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Charitable Giving and the Economy

Charitable Giving and the Economy. Una O. Osili, Ph.D. Director of Research The Center on Philanthropy March 22, 2010 AGB’s National Conference on Trusteeship. www.agb.org. Resources.

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Charitable Giving and the Economy

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  1. Charitable Giving and the Economy Una O. Osili, Ph.D. Director of Research The Center on Philanthropy March 22, 2010 AGB’s National Conference on Trusteeship www.agb.org

  2. Resources Giving USA 2009, a publication of Giving USA Foundation, researched and written at the Center on Philanthropy Giving USA Spotlight on giving during recessions and economic slowdown, released September 2008 and 2009 (www.givingusa.org) IRS records for charitable giving Standard & Poor’s 500 stock index Economic indicators from the U.S. Bureau of Economic Analysis Prior editions of Giving USA Philanthropy Giving Index 2008 and 2009 All analysis by the Center on Philanthropy at Indiana University

  3. Total giving, 1968–2008 $ in billions Recessions in dark gray: 1969–70; 1973–75; 1980; 1981–82; 1990–91; 2001; 2007–2008

  4. Who Gives: Sources? • Americans gave $307.65 billion in philanthropy in 2008.(Giving USA 2009) • With average growth, Americans are expected to give $4 trillion in philanthropy over the next 10 years. (Giving USA 2009) • 65% of American households give and 30% of Americans volunteer. (Center on Philanthropy Panel Study) Corporations$14.55% Foundations$41.21 13% Individuals$229.28 75% Bequests$22.66 7% * Dollars in billons Source: Giving USA Foundation™/ Giving USA 2009

  5. For What Uses? Environmentand Animals$6.582% InternationalAffairs$13.304% Grants toIndividuals*$3.71 1% • Religious/Faith-Based($106.89 billion) 35% • Education($40.94 billion) 13% • Human Services($25.88 billion) 9% • Health($21.64 billion) 7% • Public-Society Benefit($23.88 billion) 8% Arts, Culture, and Humanities$12.794% Gifts toFoundations$32.65 11% Unallocatedgiving $19.396% Public-Society Benefit$23.888% Health $21.647% Religion $106.89 35% Education$40.94 13% HumanServices $25.88 9% *Foundation grants awarded to individuals Source: Giving USA 2009

  6. What has happened to date in the 2008 recession? • Giving USA 2009 estimate for giving in 2008 was $307.65 billion -a decline of 2% from the previous year (-5.7% adjusted for inflation). • One year decline for 2008 is close to one year decline for 1974. BUT • Cumulative change to date in this recession for major economic indicators are more severe than the 1973-1974 recession.

  7. Changes in giving by source inflation-adjusted $ Source: Giving USA Foundation TM/Giving USA 2009

  8. Changes in giving by recipient organization inflation-adjusted $ Source: Giving USA Foundation TM/Giving USA 2009 • The highest increases 2007-2008: • Religion +1.6% • Public-society benefit +1.5% • The biggest decreases 2007-2008: • Human services -15.9% • Health -10.0% • Arts, culture & humanities - 9.9%

  9. The Context – Key Economic Indicators

  10. Itemized individual giving and the Dow, 1971-1983

  11. Different impacts now on giving: Dow and Income • From 1930 to 1963, • 10 point increase in the Dow Jones Industrials Average (DJIA) was associated with a very small increase (approximately $1.85 million) in giving nationally • $1 billion increase in personal income nationally was associated with an $11.6 million increase in giving • From 1964 to 2006, • 10 point increase in the DJIA was associated with $16 million more in giving nationally • $1 billion increase in personal income was associated with $15 million more in charitable giving

  12. Percentage of surveyed charities reporting that gift receipts were up, down, or not changed compared with the prior year, per GuideStar.org (2008)

  13. PGI: Main Indexes Over Time

  14. PGI: Current Impact of the U.S. Economy on Fundraising

  15. Corporate Social Responsibility Current trends in corporate social responsibility: • Corporations are focused on aligning philanthropy with business goals and core competencies • Want to “brand” their philanthropic practices • Interested in establishing partnerships with the nonprofits they work with, and taking a more active role in decisions and activities. Impact of the economy on companies’ philanthropy $s: • Remained constant: <50% of companies surveyed • Decreased: 25% of companies surveyed • Increased: 25% of companies surveyed

  16. What can we expect? • Three to four years for individual giving to recover to pre-recession levels once recession over. • Foundations: Much longer – following Foundation Center results – for foundation giving to recover. Minimum of 3 years because of asset averaging over 20 quarters at many large foundations. • Bequests more or less follow stock market, but typically with a two-year lag because large estates take time to settle. • Corporate giving is changing– or more accurately, shifting to other forms: products, services, volunteer linkages, co-branding, etc.

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