The NonProfit Times - July 1, 2008 - (Page 18)

Continued from page 17 more successive quarters of a year, the post inflation numbers do show softness, from the living anyway. BEQUESTS, FOUNDATIONS FUEL INCREASE Foundation grantmaking experienced the biggest increase in giving, jumping by 10.3 percent, or 7.3 percent adjusted for inflation.The $38.52 billion given by foundations last year represents 12.6 percent of total estimated giving. By comparison, corporate giving increased only 1.9 percent, which translated into a decline of 0.9 percent given inflation. INDIVIDUAL GIVING Closely tied to corporate profits, corporate giving totaled $15.69 billion in 2007. Last year’s 3.9-percent rise in giving reflects virtually the same growth rate as 2006, The report indicated that the growth in foundation giving reflects the increasing numbut it still represents 2.3 percent of the average American’s disposable income, said Del ber of household or individual donors who, in recent years, have created foundations and Martin, chair of Giving USA FoundationTM. “This figure has stood the test of time, ever are using them as vehicles for focusing their charitable giving and emphasizing certain since we started producing Giving USA 53 years ago,” she said. types of organizations or programs. “Since giving as a general rule follows the economy, the record level of “It is reflective of a trend. What is happening in American society is, giving in 2007 is more proof of how important charitable endeavwe used to have two sectors, the public and private sector.The re2007 Contributions: $306.39 Billion ors are to the two-thirds or more of Americans who donate to ality is we now have three sectors: the public, the private and By Type Of Recipient Organization charity,” Martin said, which equates to some $2,000 per the philanthropic,” said Steve Gunderson, president and household. CEO of the Council on Foundations (COF) in ArlingDeductions carried over and other unallocated giving Individual giving was up an estimated 2.7 perton, Va. “You are looking at $500 billion in assets cent but when adjusted for inflation actually today.The projections by the middle of this cen$23.73 Gifts to grantmaking foundations* dropped by 0.1 percent. The mainstay of tury could be in the trillions in philanthropic 7.7% $27.73 9.1% fundraising and giving, individual giving was assets. The reality is that we’re at $40 billion estimated at $229.03 billion, almost threein annual grantmaking today; those numbers Environment/animals quarters of all giving last year.The growth are expected go up and up,” he said. $6.96 Religion in individual giving “derived more from inGunderson predicted that foundations 2.3% $102.32 come growth than wealth growth,” acwill have become a powerful force in the International affairs 33.4% $13.22 cording to the report. American economy. “We need to recog4.3% Some 51 percent of individual giving nize the roles and responsibilities that Arts, culture, and humanities comes from the 10 percent of houseare part of that paradigm,” including be$13.67 holds in the highest income groups and coming more strategic, focused and 4.5% slightly less coming from the 90 pertransparent, he said.“Just like the public cent with income less than $100,000. and the private sector, the public confi“While higher-income families are major dence in philanthropy is probably going Public-society benefit donors to many important institutions, to be the critical ingredient that will deter$22.65 7.4% ordinary-income donors are vital, too, for mine how far we grow, how far we are or Education the health of the nonprofit sector in this are not regulated, and how we define our $43.32 country,” Martin said. role,” he said. 14.1% Health “It’s very striking that individual giving didn’t Grantmaking foundations usually make $23.15 7.6% keep pace with inflation,” said Salamon. Except for grants from their earnings on current assets, said bequests and foundation grantmaking,“giving actually Melissa Brown, editor of Giving USA. Foundations Human services fell behind inflation in 2007 and that doesn’t harbor real used figures at the end of 2006 and early 2007 -- a time $29.64 9.7% well for 2008 because 2007 was a pretty decent year ecowhen the stock market was still going well – to calculate All figures are rounded. Total may not be 100% nomically. Giving didn’t keep pace with inflation, or with the how much to give away in 2007. The market was still doing *Foundation Center and Giving USA estimate overall growth of the sector,” he said. quite well at that time, so those foundations that invested in stocks Further, considering that almost half of individual giving went to religion saw good returns, generating more investment earnings to give away. ($102 billion), which only grew 1.8 percent after inflation, Salamon said that means