Support for disaster relief efforts contributed to overall 6.1 percent increase in contributions.
American individuals (living and dead), estates, foundations and corporations gave $260 billion to charitable causes in 2005, according to Giving USA. This represents an increase of 6.1 percent over the revised estimate of $245 billion given in 2004.
Giving USA's research suggests that the American response to disaster relief accounted for just half of this year's increase. The remaining increase is due to more support across the board for religious and educational organizations, health care and human service providers, organizations in the environment and animals subsector, and organizations engaged in international affairs.
Other major observations about the 2005 results have relevance to all nonprofits:
- Reversing a three-year decline in gifts to human services, total contributions in this subsector increased by more than 15 percent, even before including disaster relief donations. When disaster relief contributions are included, the total increase is more than 32 percent.
- In general, disaster relief contributions did not have a negative impact on contributions to other charitable causes.
- Individuals (either alive or deceased) remain the largest single source of contributions. Accounting for an astounding 83.2 percent of 2005 contributions, personal gifts continue to dramatically outpace giving from foundations and corporate sources.
- Americans have not only been more generous with their money, they have also been more generous with their time. According to Volunteering in America: State Trends and Rankings, published by the Corporation for National and Community Service, 65.4 million Americans volunteered in 2005, representing a 10% increase since 2002.
- It is too early to determine the real impact of the Katrina Emergency Tax Relief Act (KETRA) on individual and corporate giving. The report suggests that some late 2005 donors may have made contributions in order to benefit from KETRA's provisions.
Action Steps for Responding to This Report:
The Giving USA report is one of the most important predictors about trends in philanthropy. In looking forward, we suggest the following actions that nonprofits should consider so that results in 2006 and 2007 will be strong:
- Develop a formal, written campaign action plan for the balance of 2006.
- Address the need to attract and retain "lapsed" donors, as they are vital to maintaining a high percentage of renewed and increased contributions.
- Utilize the strengths of your board's Development Committee to develop and implement innovative strategies.
- If your board does not have a Development Committee it is imperative that you create one. It is an important component of any plan to advance your organization, as it attracts the right people and brings credibility.
- Formalize and strengthen your organization's planned giving program. It is important to reach out to donors who are capable of making a charitable gift of estate assets.
- Given the competitive nature of securing and maintaining corporate and foundation support, it is critical to develop personal relationships between those who make funding decisions and your organization. Make sure your key professionals and your board are involved in this process!
- More large (raise more than $20 million annually) and medium (raise $1 million to $20 million annually) reported increases in giving than did small organizations. Small nonprofits have to work harder and invest more strategies to secure bigger gifts and increase annual contributions.
- Volunteers can be valuable assets. They demonstrate depth and connection to the community. Consider developing a volunteer program within your organization.
The Giving USA Foundation, the nonprofit arm of Giving USA (formerly the American Association of Fundraising Counsel), commissions and produces the annual Giving USA report. Robert Evans, Managing Director of EHL Consulting, is a member of the Foundation's Board.
