November 20, 2017
 
Charitable Giving Likely to Rise 3.6% this Year

January 16, 2017 — If Bay State conditions reflect national charitable giving trends, Massachusetts nonprofits should see a 3.6% rise in donations this year, and even more growth next year, according to a newly issued report.

Charitable giving in the U.S. is predicted will grow 3.8% in 2018, according to The Philanthropy Outlook 2017 & 2018, a new report released last week by the Indiana University Lilly Family School of Philanthropy.

The forecasted growth in charitable giving is greater than the projected 2.4% rate of inflation for 2017.

Changes in total giving for 2017 and 2018 are predicted to exceed the most recent 10-year annualized average increase in giving of 0.5%, but will be below the most recent 25-year and 40-year annualized averages.

In general, increases in the U.S. economy, as reflected in the value of stocks, gross domestic product, and household income, will lead to a rise in philanthropic giving in 2017 and 2018.

Amir Pasic, dean of the school, said, “Our research indicates that all types of donors—individuals, foundations, corporations, and estates—are likely to increase their giving in each of the next two years. Nonprofit organizations and the people they serve can find encouragement in the anticipated expansion of giving.”

According to the report:
  • Growth in giving by foundations will lead the way in both years (5.9% in 2017 and 6.0% in 2018).
  • Estate giving is expected to increase by 5.4% this year and 5.2% next year.
  • Giving by individuals is predicted to grow 3.0% and 3.2% respectively.
  • Giving by corporations will lag behind the other sources of giving, rising by just 2.4% and 2.7% respectively.
“As we consider the outlook for 2017 and 2018, it’s important to note that individuals continue to play a leading role in driving both giving trends and growth in giving,” said Una Osili, director of research for school. “Individual donors are responsible for the majority of charitable giving, as well as the increase in foundations, donor advised funds and other innovations in giving.”

Giving to health is predicted to grow by 8.5% in 2017 and 7.9% in 2018, exceeding historical annualized averages over the most recent 40-year period. Anticipated increases across various consumer spending categories and an overall positive increase in the U.S. economy will influence the rise in giving to health.

Giving to education is projected to rise 6.3% in 2017 and 6.0% in 2018, continuing the strong growth trends realized in recent years. Giving to education includes giving to support education at all levels, including higher education; libraries; educational research; educational support services; and many similar types of organizations. Multi-million-dollar gifts and billion-dollar campaigns across public and private universities have positively influenced growth in this subsector in recent years.

Giving to education is projected to rise 6.3% in 2017 and 6.0% in 2018, continuing the strong growth trends realized in recent years. Giving to education includes giving to support education at all levels, including higher education; libraries; educational research; educational support services; and many similar types of organizations. Multi-million-dollar gifts and billion-dollar campaigns across public and private universities have positively influenced growth in this subsector in recent years.

The report used an econometric methodology that identified 25 key predictors of giving, noting that s changes in tax policy or other public policy as a result of the recent presidential and congressional elections or significant changes in the global or U.S. economy could affect the predictions for giving.

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