What Influences American Giving?

Academic rigour, journalistic flair
Americans make charitable donations for many reasons. Andrey_Popov/Shutterstock.com
What influences American giving?

Published: July 25, 2017 2.16am BST
Una Osili
Professor of Economics and Philanthropic Studies; Associate Dean for Research and International Programs, Lilly Family School of Philanthropy, Indiana
University
[ THIS ARTICLE WAS PUBLISHED IN 2017. More up-to-date information is available in

a more recent article. ]
Several nonprofits, such as the Sierra Club, Planned Parenthood and the American Civil Liberties
Union, have reported a surge in donations as some Americans respond to their political concerns by
supporting causes they believe will make a difference.
Yet while scholars have found ample evidence that economic conditions can shape charitable giving,
the connection between overall donations and the political climate is less clear.
As the lead researcher responsible for the Giving USA report, which the Indiana University Lilly
Family School of Philanthropy researches and writes in partnership with the Giving USA Foundation,
I have a unique opportunity to study how and why people give, and how those patterns unfold over
time.
https://theconversation.com/what-influences-american-giving-78800 22/10/24, 6 23 p. m.
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Giving in 2016
In the latest edition of Giving USA, we estimated that American individuals, estates, corporations and
foundations donated a record US$390 billion to charitable causes in 2016.
Total giving grew 1.4 percent, adjusted for inflation. Donations from individuals amounted to nearly
three-quarters of all giving and grew more than giving by foundations, corporations or bequests with
a 2.6 percent gain to $282 billion.
A broad increase in what individual people donate could make a big difference in the amount of
money Americans give overall to charity.
American charitable giving

According to the 2017 Giving USA report, Americans gave a total of $390 billion to charity last year. Numbers are
in billions of inflation-adjusted dollars.
$400b
$350b
$300b
$250b
$200b
$150b
$100b
$50b
$0b
1980 1990 2000 2010
The Conversation, CC-BY-ND

Source: Giving USA Foundation/Indiana University Lilly Family School of Philanthropy
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Economic factors
One way that the health of the economy shapes charitable giving is that people tend to give more
money when they make more of it. Research by University of Chicago economist John A. List and
other experts has found economic conditions – as measured by the S&P 500 stock index, personal
consumption and the gross domestic product (GDP) – influence giving.
In one study, List and his colleague Yana Gallen found that giving rises when stocks rally. In fact, the
S&P 500’s performance accounts for nearly 40 percent of the variation in annual charitable giving.
The money Americans gave to charity last year to support everything from houses of worship and
homeless shelters to veterans’ organizations and art museums amounted to about 2.1 percent of GDP
– the same share as for 2014 and 2015.
This measure has barely budged over the past 40 years. In 1976, during the Ford administration,
charitable giving comprised 1.7 percent of the U.S. economy. Giving stood at 2.1 percent of GDP
before the Great Recession, and only dipped to 1.9 percent before bouncing back.
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U.S. charitable giving as a share of GDP
According to the 2017 Giving USA report, for the past four decades, American charitable giving has ranged
between 1.6 percent and 2.2 percent of GDP.
2.4%
2.2%
2%
1.8%
1.6%
1.4%
1.2%
1%
1980 1990 2000 2010
The Conversation, CC-BY-ND

Source: Giving USA Foundation/Indiana University Lilly Family School of Philanthropy
Shifting priorities
The priorities of the American public are more diverse than ever, and that diversity is reflected in its
giving habits. In 2016, donations to all of the nine major categories we track went up, for only the
sixth time in the last 40 years.
What makes people change how and how much they give?
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They may heed signals from their friends, relatives and other networks. We also know that people
respond to requests to give and direct their gifts to causes and issues in which they believe they can
have an impact. For instance, during the Great Recession, the philanthropists who make million-
dollar donations shifted more of the money they give away to organizations that help the needy,
according to a study I conducted with my colleagues.
There is also evidence that campaign contributions don’t replace charitable giving. In fact, fundraising
research has found that donors who contributed to political campaigns during an election year
actually gave more to nonprofits during an election year compared with the previous year.
Swift growth
We have, however, witnessed a shift in giving to groups devoted to animal welfare and environmental
issues, as well as international affairs. These categories were so small that we couldn’t track them
until 1987.
While they still draw less support than others – religious groups, at $123 billion, and educational
institutions and organizations, at nearly $60 billion, still top the list – animal welfare and
environment groups and international affairs organizations made big strides in 2016.
Specifically, giving to environment/animal organizations rose 5.8 percent in inflation-adjusted dollars

to $11 billion in 2016 – faster than any other category. Giving to international affairs groups, such as
Doctors without Borders, notably grew 4.6 percent in inflation-adjusted dollars to $22 billion. What’s
impressive about this uptick is that there were few of the large-scale international disasters that
usually drive that kind of philanthropy.
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Charitable giving, by organizational type
Total giving by American individuals, bequests, foundations and corporations to charity in 2016. Numbers are in
billions of inflation-adjusted U.S. dollars.
$ (billions) % change from 2015

Religion
122.9 1.8
Education
59.8 2.3
Human Services
46.8 2.7
Foundations
40.6 1.8
Health
33.1 4.4
Public-Society Benefit
29.9 2.5
What else to watch
As many compelling studies have shown, there is a growing interest in how noneconomic factors
influence donors, such as the desire for status or social pressure from fundraisers.
We have also found that taxation can have an impact. A recent study I co-authored found that two tax
policy changes proposed by Congress and the Trump administration would reduce charitable giving.
We also found that another tax policy shift that nonprofit leaders are advocating would increase
donations.
And even if political concerns do change giving patterns in the short term, that trend might not persist
over time. We’ll be tracking these developments in future editions of Giving USA.
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Academic rigour, journalistic flair

Americans make charitable donations for many reasons. Andrey_Popov/Shutterstock.com

What influences American giving?

[ THIS ARTICLE WAS PUBLISHED IN 2017. More up-to-date information is available in

American charitable giving

The Conversation, CC-BY-ND

The Conversation, CC-BY-ND

Specifically, giving to environment/animal organizations rose 5.8 percent in inflation-adjusted dollars

$ (billions) % change from 2015

What else to watch

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