Giving from all four categories studied (individuals, bequests, foundations, and corporations) showed healthy increases. Charitable gifts from individuals and their bequests accounted for about 85% of total charitable dollars given. Foundation and corporation giving accounted for the remaining 15%.
Estimated charitable gifts increased from a revised figure of approximately $158 billion to $175 billion between 1997 and 1998. This increase represents a double-digit increase of 10%. Total giving accounted for over 2% of the gross domestic product in 1998 for the first time since 1971.
Reasons behind the numbers
A number of factors helped drive last year’s record figures including low inflation, a good economy, high employment, and a surging stock market, along with more sophisticated fundraising efforts and increased generosity from individuals, foundations, and corporations. America”s charitable organizations also appear to be sharing in the massive intergenerational transfer of wealth predicted by Cornell economists Robert Avery and Michael Rendall. The table above indicates the steady growth of bequests from individuals over the last 10 years. If overall giving had kept pace with the increases reflected among bequests over the past decade, this year”s overall figures would have almost doubled since 1989 to over $200 billion!
What the numbers may mean
A continuing robust economy will help fuel the assets of America’s foundations and profitability of America’s corporate citizens, and thus the likelihood of increased giving from those sources. The ongoing transfer of wealth from senior generations continues to benefit family, friends, and charities they wish to support. The steady upward trend of the stock market should also continue to boost individual giving this year. As Nancye Raybin, chair of the AAFRC Trust for Philanthropy, noted in a prepared statement, a drop in the market does not necessarily slow charitable giving. “Even autumn’s dip in the stock market did not level philanthropic growth,” Raybin pointed out. “Some people may have been more cautious than they would have been otherwise, but the gains of the preceding years still left many Americans with vastly increased wealth, even viewed in the relatively short run.” Those persons whose economic fortunes have improved with the burgeoning economy are now proving more willing to give even more generously than in prior years. It is also reasonable to expect that in addition to gifts from income, an increasing number of gifts of assets will be particularly attractive among persons who enjoy the tax benefits of charitable giving, with those gifts taking the form of gifts of appreciated securities during the remainder of the year.