Americans' Charitable Giving in 2018 Was Virtually Flat

News June 19, 2019 at 02:22 PM
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American individuals, corporations, foundations and bequests donated some $427.7 billion to U.S. charities in 2018, according to Giving USA 2019: The Annual Report on Philanthropy for the Year 2018.

Total charitable giving rose by 0.7% measured in current dollars year over year. Adjusted for inflation, total giving declined by 1.7%.

The report was researched and written by the Indiana University Lilly Family School of Philanthropy.

"After reaching record-breaking levels of giving in 2017, American individuals and organizations continued their generous support of charitable institutions in 2018," Rick Dunham, chair of Giving USA Foundation and chief executive of Dunham + Co.

"However, the environment for giving in 2018 was far more complex than most years, with shifts in tax policy and the volatility of the stock market. This is particularly true for the wide range of households that comprise individual giving and provide over two-thirds of all giving."

Several competing factors in the economic and public policy environments last year may have shifted some previous giving patterns, according to the report. Economic variables that shape giving, such as personal income, had relatively strong growth, while the fourth-quarter stock market decline may have had a dampening effect.

The policy environment also likely influenced some donors' behavior in 2018, the report said. The federal tax overhaul that doubled the standard deduction resulted in a drop in the number of individuals and households that itemize various types of deductions on their tax returns.

Whereas more than 45 million households itemized deductions in 2016, that number may have dropped to 16 million to 20 million households in 2018, reducing an incentive for charitable giving.

"Growth in total giving was virtually flat," Amir Pasic, the Eugene R. Tempel Dean of the Lilly Family School of Philanthropy, said in the statement. "Contributions from individuals and their bequests were not as strong as in 2017, while giving by foundations and corporations experienced healthy growth."

Pasic noted, however that charitable giving is multidimensional, and it is hard to disentangle the degree to which each factor may have affected donations.

Donors and Recipients

Giving by foundations set a record in 2018, reaching its highest-ever dollar amount even when adjusted for inflation, $75.9 billion, and growing to its largest share of total giving to date, 18%.

Individual giving decreased as a percentage of total giving to 68%, down two points from 2017, despite achieving its third-highest total dollar amount on record, adjusted for inflation, $292 billion.

Giving by corporations increased by 5.4% last year to $20 billion — an inflation-adjusted increase of 2.9%. The report noted that this giving is highly responsive to changes in corporate pretax dollars and GDP, and its year-over-year trend lines tend to be more turbulent as a result.

Bequests to charity totaled an estimated $39.7 billion in 2018, a 0.0% increase from 2017 — down by 2.3%, adjusted for inflation.

Charitable sectors experienced uneven growth in current dollars last year, with two recipient categories growing, three staying relatively flat and four declining. The reported noted that it is not unusual for strong growth in giving one year to be followed by slower growth or a decline the following year, especially in terms of inflation-adjusted dollars.

Here's how charitable sectors fared last year:

  • Religion: $124.5 billion, -1.5% (inflation-adjusted -3.9%)
  • Education: $58.7 billion, -1.3% (inflation-adjusted -3.7%)
  • Human services: $51.5 billion, flat (inflation-adjusted -2.7%)
  • Foundations: $50.3 billion, -6.9% -inflation-adjusted -9.1%)
  • Health: $40.8 billion, flat (inflation adjusted -2.3%)
  • Public-society benefit: $31 billion, -3.7% (inflation-adjusted -6%)
  • Arts, culture, humanities: $19.5 billion, flat (inflation-adjusted -2.1%)
  • International affairs: $22.9 billion, +9.6% (inflation-adjusted +7%)
  • Environment, animal groups: $12.7 billion, +3.6% (inflation-adjusted +1.2%)

In addition, giving to individuals, just 2% of total giving, decreased by an estimated 2.6% (4.9% in inflation-adjusted dollars) in 2018, to $9.1 billion. The report said most of these donations are in-kind gifts of medications to patients in need, made through the patient assistance programs of pharmaceutical companies' operating foundations.

Unallocated giving totaled $6.5 billion in 2018. According to the report, this amount can be considered the difference between giving by source and use in a particular year.

It includes the difference between itemized deductions by individuals and households carried over from previous years. The tax year in which a gift is claimed by the donor, i.e., carried over, and the year when the recipient organization reports it as revenue, the year in which it is received, may be different.

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