February 6, 2012

4 Key Predictions for Charitable Giving in 2012

Growth in giving will increase this year, though at a slower pace than in 2011, but where will it come from and where will it go?

Charitable giving in the U.S. significantly outpaced economic growth last year, according to a recent Atlas of Giving report.

Contributions totaled more than $346 billion, up 7.5% from 2010, and are on track to grow further in 2012.

Several factors accounted for the growth in 2011: robust stock market performance in the first half through July, low interest rates and moderate inflation. As well, nonprofit groups increased their solicitation efforts.

Last year saw both winners and laggards in the fund-raising game. Education did especially well, with contributions to the sector growing by 9.8%. Contributions and grant making at donor-advised funds such as Vanguard Charitable set records.

At the same time, religion, the largest giving sector, lost a full percentage point in total gifts last year. And organizations with fundraising portfolios weighted toward smaller gifts lagged owing to continued high employment.

Human needs/disaster services sector grew at a more moderate pace than other sectors in 2011, up 5.8%. Atlas of Giving ascribed this to the outpouring of support for Haiti Earthquake relief in 2010, which was not repeated in 2011.

Pennsylvania (up 11.8%), Illinois (up 11.4%) and Florida (up 10.5%) experienced much stronger giving growth than other states last year. However, they appear to have reached a plateau, and are unlikely to grow much in the coming year.

Atlas of Giving made four key predictions for 2012:

1. MORE CHARITABLE?

Charitable giving will grow by 3.9% in 2012. It is predicted to reach nearly $360 billion, up from $322 billion in 2010 and $346 billion in 2011.

2. GREEN FOR GREEN

The year 2012 looks especially hopeful for the environmental sector, with 8% growth predicted. However, giving to religion/churches will grow only by 1.6%.

3. WHERE THE CASH WILL COME FROM

Giving sources will contribute in approximately the same proportions as they did last year. Individual donors will continue to account for 75% of all U.S. giving. Foundations will give 13%, bequests 7% and corporations 5%.

President Obama at a rally in 2010. (Photo: AP)4. POLITICS OF GIVING

Political fundraising will take some money from charitable giving, but the effect is unlikely to be significant. Last year, it accounted for less than 1% diverted from charitable donations. Atlas of Giving noted that the diversion of money to political causes will affect organizations funded by politically conservative people most.

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