affairs. These are aggregate national figures, but they provide some interesting insights into what we deem important. In future columns you will likely see that the figures for Whatcom County have a much higher percentage of donations to environmental and arts and cultural organizations.
Since none of us lives our life in the aggregate, you might be wondering what charitable giving looks like for individuals and households on the national level. Such information is not easy to come by, and it always has quite a time lag. One reputable group that has looked at charitable giving from time to time is Independent Sector, a coalition of 700 philanthropic organizations and corporate giving programs that looks at national trends.
Its 2001 report, Giving and Volunteering in the United States, while not all that current, provides some useful information in understanding how charitable giving plays out. One thing we know is that over 80 percent of U.S. households make charitable contributions each year, with an average household contribution of $1,620 in 2000. In those households in which volunteering is a part of their philanthropy as well, that figure rose to $2,295.
This connection between volunteering and increased charitable giving has another interesting dimension, which is that early involvement as a youth volunteer is a strong predictor of charitable giving as an adult.
Independent Sector’s study found that 60 percent of contributing households had volunteered in their youth, while only 36 percent of the non-contributing households had volunteered. Given consistent research results on the impact of youth involvement in the larger community, it would seem advisable to pay much more attention in our schools, homes and religious institutions to the necessity of giving back to our communities. Certainly we can encourage our young people to become involved in ways that we know will result in their becoming caring, involved adults who are connected to their larger communities.
Finally, it should come as no surprise with the amount of charitable dollars going to religion that those with strong connections to religious organizations give over twice as much annually as those who do not regularly attend religious services.
So, what are we to conclude from this bird’s-eye view of American charitable giving? Probably many things could be listed, but the big take-away here is that we are a generous people who understand the need to supplement voluntarily the resources government provides to ensure the well-being of our communities.
Our generosity reflects our values, community needs and our perceptions of how much we think we can afford to donate to the common good or to individuals and families in need. Many questions remain to be answered, and all the answers are increasingly complex. There is clearly more need out there than even our current $240 billion giving level can begin to address. Next month we will suggest how an individual, family or business can intelligently choose where to give money, goods or services among so many worthwhile choices.
— Don Drake is President of Whatcom Community Foundation, an independent nonprofit public foundation founded in 1996 with a dual mission of enhancing private charitable giving and building community in Whatcom County.