Study: Charitable giving drops little

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By Andrea Billups

The American spirit of giving to those in need hasn't taken much of a hit from the recession.

Despite what some have described as the toughest economic environment since the Great Depression, U.S. charitable giving in 2008 dropped just 2 percent from 2007, according to an annual survey of philanthropy from the Giving USA Foundation in Glenview, Ill.

Americans gave an estimated $307 billion to charities last year, down from 2007's figure of $314 billion, according to the foundation's report, Giving USA, a publication researched and written annually by the Center on Philanthropy at Indiana University.

The small decrease, however, is the first since 1987 and only the second drop since the foundation started its survey 54 years ago.

"This dramatically shows the generosity of the people of America," said George Ruotolo, a nonprofit-fundraising consultant who has served as chairman of the Giving Institute, which founded the Giving USA Foundation.

"I'm not happy that it went down a little bit, but if you could have the banking industry or the auto or the housing industry only going down 2 percent, they would say, 'Wow, that is just unbelievably good.' This shows what Americans are made of. This demonstrates the strength of our resolve," he said.

Charitable giving remains a strong part of the American culture, constituting 2.2 percent of the gross domestic product for 2008, down just slightly from 2.3 percent of the 2007 GDP, the foundation said.

But as much as our charitable nature remains strong, the need continues to rise because of the economic downturn, the study found. Donation decreases were reported by two-thirds of public charities in 2008, while 54 percent of human-service charities reported there was an increasing need for their services, with just 16 percent saying there was a decline in their needs.

Perhaps worse still, youth and children's charities were the most underfunded, with 74 percent of those surveyed noting that their current finances could not keep pace with current demand.

The survey found good news for religious organizations, which saw a 5.5 percent increase in giving for 2008. Congregations and other religious groups took in an estimated $106 billion, marking 35 percent of total giving in 2008.

"I think the reason religion does well during a recession is, people feel an immense connection to their houses of worship," Mr. Ruotolo said. "They realize that houses of worship cannot go to corporations or foundations for support. They have to rely on the generosity of members. There is that connection in faith and mission."

Foundations were not as lucky as faith organizations, with estimated contributions falling off 19.2 percent last year. Gifts to education organizations fell 5.5 percent, while corporate giving was off 4.5 percent. Gifts also declined to health organizations (6.5 percent), arts/culture/humanities groups (6.4 percent), and environmental/animal groups (5.5 percent). Charitable bequests also fell, 2.8 percent.

The research, conducted annually, is based on a random sample of human-service charities, of which 228 completed surveys for a response rate of 7.1 percent. Giving estimates are compiled by using tax data, government estimates of economic indicators and other data sources along with econometric modeling.

Despite the slight overall drop, nonprofit supporters remain optimistic about the 2008 results, noting that if financial markets improve in the third and fourth quarters like they have in the second, 2009 could well be a promising year for giving.

"It would have been easy to say 'not this year' when appeals came their way, and we definitely did see some belt-tightening," Del Martin, chairman of the Giving USA Foundation, said in a statement on the 2008 results. "What we find remarkable is that individuals, corporations and foundations still provided more than $307 billion to causes they support, despite the economic conditions ... It could have been a lot worse."