Americans last year gave the second-highest amount of donations in history and corporations increased their charitable giving by more than 13% over the previous year, thanks partly to tax breaks and a strong economy, according to a report on philanthropy.
In 2019, individual Americans gave $309.66 billion to nonprofits, and corporations donated $21.09 billion, according to an estimate in the annual report from Giving USA. However, the study found that while overall donations have risen to a total of $449.64 billion, the number of people making donations has fallen continuously since the Great Recession, which started in 2008.
Researchers at the Indiana University Lilly Family School of Philanthropy who compiled the study attributed the increase in giving to higher pretax corporate profits and a higher gross domestic product.
“The economy going into this year was actually a strong year,” Una Osili, director of research with the Lilly Family School, said Tuesday in a press conference announcing the results.
The record-setting year was 2017, when Americans gave $427.71 billion in real dollars. Researchers factor in inflation when comparing years.
For 65 years, the Giving USA report has provided a snapshot of charitable behavior by Americans, which has chiefly been driven by individuals.
However, a federal tax overhaul in 2017 wiped out incentives for many low- and middle-income Americans to report charitable giving on tax filings, leaving corporations, foundations, bequests and wealthier Americans to fill in the gap.
Ms. Osili said the share of Americans who itemize tax returns has dropped below 10%, meaning the vast majority do not receive any IRS recognition for giving — if they are giving at all.
“Fewer American households are participating in charitable giving,” Ms. Osili said. “We call this ‘dollars up and donors down.’”
Nonetheless, individuals accounted for 69% of the overall dollars to nonprofits in 2019. Foundations represented the second-largest share (17%), donating $75 billion. Bequests (10%) and corporations (5%) made up the remaining significant sources of donations.
Although corporations maintain “visibility,” giving has historically been relatively low, researchers say. But strong performances in the stock market in recent years and the cutting of the corporate tax rate from 35% to 21% in 2017 — a signature piece of the tax legislation by President Trump and congressional Republicans — helped spur the donations, the Lilly Family School said.
Other characteristics of U.S. giving, including older Americans’ larger share of monetary gifts, remained relatively unchanged in 2019.
“I will say that the charitable giving environment continues to be dominated by the baby boomer generation,” said Laura MacDonald, vice chair of the Giving USA Foundation, who noted that boomers represent a large share of the population.
She also observed that social activism, including protesting and assisting at shelters, increasingly typifies charitable behavior of younger generations.
“There is less loyalty to an institution and more loyalty to a cause,” Ms. MacDonald said.
Recipients of charitable giving continue to be familiar pillars in American society such as religion, education and the arts.
Gifts to churches, synagogues and other religious nonprofits represented two-thirds of investments when the Giving USA report first took stock of philanthropy 65 years ago, but researchers say only 29% ($128.17 billion) of gifts went to religious causes in 2019.
One distinction about gifts to religious organizations is that they represent an economically, racially and ethnically diverse population.
“Giving to religion tends to be more democratized,” said Rick Dunham, chairman of the Giving USA Foundation. “You do see fairly high participation rates among high-income strata, but in one of our studies, lower-income households … are actually some of the more generous.”
One sector with a small decrease in gifts was international affairs, which declined 2.2 percentage points to 6% of overall giving.
“We’ve had a number of domestic crises in the last few years,” said Ms. Osili, noting natural disasters and other events “within our national border” that drew attention.
Giving in America has grown threefold in 40 years since roughly $150 billion — in inflation-adjusted funds — was donated in 1979.
Giving USA said it bases its estimates of giving on tax data, economic indicators and demographics.
Predictions for next year’s report are difficult as the economy muddles through a recession with jobless claims high as states begin to reopen after lockdowns for the COVID-19 pandemic.
“Giving is always contextualized,” said Mr. Dunham. “It doesn’t sit in isolation.”
Researchers noted that the GDP grew by 4.1% in 2019 and personal income grew by 4.4%, mirroring trends in charitable handouts. In the first quarter of 2020, GDP turned upside down, decreasing at an annual rate of 4.8%, according to the Bureau of Economic Analysis.
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