charitable giving and the economy
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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. - PowerPoint PPT PresentationTRANSCRIPT
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
ResourcesGiving 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 givingStandard & Poor’s 500 stock indexEconomic indicators from the U.S. Bureau of
Economic Analysis Prior editions of Giving USAPhilanthropy Giving Index 2008 and 2009All analysis by the Center on Philanthropy at Indiana University
Total giving, 1968–2008
0
50
100
150
200
250
300
350
1968 1973 1978 1983 1988 1993 1998 2003 2008
$ in billions
Recessions in dark gray: 1969–70; 1973–75; 1980; 1981–82; 1990–91; 2001; 2007–2008
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)
Individuals$229.28
75%
Corporations$14.55% Foundations
$41.21 13%
Bequests$22.66
7%
* Dollars in billonsSource: Giving USA Foundation™ / Giving USA 2009
For What Uses?1. Religious/Faith-Based
($106.89 billion) 35%
2. Education($40.94 billion) 13%
3. Human Services($25.88 billion) 9%
4. Health($21.64 billion) 7%
5. Public-Society Benefit($23.88 billion) 8%
Environmentand Animals
$6.582%
Grants toIndividuals*
$3.71 1%
HumanServices$25.88
9%
InternationalAffairs$13.30
4%Arts, Culture,
and Humanities$12.79
4%Public-Society Benefit$23.88
8%
Unallocatedgiving$19.39
6%
Health $21.64
7%
Gifts toFoundations
$32.65 11%
Religion $106.89
35%Education$40.94 13%
Source: Giving USA 2009
*Foundation grants awarded to individuals
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.
Changes in giving by source inflation-adjusted $
Source: Giving USA Foundation TM/Giving USA 2009
Changes in giving by recipient organization inflation-adjusted $
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%
Source: Giving USA Foundation TM/Giving USA 2009
The Context – Key Economic Indicators
Years of depression
or recession
Highest rate of
unemployment in period
Highest to
lowest DJIA
Personal income
Dow Jones Industrials
Average
GDP Corporate profits
1929-33 37.6%(1933)
-85%(Feb 29: Jul 32)
-24%(29 – 33)
-55% -25% -101%
1973-75 9.0 %(May 75)
-50%(Jan 73; Dec 74)
0.6%(73-75)
-15% -1% -10%
2007- fall 2009
10.2% ( Sept 09)
-53%(Jul-07; Mar-09)
-3.8%(qtr 4 07 to
qtr 2 09)
-39%(from Dec 07 to Jun
09)
-2.2% (qtr 4 07 to qtr 1
09)
-21%(qtr 4 07 to qtr 1
09)
Itemized individual giving and the Dow, 1971-1983
Different impacts now on giving: Dow and IncomeFrom 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
Percentage of surveyed charities reporting that gift receipts were up, down, or not changed compared with the prior year, per
GuideStar.org (2008)
2002 2003 2004 2005 2006 2007 2008
2839
50 49 50 5238
22
22
24 26 27 25
25
4835
23 22 19 1935
3 4 3 3 4 4 2
Don't knowDecreasedStayed about the sameIncreased
Summer
98
Dec-98
Summer
99
Dec-99
Summer
00
Dec-00
Summer
01
Dec-01
Summer
02
Dec-02
Summer
03
Dec-03
Summer
04
Dec-04
Summer
05
Dec-05
Summer
06
Dec-06
Summer
07
Dec-07
Summer
08
Dec-08
Summer
09
Dec-09
0
20
40
60
80
100
Philanthropic Giving Index Present Situation Index Expectations Index
PGI: Main Indexes Over Time
PGI: Current Impact of the U.S. Economy on Fundraising
Average 2003 Average 2004 Average 2005 Average 2006 Average 2007 Average 2008 Average 2009
71.2
36 3628.9
35.3
90.376.5
9.5
21.1 28.2
21.623.5
7.7
10.619.5
42.9 35.949.6
43.5
2.2
13
Negative None Positive
Percentage
Corporate Social ResponsibilityCurrent 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
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.