Charitable Giving Rises 6 Percent
To More Than $260 Billion In 2005
Disaster Relief Tops All Records; Totals 3% Of All Giving

Americans gave $260.28 billion to charity in 2005, according to numbers recently released in Giving USA, America's authoritative yearbook on charitable giving. The number represents growth of 6.1 percent (2.7 percent adjusted for inflation) over giving in 2004.

Last year saw extraordinary philanthropic response to three major natural disasters. About half of the $15 billion increase in total giving from the revised estimate of $245.22 billion in 2004 is attributable to disaster relief giving. The other half reflects donors’ commitments to other causes that matter to them.

The report, which was released June 19 by the Giving USA Foundation™, is researched and written by the Center on Philanthropy at Indiana University. Jeffrey Byrne & Associates is one of 38 member firms that belong to the Giving Institute: Leading Consultants to Non-Profits, which is the parent organization of the Giving USA Foundation.

Major natural disasters in the U.S. and abroad between December 2004 and October 2005 generated at least $7.37 billion in contributions (2.8 percent of total estimated giving) in 2005.

Of the disaster giving, individuals contributed an estimated $5.83 billion, or 79 percent of the estimated total in disaster relief contributions for 2005. Corporations gave an estimated $1.38 billion, or 19 percent of the estimated total of disaster relief giving. The balance of disaster relief giving, an estimated $160 million (or 2 percent of the estimated amount for disaster relief giving) based on records from the Foundation Center, was contributed by foundations in 2005.

“Disaster relief certainly played a role in 2005,” said JB&A President & CEO Jeffrey D. Byrne. “Relief contributions are estimated to be roughly 3 percent of the total. An additional $253 billion in gifts supported more than 1.4 million charities including religious congregations, schools, clinics, arts groups, food banks, and more.”

Giving By Source
Giving USA reports giving from four sources of contributions: individual (living) donors, bequests by deceased individuals, foundations and corporations.

Individual giving is always the largest single source of donations. It rose by 6.4 percent (2.9 percent adjusted for inflation) to an estimated $199.07 billion - accounting for 76.5 percent of all estimated giving in 2005.

One measure of charitable giving is giving as a percentage of income. Using the household as the economic level at which giving decisions are made, average charitable giving per household in 2005 is estimated to be 2.2 percent of average disposable (after-tax) income per household, matching exactly the 40-year average of 2.2 percent.

Charitable bequests are estimated to have fallen 5.5 percent in 2005, largely due to a steep decline in the number of deaths in 2004 and an expectation that the number of deaths for 2005 remained low. Estimated charitable bequests of $17.44 billion are 6.7 percent of total estimated charitable giving for 2005.

Foundation grantmaking rose 5.6 percent (2.1 percent adjusted for inflation) to $30 billion. The Foundation Center, which reported this information in April 2006, said the increase was because of growth in the number of foundations and because the stock market rose in 2004 and held steady in 2005. Foundation giving is 11.5 percent of total estimated charitable giving in 2005.

Corporate donations grew by an unprecedented 22.5 percent (18.5 percent adjusted for inflation), to reach an estimated $13.77 billion. At 5.3 percent of the total estimate for charitable gifts, corporations account for a slightly larger slice of the pie than the average of 5 percent given by corporations in the past 40 years.

“The high level of corporate giving is explained in part by two years of very strong growth in gross domestic product and by growth in corporate profits before taxes.” Byrne said. “It also shows companies’ exceptional response to disasters worldwide in 2005.”

Giving To Charitable Sectors

In addition to estimating giving by source of contribution, Giving USA surveys charitable organizations to find out how charitable gift receipts changed from one year to the next. The results for 2005 show a strong rate of growth in general, although some subsectors fared less well than others.

“Giving USA found that 59 percent of organizations reported an increase in charitable receipts in 2005. This is even before adding contributions for disaster relief,” said Eugene R. Tempel, executive director of the Center on Philanthropy at Indiana University. “The year 2005 saw the highest percentage of charitable organizations reporting growth since 2000 and the lowest percentage of charities reporting a drop in giving.”

Even with overall growth in charitable giving, some subsectors grew more than others. The arts, culture and humanities and the health sector saw inflation-adjusted giving decline in 2005. Both are subsectors that historically experience variations in giving with changes in economic conditions, the number of capital campaigns underway and with other causes. Arts giving, in particular, has shown dramatic swings, often connected with major donations or estate gifts. Except for the year 2003, giving for health care has shown inflation-adjusted declines or slow rates of growth since 2000.

Giving grew by more than 10 percent in the subsectors for human services, environment and animals, and international affairs. Human services charities reported an astounding 15 percent increase (11.3 percent adjusted for inflation) in charitable receipts before adding donations for disaster relief. This reverses a prior three-year decline in gifts to this subsector when inflation was taken into account. With disaster relief giving added, giving to human services rose by more than 32 percent, to $25.36 billion.

Environmental organizations and groups working for animal welfare saw giving rise 16.4 percent (12.6 percent adjusted for inflation). Growth in charitable receipts was reported by environment and animals organizations of all sizes, before adding any disaster-related gifts. With disaster relief giving included, this subsector reached $8.86 billion in contributions received.

In international affairs, there appears to have been some “crowding out,” so that organizations not directly engaged in disaster relief work saw their contributions fall. The net effect without disaster giving was a drop of 1.9 percent for international affairs organizations (down 5.1 percent adjusted for inflation). With disaster relief giving included, this subsector reported growth of
19.4 percent (15.6 percent adjusted for inflation) and gifts of $6.39 billion.

Giving In 2005 By Source Total: $260.28 Billion Corporations $13.77 billion 5.3% Foundations $30.0 billion 11.5% Bequests $17.44 billion 6.7% Individuals $199.07 billion 76.5%
2005 Giving To Disaster Relief Total: $7.37 Billion Corporations $1.38 billion 19% of disaster relief giving Foundations $160 million 2% of disaster relief giving Individuals $5.83 billion 79% of disaster relief giving