Americans' charitable giving will increase by 3.6% this year and by 3.8% in 2018, according to a report released Thursday by Indiana University's Lilly Family School of Philanthropy and Marts & Lundy, a consultancy.
The report predicts that changes in total giving for the years 2017 and 2018 will exceed the most recent 10-year annualized average increase in giving of 0.5%, but will fall short of the most recent 25-year and 40-year annualized averages.
In general, it said, increases in the U.S. economy, as reflected in the value of stocks, GDP and household income, will lead to the near-term rise in philanthropic giving.
"The projections of The Philanthropy Outlook point to some dramatic changes in American philanthropy," John Cash, chair of the Marts & Lundy board of directors, said in a statement. "Contributions to donor-advised funds and to family foundations continue to grow significantly, leaving enormous amounts of charitable dollars waiting for future distribution."
Cash said these donors were looking for meaningful relationships with nonprofits and the kinds of inspirational ideas that would fulfill their philanthropic aspirations.
"While the outlook is certainly good, the need for vigorous and meaningful engagement on the part of recipient organizations has never been greater," he said.
Projected Growth by Source
Giving by foundations will lead increases in both 2017, 5.9%, and 2018, 6%. Average to above-average growth in preceding years' S&P 500 and GDP will most significantly influence the increases, the report said.
Estate giving is expected to increase by 5.4% this year and 5.2% next year, with close-to-average growth in household and nonprofit net worth in preceding years and growth in the S&P 500 being the chief contributing factors.
Individuals and households will raise their giving levels by 3% this year and by 3.2% in 2018, owing mainly to these factors:
- Average to above-average growth in personal income
- Close-to-average growth in household and nonprofit net worth
- An increase in the number of households that itemize deductions on their taxes
Corporate giving will lag behind the other philanthropic sources, rising by just 2.4% and 2.7% this year and next. The majority of this increase will be influenced by average growth in GDP and above-average growth in corporate saving.
"As we consider the outlook for 2017 and 2018, it's important to note that individuals continue to play a leading role in driving both giving trends and growth in giving," the Lilly School's director of research Una Osili said in the statement.
