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The Journal Gazette

Friday, July 05, 2019 1:00 am

Editorial

Dollars and sense

Charity giving stats reflect economic complications

It's all in how you parse the numbers.

Americans are known for their charitable giving, and the latest Giving USA report, released in June for calendar year 2018, shows total giving at a record $427.71 billion. When you consider that 2017 was the first time giving was estimated to surpass $400 billion, that appears to be a clear win for charitable organizations.

But dig a little deeper and the report from The Giving Institute, researched and written by the Indiana University Lilly Family School of Philanthropy at IUPUI, changes the scoreboard a bit. Adjusted for inflation, 2018 giving was actually 1.7% below 2017's revised total of $424.74 billion – the first drop since the Great Recession.

There were bright spots. Donations from corporations increased 2.9% when adjusted for inflation, or about $20.05 billion. And giving by foundations was also up an inflation-adjusted 4.7% to $75.86 billion. But giving by bequests fell 2.3% when adjusted for inflation. And, giving by individuals – described by many agencies as the bread and butter of fundraising – fell an adjusted 3.4% to $292.09 billion.

Rick Dunham, chair of the Giving USA Foundation, attributed the losses to a combination of economic factors. “The environment for giving in 2018 was far more complex than most years, with shifts in tax policy and the volatility of the stock market,” he said in a written statement. “This is particularly true for the wide range of households that comprise individual giving and provide over two-thirds of all giving.”

While increases in both disposable income and GDP of around 5% portended good news for giving, changes to the federal tax code in December 2017 may have hurt. As a result of a significant increase in the standard deduction, The Urban-Brookings Tax Policy Center estimated the percentage of households itemizing their taxes fell from 26% in 2017 to about 10% in 2018. Individuals and families must itemize to claim deductions for charity giving.

David Nicole, president and CEO of United Way of Allen County, says he has not seen a significant impact from the change. “Results we have locally are not reflective of what's happening on a national scale,” Nicole said. “National trends are being influenced strongly by university giving and hospital giving and the mega-donors – like the Gates and the Zuckerbergs – are skewing some of those numbers. At the local level, our overall number of donors is up, as are the number of large donors.”

That doesn't mean United Way and other local agencies aren't keeping an eye on national trends. “That's the only constant – change,” Nicole said. “It's always on my radar screen.”

When there is less money coming in, there is less to distribute. The Giving USA report also traces where donations go, and the big winners in 2018 – continuing a trend for the past five years – were organizations focused on the environment and animals (up 1.2% adjusted for inflation); and international affairs (up an adjusted 7%). Sectors seeing a decrease in giving included religion, down an adjusted 3.9%; education, at 3.7%; and “public-society benefit” – where United Ways fall – down 6%. Giving USA considered contributions to health organizations as well as the arts, culture and humanities sectors to be flat.

Nicole says he thinks the local United Way's focus on “fighting for families that are working but still struggling to survive” resonates with local givers.

“Every donor is important,” he added, “whether it's a seven-figure donor or a $10 donor, because every donor is investing in the organization and driving the mission forward.”