Transcript 1.1.0 INTORDUCTION
bienvenida
welcome
Patrick Rooney
Executive Director Center on Philanthropy at Indiana University
Professor of Economics and Philanthropic Studies Indiana University Purdue University Indianapolis [email protected]
www.philanthropy.iupui.edu
About The Center on Philanthropy
Mission:
Increasing the understanding of philanthropy, improving its practice, and enhancing participation in philanthropy in the US and around the world.
Mantra:
Research informs practice & Practice informs research.
About The Center on Philanthropy
Largest, most comprehensive academic center on philanthropy • Staff ~ 50 • Faculty ~ 60 professors at Indiana University • Fundraising training faculty ~ 50 • Budget ~ $10 million/year • Programs regularly offered in U.S. and internationally
About The Center on Philanthropy
Five core program areas • Research • Academic Programs • Public Service and The Fund Raising School (TFRS) • Public Affairs • Philanthropic Services o Women’s Philanthropy Institute o Lake Institute on Faith & Giving o Third Millennium Initiative
About The Center on Philanthropy: Going global in all that we do
The Fund Raising School (TFRS) taught courses or workshops recently in: • Beijing, China • Cairo, Egypt • Dublin, Ireland • Istanbul, Turkey • Madurai, India • Singapore • Vienna, Austria Academic exchange program: University of Bologna, Italy.
About The Center on Philanthropy and Procura:
The original agreement between the Center on Philanthropy and Procura was signed on November 13, 1995.
• TFRS begun training trainers in Mexico. • Procura translated the first version of 101 into Spanish. • New translations as courses were added to curriculum. Dr. Timothy Seiler, the Director of the Fund Raising School, spoke at Procura’s 10th anniversary celebration in 2005.
About The Center on Philanthropy and Procura:
Development of a formal relationship between
one of the universities in Mexico
, Procura, and The Fund Raising School.
The Center on Philanthropy invited presenters from Mexico to The Fund Raising School faculty meetings. Procura and the Center on Philanthropy had to revised some provisions of the agreement in the time of financial strain.
Long-term trends in philanthropy: Session Outline
• Total giving in the U.S. • Individual giving in the U.S. (biggest share of total giving) • Giving in Mexico • Questions and Answers
The role of philanthropy in financing the Nonprofit Sector O'Neill (2002) estimates that private gifts and grants play an important role with 20% of the total revenue for the nonprofit sector. • • Philanthropy is only the third most important funding source for US nonprofits on average. "Payments for services" is the largest income generator at 40%. Followed by the government at 35%. • "Other" rounds out the funding picture with 5% of total revenues.
Total giving as a percentage of GDP, 1969 –2009
Source: Giving USA Foundation TM/Giving USA 2010 *Data are rounded.
Total giving adjusted for inflation, 1969-2009
$ in billions Source: Giving USA Foundation TM/Giving USA 2010 *Data are rounded.
Where did the money come from (in 2010)?
Giving fell among three of the four sources: individuals, foundations, and bequests.
Surprisingly, giving by corporations is estimated to have increased . Up to one-third of corporate giving is in-kind. That is less subject to economic pressures than cash giving.
Corporate giving rose to an estimated $14.1 billion, up 5.5 percent (5.9 percent adjusted for inflation). recession level.
This unexpected bounce takes corporate giving to within 1 percent of its pre Five individual donors* gave a total of $1.6 billion. Without that, giving would have fallen by more than 1 percent (current $). We can confirm these gifts were paid (Slate.com) and nearly all of that money went into foundations. So, charities don’t see that increase yet.
Source: Giving USA Foundation TM/Giving USA 2010 * Druckenmiller, Bloomberg, Gates, Soros, and Nippert
Where did the money come from?
Change over time by source
Sources 1968 2008 Percent Change
Household Bequests Corporations Foundations Total 91.27
9.90
5.57
9.90
116.64
229.28
22.66
14.50
41.21
307.65
151% 129% 160% 316% 164%
Source: Giving USA 2009. (in billions of inflation adjusted dollars)
Where did the money go to?
