Good New, Bad News: Charitable Giving in 2008

This just in – despite the economic downturn, charitable giving decreased only 2% in 2008.

The good news is that people have continued to give generously despite economic hardship. The bad news is that donations to most nonprofits were coming in at a standard pace until the final quarter of 2008 – traditionally the season for most donations – and the downward trend is continuing into 2009.

According to GivingUSA Foundation, which has done an annual charitable giving survey since 1956, this is only the second year-to-year decline in more than a half century. The last overall drop was in 1987, which was the year of the Black Monday stock market collapse. The current drop was calculated by Giving USA in current dollars. If adjusted for inflation, total giving was down 5.7 percent. Based on research by the Center on Philanthropy at Indiana University, the survey includes examination of more than 400,000 federal tax forms.

Total giving in 2008 was $307.65 billion, down from a record $314.07 billion in 2007. Hardest hit were nonprofit social services agencies, with a 12.7 percent decrease in donations in a year when many were experiencing increasing demand for help and assistance. In fact, two-thirds of the nation’s nonprofits experienced decreases. Education organizations saw a decrease of 5.5 percent; health organizations 5.6 percent; arts/culture/humanities groups 6.4 percent; and environment/animal welfare agencies 5.5 percent.

Strikingly, in the midst of the recession, religious organizations received $106.78 billion (35 percent of total giving), which represented an increase of 5.5 percent from 2007. Donations to international affairs organizations also increased, but by a mere 0.6 percent.

Individual giving continued to be the biggest source of gifts, with an estimated $229.28 billion (75 percent of the 2008 total) - down 2.7 percent from 2008. Corporate giving decreased by 4.5 percent to $14.5 billion. Surprisingly, foundation grant-making was up 3 percent, to $41.21 billion.

There are two lessons here for nonprofits. The first lesson is that the worst may not be over, and nonprofits should be prepared to economize - and be creative. The second lesson is fundamental to all fundraising: religious organizations continue to top the donation list because they ask. They ask all the time, and they ask everyone, regardless of economic status and regardless of the state of the national economy. So train your board and your staff, scrutinize and improve your fundraising, and keep asking.