2009 Household Charitable Giving Down Five Percent from 2008
Individual charitable giving in 2009 amounted to $217.3 billion, a decline of $11.2 billion or 4.9 percent from the estimated $228.5 billion total in 2008, according to a report by researchers at the Center on Wealth and Philanthropy at Boston College and published by the Association of Fundraising Professionals. This five percent decline is in addition to the six percent decline that the Center calculated in 2008.
For 2010, the researchers project annualized individual giving totals (also known as household giving) will range between approximately $222 billion and $227 billion, an increase between 3 to 4.5 percent over the estimated total for 2009. The projected growth is based on analysis of the first two quarters according to scenarios that assume relatively low and high economic growth.
The full report will be published in the July/August 2010 issue of Advancing Philanthropy. The report's findings are based on estimates produced quarterly by the Individual Giving Model developed and housed at the Center on Wealth and Philanthropy, designed to estimate future and real-time charitable giving by households on a quarterly basis.
The Individual Giving Model estimates how the most recent changes in financial resources affect the aggregate level of household giving which excludes charitable giving from foundations, corporations, or bequests from estates. The IGM is designed to be calibrated annually and modified every three months, based on data that are released quarterly or more frequently, such as price and market indices, along with components of income and worth.
Launched last year, the IGM was constructed by CWP Senior Research Associate John J. Havens and Director Paul G. Schervish to provide more current and potentially more accurate indicators of how charitable giving is progressing on a national basis. This is especially useful for charities and other fundraisers, which previously had to rely on annual estimates. This is the second estimate report issued based on the IGM.
For the new report, Schervish and Havens expanded and recalibrated the IGM based on information available as of April 14, 2010. The findings are based on data from the Federal Reserve, the Bureau of Economic Analysis, the Bureau of Labor Statistics, the National Associations of Realtors, Standard and Poor's, Dow-Jones, and a variety of other sources of data in the public domain.
"The Individual Giving Model is still in the development and testing stage but we believe the model's estimates nevertheless provide near real-time guidance concerning the state of individual charitable giving," said Havens.
"We're very optimistic about the growth in charitable giving in 2010 predicted by the Individual Giving Model," said Paulette V. Maehara, CFRE, CAE, president and CEO of AFP. "The research developed by the Boston College Center on Wealth and Philanthropy certainly corresponds with what fundraisers experienced last year and what we're seeing so far in 2010."
"2010 may just turn out to be the beginning of good news for fundraisers and charities. But it may not be until 2011 that we see the amount of individual giving returning to its pre-recession purchasing power," said Schervish.
As Havens explained, "Our IGM shows that individual giving declined in real purchasing power an additional five percent in 2009 over and above the six percent loss in 2008. So it will be some time before we can reverse these declines. Fortunately, charitable giving in the first two quarters of 2010 seems to be on an uptick. However, growth may not continue the rest of the year if the fiscal crisis in Europe brings a second recessionary dip to the United States."