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GivingUSA report: Dollars were up, but the future could be bleak

While Americans gave more than $9 billion more in charity in 2007 than they did in 2006, according to the annual GivingUSA report, published Monday, the news is not rosy.

Americans gave some $306.4 billion in charity in 2007, according to the report, which is prepared annually by the Indiana University Center on Philanthropy. That is a significant rise from the $296 billion Americans gave in 2006. And Jewish causes stood to benefit form the increase in dollars, as Americans gave $100 billion to religious causes, more than they gave to any other cause.

But the Fundermentalist sees reasons for significant concern. The report covers data only for 2007 – before our recession went full-blown – and even still it shows early warning signs that the recession will hit charities hard.

Personal giving, which makes up nearly 75 percent of all charity, was up in dollars in 2007, reaching nearly $229.03 billion. But personal giving, which is closely tied to the stock market, as people tend to give more when they feel comfortable financially, was actually down 0.1 percent when those numbers are adjusted for inflation, the report says.

Grant making from charitable foundations was also up in 2007 by more than 10 percent in dollar totals, as foundations doled out some $38.52 billion. But again, that figure may be in trouble for 2008, as the foundations themselves received less money form their benefactors: Foundations received $27.73 billion, a drop of 9.4 percent in dollars and a drop of more than 11 percent when adjusted for inflation.

Corporate giving, which was up by 1.9 percent to $15.69 billion in 2007, was actually down 0.9 percent after being adjusted for inflation. Again, this was before the economy tanked and when the Dow sat well above the 11,880 it was at today, as I write this post. Corporate giving makes up some 5.1 percent of charity.

According to Robert Evans, the principle of EHL consulting, a Philadelphia-based philanthropy consulting group, the numbers are actually worse.

Evans, who sits on the Giving USA editorial board, says donations were down significantly in the fourth quarter of 2007, when the recession started to hit, after rising during the first three quarters of the year.

“The bad news is that the $306 billion figure is smaller than we would have expected,” Evans told the Fundermentalist. “When comparing the first three quarters of 2007 to the fourth quarter, we would have expected double that.”

On top of that, there were no “mega-gifts” of $100 million given and paid out in 2007, he said.

There may be a silver lining for Jewish charities, said Evans, who says that 80 percent of his clients are Jewish organizations. Giving to Jewish federations and Israeli causes was up between 2001 and 2006, he said.

EHL conducted its own survey to release in tandem with the GivingUSA report. The study does not present an exact comparison to the Giving USA report, in that it only shows tax numbers from years when the economy was still robust, but EHL looked at the 990 tax forms for federations and the 50 largest “American Friends of” Israeli charities and found that between 2001 and 2006, giving to federations was up from $1.8 billion to $2.1 billion. That is special cause for optimism, Evans said, because during that same time giving to the United Way was down. Giving to Israeli-based organizations was up by 30 percent during that time period, he said.

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