Change over time by recipient organization
Uses
Religion Education Human Services Health Public society benefit
1968
52.10
14.73
14.29
12.87
2.66
2008
106.89
40.94
25.88
21.64
23.88
Percent Change
105% 178% 81% 68% 798% Arts, culture, humanities International affairs Environment/animals Gifts to foundations Gifts to individuals 3.71
n/a n/a n/a n/a 12.79
13.30
6.58
32.65
3.71
245% n/a n/a n/a n/a Unallocated Total 16.27
19.39
19% 116.65
307.65
164%
(in billions of inflation adjusted dollars) Source: Giving USA.
Giving during recession: Total giving, inflation adjusted, in billions of dollars, 1967 –2007
$350 $300 $250 $200 Year with at least one month of recession "Slowdown" year Recession in year of 8 months or more $150 $100 $50 $0 1967 1972 1977 1982
*Showing recession years and years with decreases
1987 1992 1997 2002 2007
Average drop in giving during years of 8 months or more of recession
Source of Giving
Individuals
% of Total Giving
80%
% Drop during recess.
-3.9% Foundations Corporations Total 10% 5% 100% -0.1% -1.6% -1.0%
Source: 2009.
Short-term trends in total giving
Giving fell in 2009 - a drop of 3.6 present-dollar value decline in giving. But not as much as it could have, given the tough economy and job market. Largest decline in Giving USA’s history in CURRENT DOLLARS but NOT the largest adjusted for inflation. The largest drop adjusted for inflation was in 1974 (-5.5 percent).
This was the third year that giving exceeded $300 billion.
Different organizations had different experiences.
Source: Giving USA Foundation TM/Giving USA 2010
Long-term (40-year) trends in total giving
Total giving increases, on average, 2.8% (adjusted for inflation). Increases 4.3% per year in non-recession years!
On average, all subsectors see long-term growth in charitable gifts received.
Individuals account for three-quarters of total giving. For secular-only results, individuals account for about 60% of total.
Giving averages about 2% of GDP, moving from a low of 1.7% in the 1980s to 2.4% in 2005.
In all years, in all economic times: some organizations see a drop in giving; some see an increase; others stay the same.
What to anticipate in future years
Giving will recover as the economy recovers, although with a lag.
We know from prior recessions that giving returns to pre recession levels three to five years after the end of the recession.
It might take longer after this recession – most economists are predicting a slow recovery, with very gradual reductions in unemployment.
Source: Giving USA, 2010.
Trend in giving by individuals, 1967 –2007
$ in billions 229.03
199.25
83.24
13.41
1967 96.08
19.37
1972 101.09
29.55
1977 102.34
117.78
64.53
47.63
129.60
160.44
124.20
172.40
87.7
1982 1987 1992 Inflation-adjusted dollars Current dollars Real rate of growth 1997 2002 2007
Estimating individual charitable giving
Using historical data from IRS and other federal sources and comparing estimating models for GUSA, we found the following: • The strongest predictor of individual giving is the S&P 500.
• Suggests that a 100 point increase in the S&P 500 is associated with a $1.7 billion increase in charitable deductions, holding income, tax rates, etc constant.
Source: Deb, Wilhelm, Rooney, and M. Brown (2003)
Estimating individual charitable giving
• Personal Income is the second biggest predictor of household giving. • A $200 billion increase in real (inflation-adjusted) personal income is associated with a $1 billion increase in charitable deductions, holding the S&P 500 and tax rates, etc., constant.
• Charitable giving persists from year to year: last year’s giving is a good predictor of this year’s giving.
Source: Deb, Wilhelm, Rooney, and M. Brown (2003)
Trends in individual giving and demographics: total population size By 2050, the population may increase to 394 million—a 50 percent increase from the 1995 population.
Despite these large increases in the number of persons, the rate of population growth is projected to decrease during the next five decades by about one-third. After 2025, the United States would grow more slowly than ever before.