givCharitable bequests increased 6.9 percent (4 percent with inflation) to $23.15 billion. ing to all other purposes must have gone down even more sharply to absorb the meager That figure accounted for about 7.6 percent of total estimated giving. rise in half the total. “We are not only dealing with the World War II Paul Schervish, director of the Center on Wealth generation making transfers, but we’re dealing with and Philanthropy at Boston College and a member a generation that came into being following the reof the Giving USA Methodology Advisory Board, cession,” Gunderson said. “As a result, they’re very warned that it’s important not to make too much of hesitant to give their money away. They’re quite this year’s data.“What might be seen as a modest inwilling to make a bequest because their value syscrease, (1 percent over inflation) may next year be tem is right, but they’re going to be cautious,” he viewed as a larger increase or a larger decrease,” he said. said, adding that revised data next year might show “The deaths in 2005 of people with estates of a far different picture. For example, Giving USA’s remore than $1.5 million or more are the most likely vised figures for 2005 now indicate $293.8 billion to be key determinants of change in the amount in total giving, as compared to the $283 billion reclaimed as charitable deductions on estate tax revised last year. turns in 2007,” according to the report. Individual giving usually reflects the economy, The rise in bequests was somewhat surprising, said Elizabeth Boris, director of the Center on Nonsaid Lester Salamon, director of the Center for Civil profits and Philanthropy at the Urban Institute in Society Studies at Johns Hopkins University in BaltiSteve Gunderson Tanya Howe Johnson Washington, D.C.“When the economy kind of flatmore, as some expected a decline as a result of a tens at the end of year, that’s when a lot of individdecrease in the estate tax which tends to erode the ual giving happens, and so people might be a little more cautious when the economy incentive for giving to charity. Perhaps people also had wills in place that hadn’t yet adlooks like it’s tanking,” she said. justed to tax laws. Salamon is pessimistic about the intergenerational transfer of wealth “One might have expected a little more growth in giving rather than 1 percent.The because there might be other uses for that wealth, such as health benefit costs as people trend of total giving being about 2 percent of income has remained about the same for spend more time in nursing homes. Never mind that a big part of the transfer has just the past 50 years. One wonders why we can’t bump that number up with all the new been wiped out in the real estate market, Salamon said. “I don’t know that we’re ever wealth in the country,” Boris said. going to see that supposed intergenerational transfer,” he said. Tanya Howe Johnson,president and CEO of the National Committee on Planned Giving GIVING TO SUBSECTORS (NCPG) in Indianapolis, said bequests could be up for several reasons, including charities While foundations boost grantmaking, they saw the biggest drop in terms of donors doing a better job of marketing bequests, reminding people of the opportunities, financial giving to organizations, declining 9.4 percent, or 11.9 percent adjusted for inflation. advisors asking questions during estate planning and public awareness campaigns. “Many organizations thought that bequests are one of those things that just happen, but you still need to market and remind people and steward the bequest donors,”Johnson said. “Think of the direct mail you get at home.They say ‘Remember us in your will.’ It’s kind of minor, but we’re seeing that kind of thing more and more. It’s starting to penetrate.” Johnson noted that the GivingUSA report provides financial figures but not the number of bequests and that if any organization conducted research on that aspect of giving, it would prove useful.“It would be nice to see if there’s any correlation between the increase in bequest dollars and people actually doing more bequest planning,” she said. JULY 1, 2008 THE NONPROFIT TIMES www.nptimes.com http://www.nptimes.com

Table of Contents Feed for the Digital Edition of The NonProfit Times - July 1, 2008

The NonProfit Times - July 1, 2008 Time to Let GO Sparks Flying From Blackbaud's Bid For Kintera Holiday Jeer Contents Who...When...Where...How...What? The Wrong Arguments Calendar Measure the Unmeasureable Getting Good Advice We Barely Got to Know You Special Report: Giving USA Shows Bequests, Foundations Boosted Otherwise Flat Giving to 306 Billion Dollars National Benchmarking Nothing Is Forever Diversified Planet Business Briefs NPT Jobs Resource Directory Bridge Map Insert

The NonProfit Times - July 1, 2008

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