25 Apr Finance: Charitable Giving …
It is not known yet if these numbers will hold for 2018 until later this year when tax filings have been completed. However, taking a brief look back, here’s how Americans gave.
Giving exceeded $400 billion in a single year for the first time, increasing 5.2 percent (3.0 percent adjusted for inflation) over the revised total of $389.64 contributed in 2016.
“Americans’ record-breaking charitable giving in 2017 demonstrates that even in divisive times our commitment to philanthropy is solid. As people have more resources available, they are choosing to use them to make a difference, pushing giving over $400 billion,” said Aggie Sweeney, CFRE, chair of Giving USA Foundation, and senior counsel at Campbell & Company.
“Contributions went up nearly across the board, signaling that Americans seem to be giving according to their beliefs and interests, which are diverse and wide-ranging.”
Giving from all four sources and giving to all but one of the major types of recipient organizations grew driven by economic conditions. Even though policy developments may have played some role in charitable giving, most of the effects of the tax policy changes adopted in late December 2017 likely affected giving in 2018 and beyond.
“The increase in giving in 2017 was generated in part by increases in the stock market, as evidenced by the nearly 20 percent growth in the S&P 500. Investment returns funded multiple very large gifts, most of which were given by individuals to their foundations, including two gifts of $1 billion or more,” said Amir Pasic, Ph.D., the Eugene R. Tempel dean of the Lilly Family School of Philanthropy.
“This tells us that some of our most fortunate citizens are using their wealth to make some significant contributions to the common good.”
In addition to the S&P 500, other economic factors, such as personal income and personal consumption, are associated with households’ long-term financial stability and have historically been correlated with giving by individuals.
Highlights About Charitable Giving by Source
• Giving by individuals represented 70 percent of total giving. • Giving by foundations has seen strong growth for the past seven years, according to data provided by the Foundation Center. Its five-year annualized average growth rate of 7.6 percent far exceeds the 4.3 percent annualized average growth rate for total giving. • Corporate giving was boosted by $405 million in contributions for relief related to natural and manmade disasters.
“Donors and funders are becoming ever more sophisticated in their approaches to making gifts as they draw on the increasing availability of new data, new technology, and new ideas,” said Rachel Hutchisson, chair of The Giving Institute, and vice president of corporate citizenship and philanthropy for Blackbaud.
“We are seeing innovations across the philanthropic sector that are contributing to strong growth in giving, which benefits everyone.”
“Giving to nearly all categories of charities experienced significant growth, and giving to foundations achieved a double-digit growth rate,” said Una Osili, Ph.D., associate dean for research and international programs at the Indiana University Lilly Family School of Philanthropy.
“Economic growth contributed to these widespread increases in 2017, and there is heightened interest in the overall economic environment and other factors that can help nonprofits sustain this growth over time.”
Top Categories for Charitable Giving to Recipients
In order of amounts of giving, here are some of the most often recipients of charitable giving: religion, education, human services, foundations, health organizations, public-society benefit organizations, arts, culture and humanities, international affairs, environment, and animal organizations.
Looking for Ways to Give?
John Hagensen, Keystone Wealth Partners, has these tips…
How to Make Philanthropy Fit Into Your Financial Plans
One of the universal truths is that, although money can help meet your needs and provide you with the basic necessities of life, it can’t make you happy.
However, it can be a powerful weapon of self-satisfaction when used the right way—such as through philanthropic endeavors. And since April 15 is around the corner, it’s a good time to contemplate how you can integrate charitable giving into your tax-planning strategies.
“Money can be an incredible tool when you align it with your values,” says John Hagensen, founder and managing director of Keystone Wealth Partners. “It enables you to feel a sense of contentment that your money is working hard for you to help you accomplish goals that match your values.”
And if you value giving back to others—to your community, to your favorite cause, or to planet Earth—then money will enable you to accomplish that goal.
But as you look at your budget for 2019, you might not know where the money will come from to give to your favorite charity or cause. The answer is that it is probably sitting right underneath your nose, Hagensen says. But it will take discipline to find it.
Hagensen practices what he preaches; his company Keystone Wealth Partners has made a commitment to donate up to $10,000 to help create clean-water projects in Africa. That aligns with his values because he adopted two children from Ethiopia and wanted to give something back to their native homeland.
Hagensen has three tips for those who want to give to their favorite charities in 2019 but aren’t sure where the money will come from…
1. Write Down Your Values
Spend a few minutes to really examine what is important to you. Make sure all your monetary decisions support your values. If you have older children, include them in the discussion so you can create a teachable moment for them.
2. Write Down Your Long-Term and Short-Term Goals
Compare those goals to how you are spending your money.
3. Spend Intentionally
If you value traveling, then cut down your expenses at home so you can travel more. Align your expenses with what you value in life and your wants and needs.
Cut Out All the Expenses That Don’t Align With Your Values
There is no one-size-fits-all when it comes to what’s important to people. Most people think that a house is a necessity, but some people would rather live in a tent and travel all the time than own a home. It just depends on what you value, so make the most of your money.
“It usually does not take a major financial overhaul to give more to philanthropic causes,” Hagensen says. “It just takes a consistent approach that aligns with your values.”