November 6, 2013

The good news for nonprofit organizations is that charitable giving is on the rise.

The not-so-good news is that it is expected to be another five years before contributions reach pre-recession levels, according to a recent report by Giving USA.

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Overall, there was a 3.5 percent increase in charitable giving for 2012, for a total of $316 billion. Contribution levels in 2007 were $344 billion.

“When you consider all the factors that go into determining how much we give to charity, modest growth makes sense and is actually encouraging,” said Gregg Carlson, chair of the foundation that publishes the findings of the Giving USA research organization.

“Most households feel pressured at every economic corner, but the longstanding social contract between Americans and the nonprofits they believe in remains resilient and intact. Many see giving as a core budget item. The amount devoted to that category might shift up or down with annual economic realities, but it doesn’t go away,” he said.

The largest increase came in corporate giving – in part because of record profits in the second half of the year – with an increase of more than 12.2 percent. Many of those were gifts-in-kind rather than cash, such as pharmaceuticals, medical supplies and food.

Corporate giving represents only about 6 percent of total giving. However, with individual gifts representing by far the most at 81 percent of all gifts.

Foundations saw a 4.4 percent increase in donations, while individual giving increased by 3.9 percent over the previous year. Charitable bequests had a 7 percent drop.

A big bright spot in giving by individuals is the size of gifts by some of the country’s wealthiest donors. Nine gifts of $100 million or more were made, including a $1 billion gift of 78 cubist artworks to the Metropolitan Museum of Art by tycoon Leonard Lauder.

Boosted by Lauder’s gift, arts, culture and humanities organizations saw the largest increase in donations over the previous year, 7.8 percent. Giving to educational institutions, in particular colleges, increased by 7 percent, and another strong area was giving to environmental and animal groups, a 6.8 percent increase.

At the other end, religious groups saw a slight decline in contributions, -0.2 percent, although religious organizations continued to receive a larger share of contributions than any other cause, 32 percent, Giving USA found.

The report cited possible reasons for the decline as lower church attendance, particularly at Protestant churches, and people’s preference to choose their own charities rather than contribute to church-supported charities.

International giving, which had been growing in response to disasters in Haiti, Japan and other countries, leveled off in 2012 as Americans focused their attention on Hurricane Sandy and other domestic disasters.

This article was originally posted on November 6, 2013 and the information may no longer be current. For questions, please contact GRF CPAs & Advisors at