NEW YORK – Americans increased donations to charity by 5 percent in 2004, a lift for philanthropies that saw contributions stagnate in the past few years, says a new study, released Monday.
But givers sent most of their additional donations to organizations in which they have a direct stake, rather than social service groups dedicated to helping those less fortunate, says the report by the Giving USA Foundation (search).
Overall, donations rose to $248.5 billion, the highest yearly total ever. That represents a 5 percent increase, or 2.3 percent when adjusted for inflation.
The increase marks the first time since the stock market bubble in 2000 that contributions rose in inflation-adjusted dollars.
The economic recession that began in early 2001 curtailed philanthropic giving. In 2003, donations declined by 1 percent, after the adjustment for inflation. But, at least for corporations, foundations and wealthier donors, the subsequent improvement in the business climate has eased the way for larger donations, said Henry Goldstein, chairman of Giving USA.
"We know that there is a relationship between economic progress and philanthropic return," he said. "Clearly the economy for this reporting period appears to have been more stable and this certainly helped push up the number."
The Giving USA Foundation is chartered by the American Association of Fundraising Counsel (search), a trade group. Research for the report is generated by the Center on Philanthropy, located at Indiana University.
Despite the overall increase in giving, donors contributed a smaller percentage of their personal income to charity than in the past. In 2000, donors earmarked about 2.1 percent of their income for charity, or about $191. That declined last year to 1.9 percent, or about $188.
Religious organizations and education were the biggest single recipients of contributions, netting an estimated $88 billion and $34 billion, respectively, last year.
Total gifts to many types of organizations rose. Environmental and animal rights organizations enjoyed a 4.2 percent increase in inflation-adjusted terms, for example, while donations to arts and humanities groups rose 3.9 percent.
But gifts to human services organizations — including food banks and homeless shelters — declined 1.1 percent when adjusted for inflation, the third consecutive year they have decreased.
"I would be a little concerned about whether that's going to be a trend over time and what to make of it," said Goldstein, who also works as a fundraising consultant in the New York office of the Oram Group (search).
At the same time, gifts to international affairs groups — many of which are dedicated to human services work overseas — fell 1.8 percent. The figure doesn't include most of the giving after the tsunami late last year in Asia. Most of that giving will be reflected in the 2005 data to be reported next year, Giving USA said.
Several non-profit organizations contacted said their fundraising was boosted by the upturn in the economy.
Rodger DeRose, CEO of the Crohn's & Colitis Foundation of America, said the organization has recently seen double-digit growth. John Scales, vice president of development for Texas Children's Hospital, said that in 2004 donations soared to $23 million from $11 million.
"People have a different kind of attitude now," Scales said. "During harder times you still have a lot more cautious and conservative people. When the economy is on an upswing, people are more open and willing to contribute."
But they and others said, more than the rebound in the economy, the upturn in giving has resulted from a more strategic approach to soliciting donations.
Daniel Cardinali, president of the nation's largest non-profit organization aimed at dropout prevention, Communities In Schools, said the downturn in the economy forced groups like his to operate more like businesses.
"We had to mobilize our free resources to tighten our business model and make it more results driven," Cardinali said.
But the boost in the economy remains a driving force in increased donations.
"We feel we can be much more aggressive about asking because we feel like people have more money," Scales said.