As we conclude this month, we are left to consider the results of the 2014 Giving USA report. This report regularly provides information regarding the results of charitable giving in the United States for the previous year. While the general highlights are nearly all positive (4.4% increase in U.S. charitable giving, 4.2% increase in giving by individuals, 5.7% increase in giving by foundations, 8.7% increase in giving by bequest and a 1.9% decline in corporate giving) what does it all mean? The increase in total giving marks the fourth straight year of increased charitable giving. This increase was caused by generally favorable economic conditions we experienced with increases to the S&P 500 Index, GDP and corporate profits (though corporate profit growth slowed over the year previous) and increasing donor confidence especially by wealthy donors. The good news is that the slow recovery projected by the major journals has turned out to be true, but the projected return to pre-recession (2007) giving levels should arrive within the next year or two—a year or so earlier than anticipated. This represents an accelerated recovery that is good for nonprofits.
There is good news for nonprofits in the areas of education and public-society benefit. The education segment grew 8.9 % driven mostly by increases in giving to higher education and K-12 educational institutions. The religion and international affairs segments both showed slowing, reflecting fewer disaster-related giving over the previous year as well as declining religious affiliations and increase giving to religious-oriented charitable caused classified in other areas. Corporate giving’s decline reflects the slow growth in corporate pre-tax profits. Giving by corporations represented 5% of the $335.17 billion overall total giving.
The giving climate is indeed recovering but is doing so slowly. A source of good news is that the recovery rate should bring about a return to pre-2007 giving rates about a year or two sooner than projected. Wealthy donors are again gaining confidence and that is reflected in a return of support for many of their charities of interest (clearly reflected with the improvement of giving to arts organizations over the year prior). A focus on donor engagement and stewardship are recommended during this time as well as building a compelling narrative of your organizations importance and how this favorable environment is driving innovation and service. During this time of growth, nonprofits are again positioned for success. Engaging donors, showcasing your mission and having and quantifying your impact will be key to nonprofit success in the short-term.