Annual Giving USA survey proves your charitable dollars count, but add up to less

The Giving USA Foundation annual survey, a report on American philanthropy funded by the nonprofit fund-raising industry and conducted by the Center on
Philanthropy at Indiana University, was released today, and the results conform to the times: Charitable giving was down 2% in 2008, or 5.7% when adjusted for inflation. The survey, which started in 1956, has marked declines only two times previously.

Two-third of public charities took in less money than the year prior. But the total amount received remains impressive: $307.65 billion, compared to $314.07 billion in 2007. When measured against Gross Domestic Product, giving levels in 2008 were consistent with those in 2007: charitable giving, as a percentage of GDP, was 2.2% in 2008, and 2.3% in 2007.
"This drop in giving meant that nonprofits have had to do more with less over the past year, but it could have been a lot worse," the chairman of the Giving USA Foundation, Del Martin, said in a statement.

It will likely get worse before it gets better, as nonprofit giving catches up to the recession. Some groups have been hit much harder than the 5.7% figure indicates.

Here's how these numbers are translating into real trouble for organizations:

The Brooklyn Kindergarten Society, which provides day care to low-income families in Brooklyn, New York, saw a 20% drop in giving in 2008, and is bracing for more of a drop in 2009. In 2008 it adjusted to a lower budget by initiating a hiring freeze, eliminating bonuses, and holding a recognition ceremony for long-time employees but not giving them a gift of jewelry.

In 2009, the children and families will also start to feel the pinch. "We're just not going to have the funding to provide arts and music enrichment, or the nutritionist who comes to work with out cooks to make our meals that much more nutritious and child-friendly," Brooklyn Kindergarten Society's director of development, Michele Newman, said. The organization is also planning to use interning social workers to provide families with parenting and relationship skills, in place of full-time staff.

In response to the challenging economic times, the staff of Shakespeare & Company, a theater company in Lenox, Mass., got together and made an Internet video hoping to entice donors. The "Call to Action" features staff members reciting lines from Shakespeare, and the message, "Today we need more than applause. If art is to live on, your involvement counts now more than ever." Donors have responded: After the video was posted, a cluster of donations came in online, including an anonymous $5,000 gift from a donor who had given a few $100 gifts in the past. "We made a soft pitch not targeted to Shakespeare & Co. because we wanted other theater companies to be able to use this piece as well," said Shakepeare & Co.'s associate director of publicity, Jeremy Goodwin

The pressure is on for Shakespeare & Co. to raise money, specifically $1.2 million. The Kresge Foundation has offered Shakespeare & Co. $800,000 if it reaches its target. The gifts, combined, would help the theater company meet its $10 million capital campaign goal.

City Harvest, the New York-based food rescue program, says increased demand has forced pantries to reduce their hours and reduce the amount of food distributed per person. It cut costs at its gala by sharing decorations with a gala held in the same space on the same day. City Harvest's executive director, Jilly Stephens, is also spending lots of time with existing big donors to coax more support from them. And so far, it's helping: donations are running slightly ahead of last year, City Harvest's vice president of External Relations, Patricia Barrick, said.

Total giving in the Giving USA survey incorporates giving from individuals, charitable bequests, corporations, and foundations. Individual giving and charitable bequests, which together compose more than 80% of all giving, decreased 2.7% (6.7% adjusted for inflation); corporate giving, accounting for 5% of all giving, fell 4.5% (or 8% adjusted for inflation). Foundation giving, comprising 13% of the pie, increased by 3% (but decreased .8% when adjusted for inflation).

The takeaway: individuals make the biggest impact on charities. Giving by type provides insight into Americans' charitable impulses. Religious giving, which accounts for more than half of all giving, was up a few percentage points, while education was down slightly. The flow of money to foundations dramatically dropped, about 20%. Health, the environment, and arts and culture all experienced drops greater than 5%.

In the human services sector, more than half of surveyed organizations reported an increase in need, but giving to nonprofits in this area dropped 12.7%, or 15.9% when adjusted for inflation.

Nonprofits serving youth and children have been hit hard: 74% of groups serving youth said they are underfunded or severely underfunded. By comparison, 53% of groups providing food, shelter, and clothing said they are underfunded. Overall, 60% of human service organizations said they have been cutting expenses, services, and staff.

Amanda Gordon is the former society editor of The New York Sun and now is freelancing. You can see her photos here (and even buy them)
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