U.S. charitable giving increased 4% last year to $298.42 billion, which paints a good picture for the future of philanthropy, according to an expert in the field.

Although charitable giving remained flat in 2011 on an inflation-adjusted basis, Eileen Heisman, president of the National Philanthropic Trust in Jenkintown, Pa., was encouraged by the increase in raw dollars. She feels giving will hold its own or increase in the next few years.

The trust's Giving USA Report on Philanthropy was released Wednesday. It showed that giving was up in all categories except religion and foundations. Increases were particularly marked in the international and education categories.

"This report shows how embedded charitable giving is in the American psyche, particularly among the high-net-worth individuals," Heisman said. "Philanthropic giving remains healthy, even in the down economy we are in, and charitable giving is not going to go away."

The report did not break down giving by the donor's economic status, but Heisman said she works with many high-net-worth individuals where philanthropic giving is still an important part of their lives.

Giving by individuals rose 3.9% in 2011, accounting for 73% of the philanthropy in the nation, with a total of $217.79 billion in contributions.

"Various economic indicators point to the increased confidence that individuals had in their financial future in 2011, providing [an] explanation for the boost in giving by individuals," the report said.

Bequests from estates were particularly significant, increasing by 12.2%, although it was only a small part of the total at $24.41 billion.

Giving by foundations was up 1.8%, but when adjusted for inflation that actually represented a decline, and giving by corporations and corporation foundations held steady in real numbers at a 0.1% decline. Where the money went seems to be changing, according to the report. Giving to education was up by 4% over the previous year.

"I think people still believe in the American dream-that you can rise through the economic strata by having access to education, and that is reflected in their giving," Heisman said. "That philosophy reflects the heart and soul of society."

Giving to foundations is down dramatically, 6.1%, but Heisman said that is made up for by increased giving to donor-advised funds. Donor-advised funds are included in the category of giving to public-society benefit organizations, which was up 4%. But bthe three largest donor-advised fund administrators, Fidelity Charitable Gift Fund, Schwab Charitable Fund and Vanguard Charitable Endowment Program, saw growth of 77%.

Donations were up 2.7% for health organizations and 2.5% to human services charities, but both categories saw declines on an inflation-adjusted basis.

Contributions to individuals were up 9%, represented mostly by in-kind gifts of medications through the patient assistance programs of the pharmaceutical companies. Likewise, a significant increase was seen in giving to international affairs, which was at $22.7 billion, a 7.6% increase. International affairs saw the biggest increase when 2010 and 2011 were combined, with15.2% growth.

"There are a lot of American charities that are internationally oriented and people are more aware than ever of international needs because they hear more about it over the Internet, social media and television today than ever before," said Heisman. Much of this giving is done through the Internet, which has made contributing easier. "Generation X and younger are very comfortable with that."

She also noted 4.6% increases in giving to environmental and animal organizations. Arts, culture and the humanities also received some of the largesse with an increase of 4.1%.

Giving to religion is down by 1.7%, but Heisman said that was made up for in other types of giving. "Americans are very spiritual, they are just not tied to particular religions any more. They look to the human needs and give to the soup kitchen, human services organization or local hospital instead," she said.

The total change in giving for the past two years represents an increase of 7.1%, or 2.2% when adjusted for inflation, according to the report.

Total charitable giving has increased in current dollars in every year since 1971, with the exception of 1987, 2008 and 2009, according to the report. The average rate of change in total giving in current dollars since 1971 is 6.8%. Total giving has not reached that rate of change since 2005, when total giving rose 9.6 percent.

Charitable giving "is going to survive this latest economic downturn and will recover. The report is certainly not bad news; it is good news," Heisman said.

"America's charities have been traveling down a very rocky road in recent years, as evidenced by the data in our annual estimates and reports from those working in the field," said Jim Yunker, chair of Giving USA Foundation. "Our board members are cognizant of that reality but also see a bright spot-charitable giving, like other spending categories in the average American household budget, seems to be climbing out of the trough that resulted from the Great Recession."

-Karen DeMasters