Philanthropy is the latest sign that the rich are getting richer
The US cleared a generous milestone in 2017, with Americans donating a record amount to charity. But the numbers are also a reminder of the persistent gap between rich and poor.
Charities raked in $410.2 billion from generous Americans last year, but much of that money came from the richest households, according to Giving USA’s annual report on philanthropy.
For several decades, about two-thirds of American households consistently gave to charity. But that rate fell during the Great Recession, said Una Osili, the associate dean for research and international programs at Indiana University’s Lilly Family School of Philanthropy. Osili was a co-author of the Giving USA report.
“Some households, primarily lower-income, lower-education and younger households, haven’t recovered as well from the recession and still aren’t giving as much as they used to,” Osili said.
Since the recession ended in 2009, charitable giving increased 30.6 percent, but wealthier households are mainly donating. In 2015, the most recent year for which data was available, 51.6 percent of charitable donations came from households with annual incomes of $100,000 and above, IRS figures show.
In fact, fewer households overall are now giving money to charitable organizations, but those who do give are giving more. “Donors are down, but dollars are up,” Osili said.
A strong stock market bodes well for charities
Gross domestic product growth and strong returns for S&P 500 Index last year helped fuel the jump in donations to charities, Giving USA’s report found.
Some worry the good times may not last in philanthropy. Nonprofits fear the new tax law could discourage people from donating to charities, to the tune of $21 billion a year.
Among more than 800 high-net-worth and ultra-high-net-worth people surveyed in the 2017 US Trust Insights on Wealth and Worth survey, 74 percent reported donating to nonprofit organizations. US Trust Bank of America Private Wealth Management is a subsidiary of Bank of America.
Tech tycoon couples are heavy hitters
These couples topped the Chronicle of Philanthropy’s Philanthropy 50 list of American’s biggest donors: Microsoft founder Bill and Melinda Gates took the No. 1 spot, donating $4.8 billion to their foundation in 2017. No. 2 was Facebook CEO Mark Zuckerberg and his wife Priscilla Chan, who gave $2 billion to their foundation and donor-advised fund, followed by Michael and Susan Dell, who contributed $1 billion to their foundation.
A surge in cryptocurrency donations
One anonymous donor announced his or her intention in December of giving 5,057 bitcoins to charity, and ultimately donated a total of $53 million, to 59 organizations.
Millennials lag behind other age groups when it comes to donating
Instead, they tend to approach charitable giving “holistically,” Giving USA’s report said. They see their entire lifestyle as an opportunity to give to charity, from taking jobs they’re passionate about to supporting businesses or buying products that claim to have a social justice mission, Osili said.
Increase to private family foundations
There was a 15.5 percent increase in donations to private family foundations in 2017 (entities that wealthy families establish for themselves) as well as a jump in giving to donor-advised funds, a charitable giving tool that higher-income households use.
Giving to a donor-advised fund lets someone set aside money for charity, and get the tax deduction, without specifying immediately which nonprofit group will get that money.
“When the economy is strong, it’s a time when high net worth individuals can determine they want to put money aside for philanthropy, but may not have made the decision on where they ultimately want to distribute it,” said Aggie Sweeney, Giving USA’s board chair.
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