Giving increases in some sectors, not in others

NEW YORK -- Wealthy donors are lavishing money on their favored charities, including universities, hospitals and arts institutions, while giving is flat to social service and church groups more dependent on financially squeezed middle-class donors, according to the latest comprehensive report on how Americans give away their money.

The Giving USA report, being released today, said Americans gave an estimated $335.17 billion to charity in 2013, up 3 percent from 2012 after adjustment for inflation.

Reflecting the nation's widening wealth gap, some sectors fared far better than others. Adjusted for inflation, giving was up 7.4 percent for education, 6.3 percent for the arts and humanities, and 4.5 percent for health organizations, while giving to religious groups declined by 1.6 percent and giving to social service groups rose by only 0.7 percent.

Experts with the Giving USA Foundation and its research partner, the Indiana University Lilly Family School of Philanthropy, said it was the fourth straight year of increased overall giving, and predicted that within two more years the total could match the pre-recession peak of $347.5 million.

During and immediately after the recession, some wealthy donors shifted their giving to social service groups working to combat hunger and homelessness, according to Patrick Rooney, associate dean of the school of philanthropy. Now, many of those donors -- including some making multimillion-dollar gifts -- are refocusing their attention on higher education, the arts and other sectors long patronized by the affluent, he said.

The trend is readily apparent in the listings of recent major charitable gifts compiled by the Chronicle of Philanthropy, which provides news coverage of the not-for-profit world.

Among the 100 largest recent gifts, which range from $7.5 million to $275 million, the recipients overwhelmingly are universities and hospitals, along with a few arts institutions. Only four of the gifts are to social service organizations and one to a religious group.

Almost all the U.S. income gains from 2009 to 2012 flowed to the top 1 percent of earners, according to tax data analyzed by economist Emmanuel Saez at the University of California, Berkeley. By contrast, median household income was $51,017 in 2012, $4,600 below its peak in 2007, according to the Census Bureau.

"It's the very wealthiest who have recovered the most in terms of the giving potential, and the very wealthiest do tend to give their biggest gifts to colleges and hospitals," said Stacy Palmer, the Chronicle of Philanthropy's editor.

Those are the institutions that ask more effectively, she added. "They have development offices who offer donors these ambitious plans."

In contrast, she said many social service organizations rely heavily on less wealthy donors who may not yet feel they have fully recovered from the recession. Compounding their struggles, some of those organizations are still experiencing increased demand for services as high unemployment and other social woes persist in many communities, Palmer said.

Rooney noted that many social-service organizations focus on obtaining government contracts and grants, while devoting fewer resources to courting wealthy donors. Universities typically have large, highly professional fundraising staffs, and an easily identifiable pool of potential benefactors.

"For many wealthy alumni, their alma mater is an important part of what made them who they are," Rooney said.

As usual, religious organizations received more donations than any other sector in 2013, with $105.5 billion in gifts. However, Giving USA said that was the lowest portion of total giving -- 31 percent -- for church groups in four decades.

Rooney said giving to churches has been relatively flat for about 15 years, as many denominations report declining attendance, and polls show a drop in the percentage of Americans who consider themselves religious.

"If you don't attend church, you're not likely to give," said Rooney. "And most churches' fundraising efforts are `Pass the plate."' They don't have staff with a more scientific approach."

The Illinois-based research firm Empty Tomb, which tracks religious giving trends, says church members are giving less of their income to their churches than they used to -- 2.3 percent in 2011 compared to 3.1 percent in 1968.

One consequence, according to Empty Tomb vice president Sylvia Ronsvalle, is relatively less money available for the churches' social service and missionary programs.

"I fault church leadership for not giving people a vision," she said. "We've left the playing field to these other categories."

The nation's largest Protestant denomination, the Southern Baptist Convention, reported earlier this month that the total of gifts to its churches dropped by nearly 1.4 percent last year.

Bill Townes, the SBC's vice president for finance, said the denomination continued to believe it can carry out its mission, but said of the giving trend, "We'd like it to turn around."

Depending on the means of measurement, both wealthy Americans and those of more modest means can claim credit for their generosity.

According to a 2012 Bank of America study, the wealthiest 3 percent of American households accounted for about 35 percent of all giving by individuals in 2011.

Yet the National Center for Charitable Statistics, citing IRS data for 2011, said Americans with incomes under $100,000 gave away a higher percentage of their income -- about 3.6 percent -- than those with incomes between $100,000 and $1 million, for whom the figure was about 2.5 percent. Other studies have found that residents of relatively poor states in the South -- including Alabama and Mississippi -- are among the most generous in the nation in terms of the percentage of their discretionary income that they gave to charity.

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Online: http://www.givingusareports.org/

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