The share of Americans giving to charity has fallen post-recession
28 October 2019 at 4:23 pm
A new report has explored the impact of the recession on charitable giving
The global financial crisis fuelled a 13 per cent decrease in the share of US households donating to charity, resulting in 20 million fewer households giving, new research shows.
A study by the Indiana University Lilly Family School of Philanthropy analysed the recession’s effect on charitable giving by exploring the differences before and after the crisis.
It found that while donor households gave about the same amount to charity before and after the recession (December 2007 to June 2009), the share of households giving fell from two-thirds in 2000 to just over half in 2016.
Jane Greenfield, the president of Vanguard Charitable, said finding ways to create meaningful engagement with different communities remained key to sustaining existing donations and encouraging new generations to give.
She said the research showed that even during economic downturns, many donors continued to give and support their favourite charities.
“In the years since the Great Recession, many donors have exhibited tremendous resilience in supporting the causes that they care about during a period of prolonged economic uncertainty,” Greenfield said.
“In the face of evolving giving patterns, macroeconomic volatility, shifting demographics, and the proliferation of new fundraising technologies, this report reveals relationships still rule the day.”
The report found there was a major decline in the percentage of income given in households led by people with less than a high school education, under US$50,000 (A$73,000) in income, and/or under US$50,000 in wealth.
It found that older generations contributed a significantly greater share of their income to charitable causes than younger people.
In the years post-recession, the Greatest Generation (born between 1910 and 1924) contributed 8.8 per cent of their income, while millennial-led households contributed 0.9 per cent of their income.
Associate dean Una Osili, from the Lilly Family School of Philanthropy, said these results offered both challenges and opportunities for not for profits and the donors who supported them.
“As one of the first studies to examine in detail the percent of income various types of households gave, the report also provides new insights into which households increased the share of income they gave, and which held steady or decreased,” Osili said.
This drop in the share of households giving has also occurred in Australia.
Recent analysis on Australian tax data found the overall amount donated to charity in 2016-17 hit a record $3.5 billion, but the percentage of taxpayers donating dropped to 32 per cent – the lowest amount in 15 years.