Though times were tough, charitable giving kept pace with inflation in '93

NONPROFITS INC.

August 15, 1994|By LESTER A. PICKER

Late each spring, a packet of material arrives on my desk from the American Association of Fund-Raising Councils (AAFRC) that details giving patterns among Americans for the previous calendar year. The 1993 statistics were encouraging.

Despite economic woes at home, Americans managed to keep their charitable giving in pace with inflation. Americans donated $126.22 billion to charity, an increase of 3.6 percent from 1992.

Giving by individuals, whether living or by bequests, accounted for 88 cents of every charitable dollar received by nonprofits. Giving by corporations remained the same as 1992, some $5.92 billion, although inflation eroded nearly 4 percent of those dollars.

It's also instructive to know that corporate giving as a percent of pre-tax profits fell from 1.5 percent to 1.3 percent on average, and far, far from the 5 percent to 10 percent giving levels of community-minded corporations such as Ben and Jerry's or Minnesota Mining and Manufacturing.

The small percentage of pre-tax profits that goes to charitable purposes needs to be placed in context, however, since 66TC business' charitable work may be in the form of noncash distributions such as employee volunteers or in-kind services.

Private foundations increased their giving by some 6.6 percent to $9.21 billion, part of that due to the phenomenal increase in private foundations in 1992-1993. Some two thousand new foundations joined the ranks of such notables as the Ford and Rockefeller foundations, and local players like the Abell Foundation.

Who receives the bulk of donated dollars? Religious institutions and programs received nearly half of all charitable moneys.

Next in line was education, which received about $15 billion, a 5.5 percent increase from 1992, followed by human services, which received $12.47 billion, up nearly 8 percent. Several highly publicized natural disasters may have contributed to the increase, according to the AAFRC.

I also believe that U.S. philanthropists are becoming increasingly sophisticated in their charitable giving. They recognize that nonprofits have a critical role to play in solving some of the more difficult social problems we face. By virtue of their stepping to the plate, human services nonprofits have benefited from their largess.

Health institutions garnered nearly $11 billion, up 5.7 percent, despite concern and confusion over health care reform.

Arts and cultural organizations received $9.57 billion, a misleading 2.6 percent increase, since inflation devoured that increase and actually left a hole for these cash-starved institutions. However, recent reports indicate that a surge in year-end giving of appreciated property, due to a change in tax laws, was extremely beneficial to museums and other cultural institutions. Conversations with colleagues at major national nonprofits and cultural institutions confirms this.

Another grouping to take a hit in constant dollar terms was environmental organizations, whose $3.19 billion represented a 1.7 percent decrease. Environmental group development officers I contacted tell me that it was hard this past year to compete for dollars with the many natural and people-caused disasters worldwide.

One figure that I personally find fascinating is the significant increase in giving to international affairs. The $1.86 billion given to these charities in 1993 represents a non-inflation-adjusted 8.5 percent increase.

Right now, with the resurgence of democratic reforms in eastern Europe and elsewhere, nonprofits are carving out a critical role for themselves, much of it modeled on their American cousins. They also have been able to forge alliances that have resulted in increased giving to their causes by Americans. This significant increase caught many by surprise, but not all.

Locally, the Johns Hopkins Institute for Policy Studies, led by Dr. Lester Salamon, has been on the forefront of this global expansion of philanthropy, offering internship programs, seminars, workshops and training programs, all built on a foundation of top-notch research.

Seeing firsthand how thirsty the international nonprofit community is for knowledge on how to be more effective, the increased giving by Americans to that community must come as no surprise to faculty and staff of the institute.

Copies of the 39th edition of Giving USA: 1994 can be ordered by calling the AAFRC at (212) 354-5799. Single copies are $45. Slides and overheads also are available.

Les Picker is a philanthropy consultant. Write to him at The Brokerage, 34 Market Place, Suite 331, Baltimore 21202; (410) 783-5100.

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