Topics
Regions
Resources
- MIT Poverty Action Lab
- Innovations for Poverty Action
- Development Research Institute
- Aid Watch
- Passport: Foreign Policy's Weblog
- UNDP Human Development Reports
- Philanthropy 2173
- Stanford Social Innovation Review
- Alliance Magazine
- Chronicle of Philanthropy
- It's Your World -- Global Philanthropy Forum
- The GiveWell Project
- Tactical Philanthropy
- New Dominion Philanthropy Metrics
- Reuters AlertNet
- AllTop Non-Profit Blogs
News & Commentary
Archive
Jun 10, 2009
The Annual Dance around GivingUSA
Today GivingUSA announced its annual tally of philanthropic giving in the United States (in this case covering 2008). The numbers this year unsurprisingly show a roughly 6 percent decline in giving in 2008. The commentary is generally following the usual pattern: Some are pointing to the biggest decline in giving in nearly 50 years as proof that the sky really is falling for many non-profits. Others are painting the numbers in a positive light noting that the 6 percent decline is far less than the fall in net worth of individuals, foundations and corporations and that the total figure for philanthropic giving still exceeded $300 billion (2007 is the only other year to pass the $300 billion mark).
Indeed one can read the numbers however one is predisposed to, but it bears repeating several points about how these numbers are generated before taking either the positive or negative interpretations to heart:
* The numbers are estimates. The best estimates currently available but estimates none-the-less. It is therefore entirely plausible that there is +/- 6 percent of error in the estimates, particularly in an era where the forms and norms of giving are rapidly changing. It is possible that the estimates missed enough giving to close the apparent gap between 2008 and 2007.
* (Ed. Note: See Correction Below in Comments) The numbers include pledges, not just actual funds transferred. Given that there is lots of anecdotal evidence of pledges being revoked, scaled back or defaulted on, the decline in giving could easily be twice or three times as large as estimated once the dust settles.
* The most surprising, and frankly frightening, data point is that giving for basic human needs (food, shelter, jobs charities) fell three times more than the average decline. That flies in the face of conventional wisdom about how givers react to tough times (see for instance, the comments of United Way CEO Brian Gallagher from our interview with him last summer.)
* In the end, there is certainly reason for caution in believing that actual giving has changed much: annual giving by Americans, when adjusted for inflation and economic growth (or decline, as the case may be) has been essentially flat for the 50 years or so that we have data. Therefore, we should demand a lot more evidence than just preliminary estimates before we believe that a trend that has held for several generations has changed.
Comments
Dear Mr. Ogden,
Thank you for writing about our annual report on charitable giving in America, “Giving USA,“ which is published by Giving USA Foundation in Glenview, Ill. and researched and written by the Center on Philanthropy at Indiana University. We have been reporting on philanthropy for more than 50 years, and certainly appreciate the perspective you and your organization bring to the table in these post-modern times.
On behalf of the Foundation, I would like to make a couple of corrections to your post, please. Our estimates do not include pledges; they include only actual gifts that have been made. Also, it’s correct to say that we revise our estimates; that has always been the case—we revise estimates as new data become available, just like other groups do; however, to say that the swing could be 6 percent is not historically accurate. Since 2001, on average – and excepting 2005 when we didn’t try to measure KETRA—Giving USA total giving has been adjusted 3 percent.
Finally, and we believe this to be a difference of perception, one of your bullet points states that giving has “essentially held flat for 50 years.“ As a share of GDP, yes, that is roughly true. However, in dollar terms, in per-household terms, and in other measures, it has risen markedly over time.
Thank you for your consideration of our comments to your post, and best wishes for much success in your group’s mission.
Sincerely,
Del Martin, Chair
June 16, 2009Giving USA Foundation
Thanks to Del Martin for the corrections. A few notes:
1) Inclusion of Pledges: this is certainly an error on our part. So many of the philanthropy counts include pledges that I made an assumption rather than going back to consult GivingUSA’s excellent documentation on their methodology. It would be great if other number-generators in the philanthropy space shared as much as GivingUSA does about how they produce their numbers.
2) On the estimate question, my point was not that these are not the final numbers and subject to revision—it is that GivingUSA’s numbers, even in final form, are estimates. Again they are the best estimates that are currently available and I’m not suggesting that GivingUSA does anything other than a commendable job creating the best estimates possible, but there is no way of actually determining the real figures. My point is that given how much has changed and is changing in the modes and mechanisms of giving, it is plausible that the GivingUSA methodology simply misses some giving, and I believe it to be plausible that it misses 5% of the total.
3) There is a difference of opinion on the point of whether giving has increased. I believe the only valid measure of an “increase in giving” is on a percentage basis relative to income. That does not take away from the fact that Americans are very generous in relation to other countries, but it also means that Americans generosity has not increased, (nor decreased) over time.
June 25, 2009