Charitable Giving

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Formal Giving
Government Promotes Private Giving
Where American Dollars Go
A Generational Shift

Life Issue History

There are two ways to try to make life better for others. One is philanthropy, which is tax deductible. The other is through politics in which our representatives can spend our tax dollars to help what we care about and pass laws to make life fairer. The United States has had a long history of philanthropy. We have been a people inclined to give of ourselves through our time, our possessions, and our money.

Formal Giving

In addition to just helping people we know, there is a history of formal philanthropy. One of the earliest organized campaigns for giving is the United Thank Offering, created in 1887 by the Episcopal Church. Christmas Seals was founded in 1907. the Boy Scouts, Goodwill, and National Association for the Advancement of Colored People were founded between 1909 and 1913. The Rockefeller Foundation was established in 1913.

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A breakthrough from thinking of giving as only a private act, was a shift to making giving a matter of public policy. Tax deductions for gifts were first allowed in 1917. Direct giving grew and, incidentally, pew rentals in churches began to dwindle in the 1920's. In 1935, during Roosevelt's New Deal following the depression, corporations were allowed to claim a charitable tax deduction. World War II resulted in the creation of many non-profit relief programs.

In 1969, Congress passed the laws allowing individuals to combine charitable giving with life insurance, thereby postponing taxation. These are life income instruments, such as Charitable Gift annuities and Charitable Remainder Trusts.

Tax-exempt organizations designed to give relief to community and national needs are increasingly matched by foundations, designed to help wealthy individuals and corporations to target their giving to particular causes and evaluate the agencies that perform direct services. There were over 3.470 foundations in 1999 compared to 97 in 1900. In 2001, the September terrorist attacks stimulated the greatest outpouring of emergency giving in history - over $1 billion.

In 2000, there was $203.4 billion given to non-profits in the form of charitable giving. Of these dollars, 75% came from individuals, 12% from foundations, 8% from bequests, and 5% from corporations.

The competition for the philanthropic dollar, and time, has changed greatly over the past 100 plus years. As the 20th century dawned, one's church received the bulk of donations. There was little competition for there were few colleges, hospitals, and museums. Today, the church is no longer the priority, donations are shared with others. Church giving as a percentage of total giving in the USA continues to decline.

There are now over 7,000,000 agencies seeking charitable dollars in the United States. The average college-educated North American is asked to give away money 300 times per year.

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Philanthropy: The competition for the philanthropic dollar, and time, has changed greatly over the past 100 plus years. As the 20th century dawned, one's church received the bulk of donations. There was little competition for there were few colleges, hospitals, and museums. Today, the church is no longer the priority, donations are shared with others. Church giving as a percentage of total giving in the USA continues to decline.

Where did the $203.4 billion in the year 2000 go? 36.5% went to religious organizations (this includes both local churches and organizations such as the Salvation Army), 18.1% to Health and Human Services, 13.9% to Education, 11.4% to Art and Culture, 3% to the environment, 1.3% to International Affairs, and 15.8% to foundations. The percentage to foundations has been growing quickly with the creation of small family foundations and Donor Advised Funds.

Donor Advised Funds are a relatively new vehicle for making charitable gifts. To create a donor advised fund, an irrevocable gift is made to the fund and for this, you maintain the right to advise the trustee of the fund how you would like the income distributed. This is one of the fastest areas of growth in charitable giving.

Political Contributions: Politics is our nation's way of giving and receiving as a society. Oliver Wendell Holmes said, "taxation is the price we pay for civilization." Much of the growth in public giving is from groups of like-minded individuals who band together to pool their money and their lobbying efforts to support the issue they care most about, such as the environment, public schools, women's health, etc. All groups that target specific issues are "special interests".

Individuals continue to give large sums of money to campaigns on all levels. The costs to run campaigns continue to grow, particularly to pay the privately owned television networks for advertising time at competitive rates with consumer advertising.

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A startling historical shift occurred in political giving when the Watergate scandal in the Nixon administration turned off a whole generation from politics, and the next generation, their kids, was, therefore, never turned on to politics. Now we see the emergence of such awareness programs as MTV's Rock the Vote and WomenMatter.

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