Tough times for stepping up
Americans struggle to flex their charitable muscle in today's lean economy. But giving still rises, slowly.
If Americans showed some philanthropic muscle after Sept. 11, 2001, then they're showing some fatigue right now. Fourteen months later, amid an economic recovery that can't seem to get going, America's charitable institutions are struggling to meet rising demands for help.Skip to next paragraph
Subscribe Today to the Monitor
Donations by individuals, businesses, and foundations, appear not to be keeping pace with the need to feed, house, and clothe America's poor.
Also hard hit: many educational, religious, and arts organizations, as well as animal shelters and other small, single-purpose groups. They all saw potential donations siphoned away by the great, immediate human need in the wake of the terrorist attacks.
Yet, across the board, "the needs for help are as high or higher than in recent years," says Leo Arnoult, chairman of the Trust for Philanthropy, an arm of the American Association of Fundraising Counsel (AAFRC).
As a consequence, philanthropic groups are curbing costs by holding the line on staffing, trying more efficient methods of identifying potential donors, and avoiding marginal or unnecessary new program services. They are seeking donations in whatever form they can get them, including land, which has in many cases appreciated in value.
Charitable giving in 2001 reached $212 billion, according to Giving USA, one of the main sources of information on philanthropy in the United States.
That represented only a half a percentage point increase over the prior year, and well below the 6 percent rate of growth in 2000, at the end of the booming-stock euphoria of the 1990s.
Barring a last-minute spurt of giving during the holiday season, donations are not expected to grow substantially for 2002 over last year.
Most charities would be pleased just to hold their own this year, with perhaps a modest increase in funding to offset rising costs, says Mr. Arnoult.
"There is unfortunately a lagging effect under way now," stemming from a drop-off in donations after last fall's surge, says Stacy Palmer, editor of the Chronicle of Philanthropy, a nonprofit trade paper. "In 2001, the numbers were somewhat better because there were a lot of gifts in the [distribution] pipeline. Now, most of those gifts have been paid out, and there are fewer new big donations to replace them."
Charitable giving comes in four key areas, according to Giving USA: gifts from individuals, which represent about 75 percent of all donations; foundation grants, which constitute about 12 percent; bequests, about 8 percent; and corporate giving, about 4-5 percent.
This year, contributions from individuals, bequests, and corporations are believed to be either down or just holding their own. A recent survey by the American Affluence Research Center (AARC), in Pinecrest, Fla., concluded that about 1 in 5 respondents among those individuals with more than $3 million in assets planned to reduce their giving this year. Only about 1 in 10 planned to increase giving.
Traditionally, "high-net-worth individuals tend to make regular charitable donations, in part because of tax advantages," says Howard Waddell, executive director of AARC. For those with a gross adjusted income of between $200,000 and $500,000, the average annual donation is about $8,400, says Mr. Waddell, citing IRS statistics.