2% Giving Flat for Forty Years

Blackbaud released a report called Growing Philanthropy in the United States this week. Why do we need to grow philanthropy? Because:

In the U .S ., charitable giving is estimated to be only 2 percent of average household disposable (after tax) income (Giving USA Foundation 2011) . Regrettably, this is also the 40 year average for this figure, indicating that, despite an increasing marketing effort on the part of nonprofits (Sargeant and Jay 2010), individuals today are no more generous than their predecessors were over four decades ago . The picture is very similar in other countries (e .g . National Council for Voluntary Organizations 2010) .

I asked one of the authors, Jen Shang, to clarify how it is that we have so many nonprofits now than forty years ago but giving hasn’t increased. She said, “So the reason why total giving has been rising but not percentage of giving is because total household income has been rising.” In, addition, although Jen said it wasn’t the data they studied, we simply have more households than forty years ago, so giving would go up.

Nonetheless, the notion that after forty years of saturation by nonprofit marketers and the percentage of income we give hasn’t gone up. These data come from the annual report of Giving USA. Here is the total giving pie for 2010:

And now I’m confounded. After all of that running and cookie buying and dinners-gone-to there is no increase? Certainly the number of causes has increased exponentially, but so have the number of people, so maybe that’s a wash. I feel like I’m missing something big here. Are these data not including embedded giving where we feel like we’ve given a donation even if that gift is kept opaque by a corporation? Are we spending more time volunteering instead of writing checks? Are more of us giving the 2% than in previous generations?

Lucy, Katya, Amy, Tom…a little help, please?

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About the author

Allison Fine
  • http://www.communityorganizer20.com Debra Askanase

    While it may be true that total household income is rising, it’s generally not rising when you count in the increase in cost of living over the past forty years. In addition, there are more households in the world than there were 40 years ago, which explains both why nonprofit organizations continue to be solvent and why total giving has been rising. However, I’m in agreement with you in that I suspect a lot of the giving isn’t counted in this report. In particular, I think of the rise of “checkout giving,” that $1 donation at checkout to a nonprofit, and the related jump in cause marketing over the past many years.

    What I do know from my own research when I worked at FirstGiving, and from all the other published online fundraising vendors, is that online giving is rising year over year, at an increasing rate. How online efforts of nonprofits to reach a broader spectrum of fans and a new generation of donors will impact household giving over the next twenty years may be the untold story.

  • http://www.yourpartmatters.org Jeff Shuck

    Allison, you have hit on one of the core dynamics shaping the entire nonprofit system. It is surprising not only for its 40-year consistency, but more notably for the fact that most nonprofit leaders seem to be completely unaware of it. I am constantly struck but how few nonprofit executives, development professionals, and marketers will acknowledge that giving is pegged to GDP. The few who do know seem to think (or hope) that their own organizations exist outside of this reality.

    As you point out, Giving USA has been tracking this for years and years. About five years ago – prior to banking explosions but well into early signs of recession – I wrote several position papers on this topic for our clients at Event 360. If giving is constant as a percentage of GDP, it stands to reason that dollar giving will go up in times of growth – and unfortunately, will decline in times of recession. That is exactly what happened, of course; but even organizations which saw the recession coming were unprepared for the drop in giving.

    As to explanations for “why” this dynamic exists, my own experience with very large peer-to-peer programs has probably colored my view too much. But I will say we consistently find that it is easier to get people who are already giving to give more than it is to get people who haven’t done anything to make the first gift. My sense is that this same truism operates at a system-wide level in the whole nonprofit space.

    After twenty years in the space I’m not sure that we’ve gotten any better at getting the large numbers of people who do not donate a thing to get involved. And before I go further: My last sentence references another large dynamic that those of us who live and breathe charity tend to forget. We are surrounded by giving and so we forget that large numbers of people do not give at all. A Harris Interactive poll conducted late last year found that only 12% of people admit to not giving at all; but ominously, the same poll found that only about a quarter of people felt “some responsibility to improve the world they live in.” Wow. Further, we tend to forget that of individuals who do give, over a third of that giving come from and goes to religious organizations – the only organizations I’ve run across which have integrated a recurring, weekly, in-person, experiential ask into their mission. They ask in the pews, every Sunday.

    In any case, my point is that I think we’ve gotten a lot better at activating those who are charitable, but not any better at inspiring new charitableness. When one-quarter is literally carrying the weight of the world, we’ve got a big challenge on our hands. We need to make giving more accessible and less tedious, and as amazing as it may sound, we need to do more not only to emphasize this cause or that but to convey the obligation, transcendence, and joy of giving itself.

    Jeff Shuck
    President and CEO
    Event 360, Inc.

    • http://www.netwitsthinktank.com frank

      Awesome stuff Jeff!

  • http://www.netwitsthinktank.com frank

    Thanks for sharing with your reader and asking the perplexing question Allison!!

    Adrian Sargeant and Jen Shang along with the group of 35 folks at the summit did some great discovery.

    And it’s awesome to see people picking up the dialog around the web!

    I’m definitely interested to see what people have to say in the comments here. Jeff and Deb already have added some great points.

    frank

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  • http://charityhowto.com/upcoming.php Mazarine

    I’ve seen the GivingUSA charts as well, and the numbers are chilling.

    My solution? We need to pay more attention to our volunteer programs. volunteers give 10x as much as donors who do not volunteer.

    Having a volunteer program therefore is not a frivolity, but a necessity that should be built into our fundraising programs, with a place for anyone from five years old to 95 years old.

    And if you want to learn more, I have a webinar that goes into great detail about how to fundraise from and with volunteers. http://charityhowto.com/upcoming.php

    Peace,

    Mazarine

    • Allison Fine

      Excellent suggestion, thanks!

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