Hot Topics & Recent Columns

The Giving Sky Is Falling...Or Is It?

The Giving Sky Is Falling...Or Is It?

In the wake of the American Association of Fundraising Counsel (AAFRC)'s annual “Giving USA” survey of philanthropic giving in 2002, The Chronicle of Philanthropy's June 26, 2003 issue features a cover story titled “Hanging On.” The fact that the accompanying cover photo shows a well-dressed woman in a gallery filled with gilt-framed classic art and a marble bust is itself an illustration of the mixed messages about the current state of fund raising.

The charts on page 10 and 11 are produced under a title, “How Giving Fared During Hard Times,” an odd title since the charts detail giving overall and by sector from 1962 to 2002. The title could as accurately have been “How Giving Benefits During Boom Times,” since the charts show both good and bad economic times over the past 40 years.

Upon examining the charts themselves, it's apparent that charity is alive and well. According to the charts, even when adjusted for inflation, charitable giving to all philanthropic service sectors has increased steadily since 1962, with an especially strong increase in most sectors during the 1990's. Overall giving - in inflation-adjusted dollars - has increased over 70% since 1990. Even the slowest-growing sectors of Arts & Culture, Human Services, and Religion each increased 15-20% in inflation-adjusted dollars since 1990. Education, Environment, and Health charities lead the way in the rate of increased contributions received at 90%, 85%, and 65% respectively.

There is also good news on the giving side of the equation. On the “Who Gave” chart on page 7, gifts from individuals and foundations decreased in real (inflation-adjusted) terms in 2002 from 2001 amounts. However, the 2.7% decrease in foundation giving is actually a piece of good news, given the fact that foundation assets and investment income dropped by far larger percentages during the year. The best news of all is that corporations have stepped up to the plate, increasing their inflation-adjusted giving in 2002 by a whopping 8.8% over 2001. Who would have predicted that corporations, which typically tie giving to revenues and, as a giving sector, give about 1.1% of revenues to charity, would buck the sour economic trends in 2002 to increase their giving by a rate almost six times that of inflation?

To be sure, there is some constriction and an economic shake-out occurring in the economy right now. The Education, Health, and Public and Societal Benefit sectors show some signs of real, albeit slight, decline over the past two years. However, one must be very short-sighted to not see that the long-term pictures - both since 1962 and since 1990 - have been especially rosy for philanthropy, and the long-term future looks at least as bright.