News & Views

Is charity alive and well in America? Apparently so, according to a just-released report indicating that charitable giving is definitely on the rise.

Despite the economic recession, political crises and war overseas, Americans made charitable gifts totaling $240.72 billion last year, a 2.8% increase over 2002. So says Giving USA 2004, the well-respected annual study of philanthropy published by the Trust for Philanthropy of the American Association of Fundraising Counsel.

Looking back, donations reached 2% of the gross domestic product in 1998, after more than two decades of decline. In 2000, a new high of 2.3% was achieved; the rate for 2003 dipped to 2.2%.


Many factors influence fluctuations in giving. EHL Consulting took a closer look at these findings to help our readers understand why such trends occur:

• Bequests were a major factor. Rising by 12.8% in 2003 (10.3% when adjusted for inflation), bequests contributed significantly to last year's upward trend. As household net worth climbed, so did the value of bequests. And 2003 saw the distribution of assets from some very sizeable estates.
• Individual giving increased approximately 2.5% in 2003, as compared to 1.5% in 2002. That swing represents the highest growth rate since 2000.
• The surge in bequests and individual gifts compensated for lower donations from foundations and corporations. Foundation giving fell two years in a row, by 0.9% in '02 and by 2.5% in '03. While corporate philanthropy grew by 10.8% in 2002, last year the rate dropped to 4.2%.

Statistically, every non-profit sector -- except educational organizations -- enjoyed increased giving in 2003.

• International affairs groups saw the largest growth at 14.8%.
• Health institutions followed with a 10.7% growth following a 2.3% drop in '02.
• Public-society benefit organizations enjoyed 4.6% growth after a year of decline.
• Arts, culture and humanities were buoyed by the largest increase since 1996, 7.3%.
• Human services began to recover from a 9.9% drop in 2002 with a 1.3% gain.
• Environment/animal organizations reported an overall 5.4% increase in contributions.
• Educational organizations declined for the second year, down 0.5% in 2002 and 0.8% in 2003.

At EHL Consulting, we find the news to be very positive. The economy seems to be recovering, and Americans continue to demonstrate their benevolence. Out of all 2003 gifts, 74.5% came from individual donors. Counting bequests, individuals make up nearly 85% of total giving.

And we believe that this philanthropic statement sends a strong message that people still care about helping others. For our clients, this report has direct implications for developing winning strategies and approaches for the balance of this year and throughout 2005. And we can help make that happen for you.