Source: U.S. Department of Commerce, Economics and Statistics Administration Bureau of the Census. Population Projections of the United States by Age, Sex, Race, and Hispanic Origin: 1995 to 2050. Current Population Reports. February 1996.
Trends in individual giving and demographics: gender
Women are 50% of workforce, and employed women are some of the most likely donors. Gender distribution is not even across industries and professions. Single men and single women give about the same on average ($924 vs. $962). After controlling for income, education, etc, single women are much more likely to give at all and to give more.
Similarly, even after controlling for income, etc., married couples are more likely to give and to give more than single men.
Source: Giving USA, 2010; America Gives.
Trends in individual giving and demographics: race
Although nearly three-quarters of the population was non Hispanic White in 1995, this group may be declining in size after 2030.
By the middle of the next century the Black population would nearly double its 1995 size to 61 million. After 2016, more Blacks than non-Hispanic Whites would be added to the population each year.
The race/ethnic groups with the highest rates of increase would be the Hispanic-origin and the Asian and Pacific Islander populations with annual growth rates that may exceed 2 percent until 2030. In comparison, even at the peak of the Baby Boom era, the total U.S. population never grew by 2 percent in a year.
Source: U.S. Department of Commerce, Economics and Statistics Administration Bureau of the Census. Population Projections of the United States by Age, Sex, Race, and Hispanic Origin: 1995 to 2050. Current Population Reports. February 1996.
Trends in individual giving and demographics: race
Mean levels of giving by whites is 41% more than minorities ($1,572 vs. $1,114).
After controlling for income, education, etc., differences go away. Differences are income and education differences, not racial differences.
Found significant racial and gender differences in how respond to different survey methods.
Source: America Gives, Rooney, Mesch, Chin, and K. Steinberg (2005).
Trends in giving as a share of selected types of personal outlays and personal income ,1967 –2007
“ Luxury” personal outlays : alcohol, international travel, jewelry/watches, recreation, restaurants, tobacco, to 2006 “Essential” personal outlays: clothing, energy, food (excluding restaurants and alcohol), housing, and home operations, to 2006 Disposable personal income 19.6% 18.2% 16.6% 16.5% 15.2% 14.6% 16.3% 17.1% 17.5% 6.0% 2.3% 1967 6.0% 2.2% 5.6% 2.1% 5.4% 2.0% 1972 1977 1982 5.5% 1.9% 1987 5.8% 1.8% 1992 6.6% 2.1% 1997 7.3% 7.4% 2.2% 2002 2.3% 2007
Gifts captured on Million Dollar List made by individuals (number)
Source: Center on Philanthropy.
Total Charitable Giving by High Income Households Estimated Total = $126b (in billions)
Source: The Bank of America Study of High Net-Worth Philanthropy, 2006.
Motivators Ranked as Important by High Net-Worth Households
Source: The Bank of America Study of High Net-Worth Philanthropy, 2006.
Percentage of High Net-Worth Households Reporting They Would Give More to Charity if the Following Occurred
Source: The Bank of America Study of High Net-Worth Philanthropy, 2006.
Average Giving: Total, Secular and Religious by Income High Net-Worth Households, 2005 (donor households only)
Source: The Bank of America Study of High Net-Worth Philanthropy, 2006.
Average Giving: Total, Secular and Religious by Wealth High Net-Worth Households, 2005 (donor households only)
Source: The Bank of America Study of High Net-Worth Philanthropy, 2006.
Average Giving: Total, Secular and Religious by Source of Net-Worth High Net-Worth Households, 2005 (donor households only)
Source: The Bank of America Study of High Net-Worth Philanthropy, 2006.
Trends in individual giving and innovation: Philanthropic Giving Index Report PGI reports steady rise in success of Internet fundraising.
Below 10 percent in 2000. Rose to 22 percent in summer 2007.
Growth in success can be explained in these ways: • More people are giving online.
• Same people are giving online but making more gifts or making larger gifts online.
