Americans' generous reach
Prosperity and technology drive charity to new heights.
NEW YORK — Bolstered by a robust US economy and the newfound power of electronic banking and the Internet, Americans continue to open wallets and support hundreds of thousands of charitable institutions.
All told, say experts, Americans are expected to give more than $200 billion to charities in the year 2000, up from $190 billion in 1999. And last year's giving was up almost 7 percent over 1998, the fifth consecutive year of increases in inflation-adjusted dollars.
The increase in giving "goes along with the economy," says Daniel Borochoff, president of the American Institute of Philanthropy (AIP). When the economy is strong, giving is strong, he says. Moreover, money is now flowing into charitable coffers at an accelerated rate as individuals attempt to take significant write-offs before the year-end tax deadline.
For countless charities, the calendar is crucial. Some 40 percent of all charitable giving comes at the end of the year, between November and December. That means that thousands of individuals are now focusing on what they can contribute - and which charities to support, says Ann Kaplan, editor of Giving USA in Indianapolis.
Individuals contribute roughly 75 percent of all charitable donations in the US, according to analysis by the American Association of Fund-Raising Counsel Trust for Philanthropy. Much of the remainder is from large foundations.
Giving this year is coming in a variety of inventive ways, often involving electronic transfers from banks and other financial institutions, or donations offered via the Internet.
Case-in-point: More than 18,500 families now make church offerings through an electronic-funds-transfer program initiated by the Lutheran Brotherhood, a fraternal benefit society based in Minneapolis.
Lutheran families "like the program because it helps ensure that they meet their monthly tithing to local congregations," says David Rustad, a spokesman for the Lutheran Brotherhood. And pastors and church boards like the program because it helps even out fund flows in down months, especially during the summer, when many church members are on vacation, he says.
Still, traditional fundraising methods continue to be important. One jolly, red-cheeked bell ringer, who collects cash for the Salvation Army on West 42nd Street in New York, says individuals "are as open-hearted as ever" in throwing spare change into the collection pot. While he talks, a radio cassette at his feet plays familiar Christmas music.
Meantime, not far away, on West 31st Street, Rosemary Gallo is making an annual contribution to the St. Francis of Assisi bread line, one of the oldest charitable food services in the Eastern US. This year, she says, she is adding "an additional amount of money," reflecting a pay increase at her job.
Still, while traditional methods of giving flourish, the winds of change are in the air for the philanthropic field:
One major development: The Internet is becoming a significant force. (See story on page 17.)
While the amount of money donated via the Net is only about 1 percent of total giving, a year or so ago it was virtually unrecordable, note experts such as Mr. Borochoff.
Moreover, the average contribution over the Internet is larger than in traditional mail-oriented giving. Whether this reflects the lure of the Web - or the fact that Internet users tend to have greater financial means than nonusers - is still unclear.
For charities using the Internet, the results have in some cases been astonishing. The American Red Cross, for example, raised $2.2 million over the Web in its past fiscal year ending June 30, up from $172,000 in 1998. That's a 13-fold increase.
Among other current developments:
* Two main charity-evaluation and information agencies, the National Charities Information Bureau and the Philanthropic Advisory Service of the Council of Better Business Bureaus, are merging their annual rankings of nonprofits.
The new evaluation service will be called the Better Business Bureau Wise Giving Alliance, and will operate out of Arlington, Va., according to Bennett Weiner, an official of the Better Business Bureaus.
"The standards [of the two monitoring services] have been somewhat similar" says Mr. Weiner, so he does not see any drastic changes in terms of individual evaluations.
* Some organizations have moved up the charity roster in terms of receiving money. The Lutheran Services in America organization, for example, is now the top-listed charity in terms of dollar contributions, according to the NonProfit Times. (See chart, page 16.)
But officials for the St. Paul, Minn.-based Lutheran Services agency stress that the organization is largely collating information from local Lutheran-service organizations, rather than receiving dollars itself .
The Nature Conservancy, which often finds itself in controversy because of the difficulty of assessing its expenditures on services, meanwhile, has shot up into the Top 10 charities (see story, page 17). The National Audubon Society, meanwhile, fell from the list of the 100 largest charities ranked by the NonProfit Times.
* Stock market or investment-oriented trust accounts, such as charitable funds offered by Fidelity Investments, the Vanguard Group, and Charles Schwab, have now become powerhouses in their own right, with some listed among the largest philanthropic groups in the US.
Experts note that while more and more dollars flow into charities (either in the form of cash, stock, or land transactions), the actual level of contributions, in terms of national economic product, has remained fairly consistent over the years.
For 1999, the amount was 2.1 percent of US gross domestic product. That's not all that much different than the prior year.
A coming wave?
Still, some experts believe that level could rise in the years ahead. By one reckoning, more than $40 trillion is expected to be inherited by younger generations in the next half century.
A substantial portion of that amount, perhaps more than $6 trillion, could be rolled over to charities, according to an analysis by Boston College Profs. Paul Schervish and John Havens. The prediction is based on a US economic growth rate of 2 percent. If the economy grows faster, the amount of money flowing to charities could be even larger - perhaps up to $11 trillion, according to the study.
Yet this amount could be significantly lower if a new presidential administration changes or eliminates estate-tax laws. (see column, page 21).
The important point, though, is that there is still time, here and now, for each individual to contribute to a charity of his or her choice, says Ms. Kaplan of Giving USA.
(c) Copyright 2000. The Christian Science Publishing Society