Two Myths on Charitable Giving in the U.S.

by Linda M. Lampkin, Senior Nonprofit Compensation Specialist 9. July 2013 13:59

 

The recently released annual report, Giving USA2013, estimates that charitable giving in the United States rose 3.5% from 2011 to 2012, to a total of $316.23 billion. After adjusting for inflation, that increase drops to 1.5%. While giving by individuals, foundations, estates, and corporations all increased, the total for individual giving rose by $8.67 billion in 2012 – accounting for 72% of all charitable contributions. While total giving is growing, it has been around 2% of inflation-adjusted national GDP for many years.   

However, what you think you know about charity giving may not be true – check out these myths!

 

Myth #1 – Most charitable donations go to help the poor. 

Not really. In 2012, of the total charitable giving estimated at about $316 billion, only 13% went to Human Services charities, the ones you typically think of as providing social services. 

The biggest proportion of 2012 contributions (32%) went to religious organizations.  Although you might think that churches give that money to the needy, studies usually show that most of a typical church budget goes to salaries and maintenance of a building. 

Other donations were received by organizations categorized as Education (13%), Foundations (10%), and Health (9%). While giving to Arts and Environmental causes increased, the percentages of total giving were still small, at 5% and 3%, respectively.   

So the organizations providing services to people in need – the ones most often associated with “charity” – are really getting only a small portion of charitable donations.

 

Myth #2 – Most charities are supported by grants from foundations and corporations.

No. Most charities receive no revenues, or only a small proportion of their total income, from foundations and corporations. Looking at the national total of charitable giving, individuals contributed 72% in 2012, foundations gave 15%, and corporations only provided 6%. Donations from individuals are the major source of revenue for most charities.

Another major source of income for many charities is revenue from program services –fees and payments from customers and clients (for example, ticket sales for arts groups and tuition payments for schools, etc.)   

A free Summary of the Giving USA 2013 is available, along with the full report. Also, you can check out individual charities via ERI’s free Form 990 library. 

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