Initial forecast for 2015 predicts drop in donations
DALLAS, Texas (January 28, 2015)—Atlas of Giving today shared the 2014 final report on charitable giving in the United States and released the initial 2015 giving forecast. As noted in the final report, Americans gave a record $456.7 billion to charity in 2014. According to the year-end report, total donations grew by 9.3% over 2014, fueled by favorable economic factors that drive giving, an increase in the number of nonprofit organizations, the impact of donor advised funds, as well as advances in fundraising technology and techniques.
“Charitable giving in the U.S. is primarily a function of specific economic and demographic factors, coupled with the impact of regional, national and world events,” Rob Mitchell, CEO of the Atlas of Giving, said. “How a charity chooses to go about raising money and who they raise it from determines what impact the various drivers of giving activity have on gifts to that organization.”
The biggest gains in gift revenue were realized by human services/disaster relief organizations, educational institutions and environmental causes. In 2014, double digit growth in stock prices encouraged these increases in giving to organizations such as colleges and universities, which rely heavily on large gifts and capital campaigns. An improved employment picture coupled with reduced energy prices boosted giving from discretionary income to disaster relief, social service agencies and environmental programs, most of which depend on a high volume of smaller donations to fund operations.
Improved consumer confidence also played a role in giving growth. “Mood matters,” Mitchell, said. “When consumers feel better about the economy, they tend to give more.”
The report also cites low inflation and historically low interest rates as factors which contributed to a robust year of receipts for America’s nonprofits. Other factors which contributed to the rise in giving include a continued surge in the number of new nonprofits and churches in the U.S., as well as an enormous increase in contributions to donor advised fund accounts. In fact, the number of U.S. nonprofit organizations recognized by the IRS has grown 50% since 2003.
Mitchell says the impact of donor advised funds on giving is enormous and growing. “In 2014, donor advised funds accounted for $29.4 billion in giving. That’s 6.4% of all giving in the U.S.” Mitchell noted.
While donations to churches and religious causes remains the largest giving category, representing one third of all gifts, giving to religious organizations grew at a rate of only 6.4% in 2014. Comparatively, gifts to human services/disaster relief organizations increased 12.7%, while gifts to environmental causes and educational institutions rose 11.8% and 11.5%, respectively.
The initial forecast for giving in 2015 is far less positive. The Atlas projects that giving could actually drop from 2014 levels by as much as 3.2%. The last time total annual giving fell was in 2009, when recessionary conditions brought about a 5.8% decline from the 2008 total. The forecast cites an anticipated stock market correction, along with an expected rise in interest rates in the second half of 2015 as primary drivers of an upcoming downturn in giving.
Global economic factors are also expected to negatively impact 2015 giving. Weakening economies in Germany, France and Italy could negatively impact many American corporations, and rising geostrategic competition from Asia may weaken the value of some U.S. companies, putting pressure on American jobs and compensation levels.
The Atlas of Giving reports and forecasts U.S. charitable giving on a monthly basis by charitable sector, gift source and all 50 states as well as the District of Columbia.
The full Atlas of Giving report on 2014 giving and forecast for 2015 is available at no charge at www.atlasofgiving.com.