Record Philanthropic Giving Again in 2016
Americans gave a record $390.05 billion in 2016, according to Giving USA, released today. Giving grew for the third year in a row, but at a slower rate than the past two years. Giving to all nine nonprofit sectors grew — only the fifth time in the 40-year history of the report that all sectors saw growth.
Giving by individuals (72% of all gifts) continues to fuel philanthropy. Individual giving rose by 2.6% over 2015. Giving by all sources except bequests (individuals, foundations, and corporations) increased over 2015.
- Philanthropic giving has surpassed pre-recession levels, regaining the ground lost during the Great Recession.
- Giving to religion (32%), education (15%), and human services (12%) continue to comprise the lion’s share of all philanthropic contributions.
- Giving to education grew at a slower rate (3.6%) than the prior year’s 8.6% growth and slower than its 5-year average growth rate of 6.9%.
- Corporate giving rose nearly 3.5% in 2016 to $18.55 billion and remains 0.8% of pre-tax profits (compared to a high of 2.0% in 1986).
- Human services organizations comprise the largest percentage of all charities but received only 12% of total giving.
- The number of volunteers declined slightly (62.6 million in 2015 vs. 82.8 million in 2014) but still down in comparison to 2005 (65.4 million). As a share of the U.S. population, the percentage of volunteers continues its steady decline (24.9% in 2015 vs. 28.8% in 2005).
- The total number of 501(c)(3) organizations continued its steady increase in 2016 to 1,237,000, and is closing in on the high of 1,280,739 total nonprofits that existed in 2010.
Five key takeaways the Winkler Group observed from Giving USA 2017:
Takeaway #1: Individual Giving Still Dominates Philanthropy
Individuals gave 72% ($281.86 billion) of all philanthropic gifts in 2016, highlighting the importance of the individual donor base. According to AFP’s Fundraising Effectiveness Project, for every 100 donors gained by nonprofits, 103 are lost. For every $100 in new gifts, $95 is lost. If donor retention rates are improved, individual giving can rise even higher.
—Tim Winkler, Winkler Group CEO
Takeaway #2: Giving to Religion Remains Higher than Any Other Subsector
Contributions to religious organizations comprised 32% of all donations in 2016—twice as many as to the education, the subsector with the next highest percentage. The majority of religious organizations reported increased giving in 2016, and more reported online giving grew at rates higher than more traditional giving methods.
Despite this year’s growth, giving to religion as a percentage of total philanthropic giving continues to decline. Between 1982 and 1986, giving to religion represented an average 58% of total gifts. However, total giving to religion in inflation-adjusted dollars has risen from $332.3 billion given between 1977 and 1981 to $585.6 billion between 2012 and 2016—a 76% increase.
—Tim Winkler, Winkler Group CEO
Takeaway #3: Giving to Education Slowed
The education subsector received the second-largest share of all philanthropic contributions ($57.48 billion; 15% of total giving), but giving growth fell to 3.6% from its 6.9% five-year average. Giving to community colleges increased at a higher rate than did giving to other higher education institutions.
The 2017 Fundraising Effectiveness Survey Report found that the number of new donors to education essentially equaled the number of lapsed donors. Alumni contributions dropped 8.5% over 2015, and recent graduates are more likely to give to organizations other than their alma mater. Universities, colleges, and independent schools can reverse these trends with new methods of engagement and more attention to stewardship efforts.
—Jessica Browning, Winkler Group VP for Communications and Giving USA 2016 Editorial Review Board Member
Takeaway #4: Giving as Percentage of GDP is Stagnant; Volunteer rates continue their steady decline
Philanthropic giving represented 2.1% of the U.S. total GDP. Since Giving USA began compiling data in 1975, giving has never exceeded 2.2% of GDP. Individual giving as a percentage of disposable personal income has not exceeded 2.4% since 1975.
In 2005, 28.8% of Americans volunteered. That rate has steadily declined and is today only 24.9%. To reverse these trends, charities across all sectors can continue to raise awareness, make the case for support, and then show donors a strong return on their philanthropic investment.
—Jennifer Richard, Winkler Group COO former Giving USA Editorial Review Board Member
Takeaway #5: Corporate Giving Patterns are Shifting
Corporate philanthropy saw modest 3.5% growth in 2016 for a total of $18.55 billion. Corporate giving remains at 0.8% of pre-tax profits, down from 2.0% in 1986.
These shifts are attributable to changing corporate giving strategies. Instead of outright philanthropy, corporations are seeking innovating partnerships with nonprofits in addition to more marketing and sponsorship opportunities. Corporate giving is alive and well, but courting them will require more creativity and clear metrics that prove a positive ROI.
—Jennifer Richard, Winkler Group COO and former Giving USA 2016 Editorial Review Board Member
Giving USA Findings
About Giving USA
Giving USA, the longest-running and most comprehensive report of its kind, is an initiative of the Giving Institute, a member-supported organization dedicated to ethics in fundraising. Giving USA is researched and written by the Indiana University Lilly Family School of Philanthropy. The Winkler Group is a member of Giving Institute; Jessica Browning, VP of Communications, serves on Giving USA’s National Editorial Review Board.