Charitable giving picks up despite rocky economy

After pulling back from charitable giving for two years, Americans were slightly more generous in 2010—donating an estimated $290.9 billion, according to a national study released Monday.

The estimate was 2 percent higher in inflation-adjusted dollars than the previous year, when individuals, corporations and foundations gave $280.3 billion, according to the Giving USA Foundation, based in Chicago. The Center on Philanthropy at Indiana University produces the annual estimate as Giving USA's research partner.

"Our revised estimates show that 2008 and 2009 saw the largest drops in giving in more than 40 years as a result of the Great Recession," said Edith Falk, chairwoman of the Giving USA Foundation. "Despite the fragile economic recovery, though, Americans continued—and even increased—their support of organizations and causes that matter to them in 2010."

Charitable giving fell 13 percent over the two worst years of the recession, so the increase last year was not nearly enough to pull the not-for-profit sector out of the doldrums.

"The sobering reality is that many nonprofits are still hurting, and if giving continues to grow at that rate, it will take five to six more years just to return to the level of giving we saw before the Great Recession," said Patrick Rooney, executive director of the Center on Philanthropy. 

Charities that deal first-hand with the ill effects of a poor economy are the ones hurting most. Giving USA estimates that giving to human-service organizations declined 1.5 percent to $26.5 billion. A significant chunk of that, $1.4 billion, was ultimately sent to Haiti for earthquake relief.

Religion, which rakes in a 35-percent share of all philanthropy, saw gifts decline by less than 1 percent to $100.6 billion.

Meanwhile, these sectors saw modest and even big improvements on an inflation-adjusted basis:

— Arts, up 4.1 percent to $13.3 billion.

— International causes, up 13.5 percent to $15.8 billion.

— Education, up 3.5 percent to $41.7 billion.

— Foundations, up 11 percent to $33 billion.

— Public-benefit societies (including United Way and donor-advised funds), up 4.5 percent to $24.2 billion.

The uneven recovery in giving might have something to do with the fact that large institutions, such as universities and museums, are more sophisticated in fundraising, Center on Philanthropy research director Una Osilli said.

Wealthy Americans shifted their giving in 2009 to human services, according to a separate survey of high-net worth households. Last year, they might have gone back to causes that they traditionally support, such as arts and education, as the recession stopped dominating headlines, Osilli said.

Giving USA's annual study came under fire last year. The organization initially estimated that charitable giving had increased in 2009, despite high unemployment and many charities' continued struggle to raise money. The Center on Philanthropy tweaked its model for this year's report. Spokeswoman Adriene Davis said the center periodically reviews its model and did so to account for the worst recession in 70 years.

The model, which crunches IRS, economic and other data, now includes personal consumption—a data that set accounts for all spending, making it a better indicator of philanthropic activity than personal income during an extreme downturn, Davis said.