Giving in the USA: Generosity on the Rise

by Richard T. Jolly, Chair,
Giving USA Foundation

If the numbers we report on in "Giving USA" every year are any indication, philanthropy is thriving in the United States. The generosity of Americans is truly remarkable. Last year, Americans donated some $260.28 billion.

The great theologian Albert Schweitzer once said, "I have always held firmly to the thought that each one of us can do a little to bring some portion of misery to an end." Apparently Americans agree with that philosophy, as two-thirds of us donate something to charity every year, based on Giving USA's examination of tax data and household surveys conducted by our research partner, the Center on Philanthropy at Indiana University.

Individuals Outgive Organizations

One statistic that often surprises our readers is that most annual donations come from individuals. Most people assume that foundations and corporations give the most money, but that is simply not the case.

Over the 51 years that we've been tracking giving, donations from individuals have typically accounted for about 75 percent of donations to charity. When you add the donations in the form of bequests, the total rises even higher, to 83.2 percent of all giving. Corporations contributed about 5 percent of the giving "pie," and foundations another 11.8 percent to round out the numbers on the "sources" side of the pie.

Disaster Response Boosts Giving

What else do the numbers tell us? Historically, giving closely follows the economy, and 2005 was no exception -- although there is a caveat. The economy and stock market were relatively flat in 2005, but giving was high, largely because of the response to disasters. The estimated $7.37 billion given to entities like the American Red Cross and Salvation Army equated to about 3 percent of total giving and pushed the constant-dollar total to a new record.

So in addition to showing compassion for those in need, our numbers suggest that "donor fatigue" is a myth. While charitable organizations were concerned that their donors would be tired of solicitations and quit responding, that simply was not the case. While giving might go up or down slightly in any given subsector in any given year, overall, giving continues to move along at the pace of roughly 2 percent of the gross national product and 2 percent of disposable personal income.

In addition to the regular donations they already planned to make, Americans reached back into their pockets to donate to disaster relief in the wake of the Asian tsunami; Hurricanes Katrina, Rita, and Wilma; and the earthquake in Pakistan, the major disasters that befell the globe starting in late December 2004.

More Charities Mean More Choices for Donors

If current trends continue, Americans will have a harder and harder time trying to decide who to give their money to, as the number of registered 501(c)(3) organizations grew exponentially to more than 1 million in 2005. Just 10 years ago, the number was 626,225, so you can see the dilemma nonprofits face as they compete for contributions.

Religious Organizations and Disaster Relief Lead the Way

What about the recipients of this giving? As usual, religious organizations received the largest portion of the charitable dollar; that subsector accounted for 35.8 percent of all giving in 2005. Giving to religious organizations, in fact, was up for the year, rising to an estimated $93.18 billion, a 5.9 percent increase in current dollars.

Also of note is the response religious organizations made to disaster relief. In addition to the $430 million that was raised in cash donations, untold millions of dollars worth of time and goods were donated to relieve the suffering of those affected.

The Future of Giving

Schweitzer commented that "A man is ethical only when life, as such, is sacred to him, that of plants and animals as that of his fellow men, and when he devotes himself helpfully to all life that is in need of help."

Call me an optimist, but I think that Americans have responded in spades to Schweitzer's challenge. Could we do more? Of course. We could always donate more money, more goods, and more time to charitable endeavors. But Americans are responding to the call, and they are responding time in and time out. For that, we can all be thankful.

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Chair of the Giving USA Foundation^TM, Richard Jolly has nearly 30 years of experience in fundraising and consulting. He has consulted on campaigns for colleges, universities, and libraries, as well as religious denominations, seminaries, art museums, and other nonprofit institutions. He has served on the board of Marts & Lundy since 1988 and is currently vice president for client and consultant services.