Today, June 20, 2011, the latest Giving USA numbers were released by the Giving USA Foundation estimating the giving for 2010 based on the recently released actual numbers for 2008 to include their re-revised numbers for 2009. In past years the revised numbers were usually revised upward. Due to the recession that began in late 2007 and carried through 2008 and 2009, the revision was downward and has created a little (or a lot of) angst among some in the nonprofit community.
My opinion is that the numbers are the numbers. The Giving USA Foundation has a great research partner in the Center on Philanthropy at the University of Indiana. Their methodologies have stood the test of time and are reviewed by a methodology committee comprised of significant leaders in the nonprofit sector. So surprise, surprise – giving was down during the recession. And unfortunately it was down more than we expected.
There is other more important news as well. During 2010 contributions exceeded $290 billion and that is an increase of more than 3% in current dollars and a little less than 3% in inflationary dollars over 2009 (which dropped from 2008). During times of slow growth people keep giving away money! This does not make sense. One would think that people would hold back on their giving until we witnessed more robust growth – more sustained growth – more evidence that growth was going to stay around for a while. That is not the case. As the recession ended in 2010 the facts indicate that giving increased once again – modestly yes, but an increase nonetheless.
Several other economic statistics are important here: first, the savings rate continues to be high as people around the country are putting more than 5% of their income (on average) in savings. The 5% mark has been exceeded for the past 10 quarters. Prior to 2008, the savings rate averaged less than 2%; second, Americans are spending, on an annual basis, $1 billion less on mortgage payments now than they did a year ago. There are two reasons for this: one, many have refinanced to a lower mortgage rate as interest levels have dropped; two, others have seen house foreclosures and are now renting at a cheaper rate. What this means is that Americans have $1 billion more in funds to spend on other things – including contributions. Finally, there is $2.7 trillion (yes, trillion) in money market funds earning only .2% in interest. This does not count funds in checking accounts, regular savings accounts, or short term certificates of deposit. As the saying goes, this is a lot of cash “sitting on the sidelines.”
Though the economic recovery is very slow, and people are saving more than ever, they still have plenty of resources to respond to the needs in our communities – needs that are being met by quality nonprofit organizations. And the good news about the 2010 Giving USA numbers is that they are doing just that.
What has been your experience during the past year? Are contributions up for your organization? What trends do you see? How are your donors responding to the needs you are seeking to meet? Write and let us know.
All the best,
Tom
P.S. Here are some interesting stories on the Giving USA numbers from USA Today, the Associated Press, AFP, and the Wall Street Journal.