Rise in giving signals economic rebound
By Annie Gowen,
An annual report released Monday shows that charitable giving in the United States grew nearly 4 percent last year after two years of steep declines, which some experts say is a sign the economy is slowly rebounding.
Individuals and corporations donated an estimated $290 billion last year, an increase of $10 billion from the previous year, according to the Giving USA Foundation, which has tracked charitable giving in the country since 1956.
Donations to education, health institutions, and arts and humanities organizations were up, while overall corporate donations rose nearly 11 percent, the study found. Amid other more glum economic news in recent days, such as slowing job growth, many found the upward trend encouraging.
“Giving’s back,” said Eric Kessler, managing director of Arabella Philanthropic Investment Advisors, which oversees about half a billion dollars in charitable giving. “Philanthropists are feeling more comfortable with the economy.”
Several of his clients who had scaled back their charitable work or put off new projects during the downturn are now giving again and expanding their efforts, Kessler said. For example, the Palmer Foundation, a private family organization that Kessler manages in the District, gave as usual to children’s and other social causes throughout the recession, he said. But with its portfolio rebounding, the Palmer family recently expanded its causes, donating $100,000 for Chesapeake Bay restoration.
“They feel more comfortable now that the recession is over and decided to try new things,” Kessler said.
Patrick M. Rooney, executive director of the Center on Philanthropy at Indiana University, a partner on the study, said the findings mirror what is going on in the economy overall. “It’s great that it’s happening,” Rooney said. “We’re experiencing a modest recovery, so it’s not a huge surprise that the recovery in philanthropy would be more modest as well.”
Rooney said the big jump in corporate giving was tied to the fact that pretax corporate profits were up significantly last year — by 37 percent, according to the Bureau of Economic Analysis. The increase also brought giving back to pre-recession levels, when corporate donations fell to as low as $12 billion in 2008. Individual donations were up nearly 3 percent, to $212 billion, while foundation giving remained stagnant.
The increase in corporate giving in 2010 was driven by donations to disaster relief, primarily to Haiti, and by large pharmaceutical companies that gave medicine to people with inadequate insurance, according to Alison Rose of the Committee Encouraging Corporate Philanthropy, a New York group that tracks trends in corporate giving.
Giving to churches and other religious causes — by far the largest share of all giving at 35 percent of the total, an estimated $100 billion — stayed essentially flat in the last year, according to the report. But giving to arts, culture and humanities organizations increased by nearly 6 percent.
Marie Mattson, vice president for development at the John F. Kennedy Center for the Performing Arts, said overall contributions are increasing — on target to be about $75 million this year — and the center is seeing more guests at its special events. Membership to its annual corporate giving fund is on the rise again, after plummeting to $4.2 million from a high of $5 million before the recession hit.
“Our business as usual feels less strained,” she said. “Things definitely feel better.”
On the down side, giving to human services organizations remained stagnant — and would have been down 4 percent without the $1.4 billion that was contributed for Haiti relief, the report said.
That was unhappy news to the many local agencies that help the poor and homeless and have been overwhelmed by new clientele and increasing demands in the last three years.
Kim Damion, executive director of the Manna Food Center in Gaithersburg, said that when the economic bad times first hit, the Montgomery County community stepped up its response with individual donations and more food drives. But now the group’s county funding has been cut and corporate donations are down about $47,000. Meanwhile, the same number of needy people — up to 200 or more a day — keep coming through the door.
“We’re still at a record high, and that’s what folks don’t understand,” Damion said. “I think the community has been very responsive when they feel it’s a crisis . . . but they are starting to think this is the ‘new normal’ and to retreat back to old giving patterns. For us that can be problematic. The lines have not become shorter at the food bank.”