• More organizations are asking for donations online and getting small contributions (so that success means going from zero to something) without any fundamental change in donor behaviors.
• Perhaps other causes as well
Source: American Express Charitable Gift Survey, 2008.
Trends in individual giving and innovation: American Express Charitable Gift Study 5.9 percent of adults in the United States gave online in 2008. One in ten donors gives online currently. 64 percent of online donors cited convenience as a reason for online giving. • True for all ages of online donors and for all income levels of online donors.
Charities themselves have an important role to play. 20 percent said that they gave online in response to something the charity initiated.
Source: American Express Charitable Gift Survey, 2008.
Trends in individual giving and innovation: American Express Charitable Gift Study Both Online Offline
Mean $172 $165 $174
All
Median $50 $50 $50
Religion
Mean Median $284 $334 $280 $75 $50 $75
Secular
Mean Median $138 $144 $137 $50 $50 $50
Online religion donations are shown, but the number of donations is fewer than 30. No firm conclusions can be drawn comparing online religion giving to any other type of donation.
Source: American Express Charitable Gift Survey, 2008.
Trends in individual giving and innovation: American Express Charitable Gift Study
Source: American Express Charitable Gift Survey, 2008.
Comparative data on sector size and sources of funding (mid 1990’s)
Source: Salamon, M.L., W. Sokolowski and R. List. Global Civil Society: An Overview. Eds. M.L. Salamon et al. Global Civil Society. Dimensions of the Nonprofit Sector. New York: Kumarian Press, 2004.
Role of international remittances in Mexican philanthropy In recent years, the largest receivers of remittances were India, China, and Mexico. While India and China witnessed huge remittance increases, flows to Mexico remained relatively stable. • Remittances to India grew from $37 billion in 2007 to $52 billion in 2008. Remittances to China increased from $26 billion in 2007 to $49 billion in 2008.
• Remittances to Mexico remained basically stable, at $26 billion in 2008 The single largest country recipient of U.S. remittances was Mexico, which received an estimated $24.2 billion in remittances from the United States in 2008, down nearly $1 billion from the updated 2007 figure of $25.1 billion.
Source: Dilip Ratha, “Migration and Remittances Trends 2009,” Migration and Development Brief 11, World Bank, Migration and Remittances Team, November 3, 2009. Index of Global Philanthropy and Remittances 2010.
Role of US grants in Mexican philanthropy
Source: Michael D. Layton. Philanthropy and the Third Sector in Mexico: The Enabling Environment and Its Limitations. NORTEAMÉRICA. Year 4, number 1, January-June 2009.
Role of individual giving in Mexican philanthropy In Latin America (including Mexico), high net worth individuals gave contributions were approximately 3% of their portfolios. In 2006, North Americans gave 7.6% of their portfolios, more than a 20% increase from 2005 levels.
In Mexico there's no estate tax, so there's much less incentive to give than in the U.S.
Carlos Slim Helú, the richest individual in the world, is involved in philanthropy but is skeptical of it and has not agreed to the Buffett-Gates pledge. • Some think his charitable efforts could inspire other wealthy families in Latin America, where large-scale philanthropy isn't common.
Source: The Merrill Lynch and Capgemini 2007 World Wealth Report. Michael D. Layton. Philanthropy and the Third Sector in Mexico: The Enabling Environment and Its Limitations. NORTEAMÉRICA. Year 4, number 1, January-June 2009.
Role of corporate philanthropy in Mexico Corporate philanthropy has emerged as the largest component of organized philanthropy. It is still relatively informal • Half of the companies are not required to file applicants to be authorized donees. • There are relatively little requirements in terms of evaluation and follow-up.
Source: Michael D. Layton. Philanthropy and the Third Sector in Mexico: The Enabling Environment and Its Limitations. NORTEAMÉRICA. Year 4, number 1, January-June 2009. |
P. Carrillo, M. Layton and M. Tapia. 2008. “Filantropía Corporativa ‘a la mexicana’,” Foreign Affairs en Español, 8(2).