Giving by individuals declined in 2018 in the face of an increasingly complex tax and economic environment, according to the Giving USA 2019 report released Tuesday.
The philanthropic scene saw mixed results last year, with individual giving going down, overall giving remaining level, and corporation and foundation giving increasing. Gifts from individuals make up more than two-thirds of all giving, said the report, which was published by the Giving USA Foundation and researched by the Indiana University Lilly Family School of Philanthropy.
“Philanthropy reached record breaking levels in 2017 [in part because of the growth in stock market returns], but the climate for giving was more complex in 2018 due to new tax policies and increasing market volatility,” said Rick Dunham, chair of the Giving USA Foundation, during a press conference Tuesday.
Because of the doubling of the standard deduction for income tax purposes, fewer people itemized deductions in 2018, This does not necessarily affect the number of people who donate but can affect the amounts and the timing, explained Una Osili, associate dean for research and international programs at the Lily Family School of Philanthropy. More than 45 million households itemized deductions in 2016, but it is estimated that number dropped to between 16 million and 20 million in 2018, the report said.
The information compiled annually can be used by individuals, corporations and foundations to see how they compare to other donors, and by nonprofits to help hone their messages, noted Laura MacDonald, vice chair of the Giving USA Foundation. The most influential change that is now occurring is the adoption by charities of digital platforms to reach more potential donors and to maximize the return on investment, Dunham said.
In 2018, individual giving declined 1.1 percent to $292 billion. Total giving was virtually flat with a growth rate of 0.7 percent to bring it to $427.71 billion for the year. Giving by foundations increased by an estimated 7.3 percent to $75.86 billion. Giving by corporations increased by 5.4 percent to $20 billion.
“Giving by foundations represented 18 percent of all charitable dollars given in 2018—an unprecedented dollar amount and an unprecedented share of total giving. The strong growth in giving by foundations and in giving by corporations helped bolster total giving overall in 2018,” said Rachel Hutchisson, chair of The Giving Institute, a membership organization that promotes philanthropy. Giving USA is an Institute member.
The relatively strong economy during 2018 counteracted some of the downward push in giving. There was a 5 percent increase in disposable personal income and a 5.2 percent growth in the GDP. Giving by foundations and giving by corporations were buoyed by the strong run of the stock market in the past few years, the report said.
Individual sectors saw differing results for their fund raising drives last year. Some of the categories of charitable organizations that declined last year, including giving to education and giving to foundations, experienced strong growth in 2017. “It is not unusual for strong growth in giving one year to be followed by slower growth or a decline in the following year,” the report said.
Giving to organizations that impact the public sector decreased in 2018 after eight years of consecutive growth. Similarly, giving to religion declined in 2018 after six years of slow growth and one year of flat growth in 2017, according to the report. Giving to human services, health, and arts, culture and humanities organizations stayed relatively flat.