Charitable Giving Skipped the Church's Collection Plate in 2011

Individual donations were on the rise last year, while corporate donations sank.

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A dip in church attendance may explain why collection plates grew emptier last year.

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Finally, a warm and fuzzy story on an otherwise cold and prickly economic landscape: jobs are scarce, the recession obliterated Americans' net worth, poverty is on the rise, and yet charitable giving is growing.

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According to a new report, charitable giving from American individuals, corporations, bequests, and foundations totaled $298.4 billion in 2011. That is an inflation-adjusted 0.9 percent increase from 2010 (all dollar figures in this story reflect 2011 dollars and are adjusted for inflation). The report, produced by the Giving USA Foundation and the Center on Philanthropy at Indiana University, shows that religious organizations, the largest type of recipient, took in 32 percent, or nearly $96 billion, of all 2011 contributions, a 4.7-percent decline from 2010. Meanwhile, educational giving, which includes college alumni donations, were the second-largest recipient, with 13 percent of contributions, a 0.9-percent increase from 2010.

"I was surprised that there was a little uptick—adjusted for inflation it was very small, but in current dollars it was a little more. I was pleased at that," says Jim Yunker, chair of the Giving USA Foundation.

Cultural shifts are in part responsible for some shifts in giving, says Yunker. For example, he says that the decline in religious donations may be linked to declines in church attendance. Meanwhile, money given to international organizations grew by 167 percent between 2001 and 2011, making this the fastest growing subsector in the study. That growth may reflect multiple factors, like a rapid rise in the number of international charities, as well as technological growth, which expands the reach of these causes.

Sometimes, a rise in giving can in large part be attributed to one or two sizable donations. Arts, culture, and humanities saw inflation-adjusted growth of 1 percent, to $13.12 billion. However, an $800 million gift from the Walton Family Foundation to the Crystal Bridges Museum of American Art in Arkansas helped to boost that figure.

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In one key way, last year's increase is similar to other recent economic indicators: there is improvement, but it's weak. As the Giving USA Foundation and the Center on Philanthropy point out, over the last 40 years, total giving has grown by an average of 2.6 percent in the two-year periods after recessions. In 2010 and 2011, giving grew at less than half that rate, at an average of 1.1 percent.

While giving increased slightly last year, giving as a share of personal disposable income held steady in 2011, at 1.9 percent—exactly where it was in 2009 and 2010. However, giving isn't necessarily a function of disposable income, Yunker notes.

"I have seen many gifts of significance from people who are at or below poverty level. And then I've seen some very generous, significant gifts from multibillionaires," says Yunker. "This really does come from across the board."

While individuals were feeling altruistic, it's a different story for donations coming from groups. Individual giving grew by an inflation-adjusted 0.8 percent in 2011, and bequests grew by 8.8 percent. However, foundations' giving declined by 1.3 percent, and corporations cut back even more, by 3.1 percent from 2010.

In many ways, that is not surprising. Pre-tax corporate profits grew by 4.2 percent in 2011, compared to 25 percent in 2010, according to the study's authors. In addition, corporations and foundations often have many people's opinions to consider before making a donation, a hurdle that people who drop $20 in the church offering plate don't have to worry about.

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"They've got shareholders to report to, and the shareholders want return on their investment," says Yunker. "Many investors would rather have that return in dividend rather than in goodwill for the corporate name."

Danielle Kurtzleben is a business and economics reporter for U.S. News & World Report. Connect with her on Twitter at @titonka or via E-mail at dkurtzleben@usnews.com.