Despite Economic Dip, Giving Rose in 2007

Donations Passed $300 Billion for 1st Time

By Philip Rucker

Washington Post Staff Writer

Americans donated $306 billion to charities in 2007, as U.S. philanthropic giving rose to a record level despite a downturn in the national economy, a survey being released today has found.

Charitable giving increased 1 percent last year, when inflation is taken into account, and surpassed $300 billion for the first time, according to the Giving USA survey.

But experts said that the growth may be short-lived, as many charities reported concerns that rising gas prices and turmoil in the housing and credit markets could hamper their fundraising this year.

In 2007, most of the donations, about $229 billion, came from individuals. But after years of steady growth, that figure remained stagnant last year, a sign that the softening economy may be pinching charitable contributions. Giving by corporations totaled $15.9 billion, an inflation-adjusted decline of 1 percent from the year before.

Meanwhile, giving from private foundations increased 7 percent and through personal bequests 4 percent, adjusted for inflation.

Del Martin, chairwoman of the Giving USA Foundation, which compiles the annual report, said the modest growth encouraged her. But she said many charities surveyed, particularly those with small endowments, were worried about this year's fundraising totals.

"Those nonprofits that have the most tenuous relationships with donors are the ones that have the greater concerns," she said.

In Washington, as in cities across the country, demand for services at charities is soaring amid the economic downturn. Requests for emergency assistance have increased 28 percent at Catholic Charities of the Archdiocese of Washington, said president and chief executive Edward J. Orzechowski.

Donations to Catholic Charities increased last year, he said, crediting a loyal corps of donors.

"When times are tough, people are willing to dig deeper," Orzechowski said. But, he added, "when the demand rises to the degree that it is, there's no way we can meet that demand, even with increased giving."

Any decrease next year in giving, no matter how modest, could severely hurt area nonprofit organizations, said Julie L. Rogers, president of the District-based Eugene and Agnes E. Meyer Foundation. She said many groups are "chronically undercapitalized anyway."

"They may be very well managed, but they live at the financial margins because most of them don't have much by way of financial reserves or working capital, and they are raising every dollar every year," Rogers said.

A promising sign for charities is the steady growth in giving by private foundations. Buoyed by gains in stock market investments and a record $37 billion in new gifts, the combined assets of U.S. foundations rose from $550 billion in 2006 to $614 billion in 2007, according to a recent survey by the Foundation Center, a group that researches philanthropic giving.

Although much of that money remains locked in endowments year after year, foundations are spending a larger share of their assets than was true a decade ago, the survey found. More than half of foundations surveyed said they planned to increase their giving in 2008.

"What you are seeing is the value of sustained endowments that increase in good times and therefore are equipped and able to respond to society's needs in bad times," said Steve Gunderson, president and chief executive of the Council on Foundations.

In overall U.S. charitable giving, religious congregations received the biggest windfall from donors, the Giving USA study found. Religious groups collected $102 billon, or one-third of all gifts, followed by nonprofit educational organizations, which collectively raised $43 billion.

But the share of overall donations going to religious groups has decreased steadily over time. In the late 1980s and early 1990s, religious congregations received nearly half of all gifts, according to Giving USA's historical data.

Martin attributes this to increased competition among nonprofit groups for donations, as the number of charitable organizations has soared over the past decade to about 1.4 million.

In 2007, international aid agencies, environmental groups and human service charities saw the largest increases in charitable gifts. Gifts to international groups, which were so small 20 years ago that the category was nonexistent in the survey, have grown steadily, increasing by 13 percent last year to $13 billion.

"That number is indicative of what I say often: In a global economy, you have global philanthropy," Gunderson said.

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