Wednesday, January 23, 2013

2012 Total Giving to Nonprofits Grew 6.7%

Photo courtesy of TaxCredit

Environmental Causes Led All Sectors, Growing by 11% in 2012

DALLAS, Texas (January 23, 2013)—Atlas of Giving today announced total giving to nonprofits rose 6.7% in 2012, an increase of $23.32 billion over 2011. According to a report released today by The Atlas of Giving, giving to environmental causes grew by 11% in 2012, more than any other portion of the U.S. charitable economy.

“Overall, 2012 was a very solid year for giving,” Rob Mitchell, CEO of The Atlas of Giving, said. “Robust stock market performance, an improving economy, and a few very large individual contributions were significant factors.”
Gifts to the education sector increased by 8.8%, as did disaster-related giving, the latter fueled in large part by donations in the aftermath of super-storm Sandy, which wreaked havoc on portions of the U.S. east coast in late October.
Meanwhile giving to religion, the long dominant charitable sector, saw continued erosion of its share of the national giving pie. As recently as 2002, religious giving accounted for over 50% of all charitable donations. By contrast, giving to religion accounted for just 35% of the 2012 total. 
Overall giving was buoyed by economic factors beyond the financial markets. Home sales hit a five year peak in 2012, and home prices appeared to be on the rise as the rate of foreclosures fell. Real GDP also experienced accelerated growth.
Still, Mitchell cites continued high unemployment as a persistent detriment to giving for many Americans, a dynamic which does not impact all charities equally.
“The manner in which a given nonprofit raises money has everything to do with what effect unemployment has on gift receipts,” Mitchell, said. “Organizations that rely on large numbers of relatively small gifts from individuals are hit the hardest when unemployment is high.”   
2012 saw the announcement of several “mega-gifts” by individuals. Mitchell believes that a concern over possible elimination or diminishment of the charitable income tax deduction was motivational for these and many other gifts from wealthy individuals in 2012. Some of these “mega-gifts” included:
•    $3 billion given by Omaha investor Warren Buffet to charitable foundations operated by each of his three children
•    $499 million donated by Facebook CEO Mark Zuckerberg to Silicon valley Community Foundation
•    $300 million pledged by Microsoft co-founder Paul Allen to his Allen Institute for Brain Science
•    $200 million given to Columbia University’s Mind Brain Behavior Institute by billionaire publisher and real estate tycoon Mortimer Zuckerman

Looking ahead to 2013, the picture is expected to be dramatically less rosy. The Atlas of Giving 2013 giving forecast calls for only modest growth of 1.6%, one of the slowest growth rates in 50 years. Expected declines in stock market returns, coupled with a 2% across the board hike in the payroll tax will hamper growth.  An elimination or reduction of the charitable deduction would most certainly have an even greater negative impact on giving.
“The stock market and growing GDP is primarily what made 2012 a reasonably good year for many nonprofits. Our analysis tells us that forecasted drops in the investment markets will produce corresponding drops in giving,” Mitchell said.  “At the same time, the drop in discretionary income resulting from the 2% payroll tax hike will be a factor in individual and family giving decisions.”  
The Atlas forecast is the only one of its kind in the nonprofit world, providing an informed 12-month projection on charitable giving. Details are available at www.atlasofgiving.com.


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