News From the President 11.9.2017

News From the President

Susan Shattuck:

By all indicators 2016 was a record year for charitable giving in the US, bringing in an estimated $390 billion at 2.1 percent of GDP, and a record increase of $8.96 billion between 2015 and 2016 surpassing the 40-year average.

The majority of that giving came from individuals.  No surprise as individual giving dates back to the founding of our country.  Yet the percentage of taxpayers reporting a charitable gift was down significantly from 30 percent to as low as 24 percent in 2016. That means the 2016 record year was made possible by a large percentage of individual wealthy donors.

According to a number of studies, Americans in the past decade have taken fewer deductions of any kind.  The country’s widening income disparity, middle-class struggles and loss of jobs likely contribute.  When the Great Recession hit in 2008 total donations dropped 7 percent.  While many people are much better off now, they are not giving as they previously did, and their numbers are falling.

Recent critiques of the rise of megagifts from billionaires to nonprofits express concern that nonprofits may become more dependent on the wealthy and ignore smaller donors.  Donations from households earning $200,000 or more now total 52 percent of all itemized contributions.

Some wonder if many Americans got out of the giving habit after the downturn.

A recent working paper from A&M University looked into it.  Their lead economist Jonathan Meer looked at extensive data from the federal government’s Survey of Income and Program Participation. Giving dropped on average by more than he’d expected based on families’ financial circumstances, “suggesting that broader shifts in attitudes towards giving or increased uncertainty are at work” according to Meer and his team.

Whatever the reasons and whatever the amount mustered, I hope all Americans will once again embrace our heritage of giving.

 

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