Monday, October 17, 2011

Charitable Giving

I woke up this morning—who can say what prompts one’s dreaming—wondering whatever happened to that, you know, the big, the prominent charitable organization, the one that I used to be proud to give to, at work—because, of course, every fall, there would be this big drum-beat and promotion and everybody renewed his or her subscription. I was halfway through my first cup of coffee before I had the name. The United Way. The United Way of America. My impression was that this organization—and if not the organization then its annual campaign—had virtually disappeared. In turn that then prompted me to have a look at charitable giving in the United States—and what it might look like in these sticky times.

The first pair of graphics shows the source of private philanthropic dollars. I show two pies, the first for 1990 and the second for 2009. These represent $101.4 and $308.8 billion dollars respectively. (Click to enlarge, Esc to return again.)

The notable change here is the shrinkage of individual contributions in this period from 80 percent to 75 percent of the total. Corporate giving has also shrunk. The slack has been taken up by foundations. Next, let’s look at how these moneys were allocated.

The big kid on the block is Religion. It tops all other recipients of voluntary giving—but notice its sudden down-ward slide in the Great Recession. I’ve singled out four other categories by type and prominently marked Human Services, the category under which United Way Falls. The bars shown, All Other, include (in order of importance) Public and Societal Benefit (where, for instance, contributions to PBS might fall), International Giving, and Environment. I’ve omitted foundation grants to individuals and the catch-all “Unallocated” category. The graphic thus accounts for 79 percent of the $309 billion we managed to produce in 2009.

Let me next show you an interesting chart graphing how the top ten organizations that provide Human Services fared in 2009. They are arranged in this graph in order of their size. United Way is at the top. All of these organizations live on cash contributions by the public, augmented by some amount of grant income. 2009 was a bad year, as we note. Six of the ten showed decreased contributions. The dramatic contrarian, with a 66 percent increase in contributions that year, was Catholic Charities USA.

Finally, here is a graphic that shows United Way’s own performance from 1999 through 2010. The Great Recession has had a painful impact on the leading charity that helps many, many local charities to stay in business. The down-turn in 2005 may well have been the result of a scandal that unfolded in 2004. United Way’s CEO for the Washington Branch was convicted of misuse of funds that year—and the news of that may have hurt the agency the following year. I’ve stitched this graphic together from multiple sources as shown last.

It’s instructive to look at charitable giving at times like these. What is the general situation out there? Well, incomes are declining. Not surprisingly, individual contributions are dropping as a share of total contributions. Income inequality is increasing. Public welfare funding is under pressure. Thus it is naïve to imagine that voluntary giving will take up the slack as public funding declines. Yet the absence of jobs, strained incomes, and the “jobless recovery” are all increasing the need for privately provided charitable services.

Data sources:
  • First three graphs: The 2012 Statistical Abstract (link); select Table 580.
  • Top 10 in 2009: The Chronicle of Higher Education (link); it cites the “go to” source for the data in this field, The Chronicle of Philanthropy.
  • United Way Private Income: Data for 2005-2010 are from AggData (link) which enables a download of a free Chronicle of Philanthropy data base. The 1999 data come from Funding Universe (link), the 2000 an d 2001 data from Chronicle of Philanthropy news stories, the 2004 data from Wikipedia (citing Chronicle of Philanthropy), and the missing years I extrapolated.

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