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November 21, 2018 at 10:43 AM
The U.S. charitable giving sector is currently transitioning from broad-based support across a wide range of donors to top-heavy philanthropy increasingly dominated by a small number of very wealthy individuals and foundations, the Institute for Policy Studies, a progressive think tank, reported Monday.
This trend, the report said, has significant implications for the practice of fundraising, the role of the independent nonprofit sector and the health of the country’s larger democratic civil society.
“Over the last three decades, private wealth in the U.S. has become concentrated in fewer and fewer hands,” Chuck Collins, director of IPS’ program on inequality and co-editor of Inequality.org, said in a statement. “We’re now seeing this same trend in the charitable sector as a growing amount of philanthropic power is being held in fewer hands.”
According to the report, the share of contributions from wealthy donors has increased significantly over the past decade, rising from 30% of all charitable deductions coming from households earning $200,000 or more in the early 2000s to 52% by 2017.
The percentage of charitable deductions from households making over $1 million — not adjusted for inflation — grew from 12% in 1995 to 30% in 2015.
Mega-gifting has surged. According to the research, the threshold for mega-gifts in 2012 was $50 million or more, with gifts of that size amounting to $1.2 billion and accounting for just 0.5% of all individual giving in the U.S. that year.
By 2017, the threshold for mega-gifts had jumped to $300 million or more, and gifts of that size totaled $4.1 billion and accounted for about 1.5% of all individual giving that year.
Former New York Mayor Michael Bloomberg announced Monday that he is donating $1.8 billion to Johns Hopkins University, his alma mater, to help low- and moderate-income students attend the school without worrying about cost.
In 2010, Bill and Melinda Gates started and signed the Giving Pledge, in which the ultra-wealthy promise to donate more than half their wealth to philanthropy and charitable causes. Since then, 186 individuals and couples have signed, including 144 in the Americas.
The IPS reported that from 2000 to 2014, the proportion of households giving to charity dropped from 66% to 55%.
Traditionally, low-dollar and midlevel donors made up the vast majority of donor files and solicitation lists for most national charities. However, the new report finds that the number of donors who give at typical donation level has been falling for more than 15 years, declining by about 2% a year.
