Americans’ Charitable Giving hits 19-Year Low at a Time When Many Need Help

While Americans’ donations to charity are in recession mode for a second straight year, a new report shows that the decline isn’t as significant as it seems. In fact, according to Giving USA, Americans gave around $339 billion in 2018, the lowest total in 19 years.

The report noted that giving was hit after a record-breaking $373 billion was donated in 2017, at the same time that the economy was struggling under the weight of a growing federal debt.

Despite the warning sign of a drop in charitable giving, however, Giving USA CEO Patrice Flint told reporters on a conference call on Tuesday that the current dip isn’t as alarming as it may seem.

“We’re close to our highest point in the history of American charitable giving,” she said.

Giving USA tracks over $2 trillion in donations to charity in the United States.

In addition to the financial concerns, the timing of Americans’ giving this year could be affected by bad weather that hampered charitable efforts in many parts of the country.

“Cleaning out your closet and winter coats to donate might not have been the best timing,” Flint said.

As one of the report’s authors, Kathleen Rooney, puts it, the uptick of Americans’ giving in 2017 was so precipitous because of the recent changes in tax law that increased the annual charitable giving deduction.

The previous year, for example, saw a 14.5 percent increase in charitable giving and its highest yearly total since 2002.

Unfortunately, the uptick in charitable giving in the year prior to the change in tax law is likely in part attributed to people just wanting to show off the new tax code and that it favored the giving community.

“With a year-over-year increase in giving that was so large, a lot of people felt like they had to do something,” Rooney said.

The season marked the highest level of giving since 2007, but still came up short of 2008, which was the most generous year for charitable donations.

“This [2018] should be a little more normalized. 2018 certainly didn’t improve, it didn’t go up much,” Rooney said.

The Financial Times reported that some scientists believe the tax reform reduced federal benefits for charitable giving.

Giving USA executives acknowledged that millions of Americans living in poverty, jobless or raising children have a challenging time making ends meet.

Rooney said there are a number of potential reasons that lead to donations not occurring: Some families try to gain tax credits they can use on other life events, while some are reluctant to “take on the cost of philanthropy.”

It is possible that donating to a specific charity, rather than supporting a broad “giving circle,” is viewed more favorably.

“Of course, the problem is they’re not all charities,” Rooney said. “Some are huge corporations.”

According to Rooney, some charitable organizations donate an average of 8 percent of their revenue to research, and those sources of donations have grown over the last several years.

So while Americans’ charitable giving has dropped, Rooney and Flint noted the encouraging statistics.

“We’re seeing increases in the amount of time that people are spending on their giving, and we’re also seeing record engagement,” Rooney said.

The percentage of Americans volunteering for religious groups has grown, as well.

“One of the biggest shifts has been in people who are volunteering for local charitable organizations,” Rooney said.

The percentage of Americans who were volunteering at a charity has risen from 28 percent in 2014 to nearly 40 percent in 2018.

“Some people are more comfortable with the idea of committing a certain amount of time. We hear stories of people say, ‘I’ve raised kids, I raised a family, and I’m sick of feeling that I have to go it alone,’” Rooney said.

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