IGM Press Release May 2010
2009 Household Charitable Giving Down Five Percent from 2008
May, 2010 - Individual charitable giving in 2009 amounted to $217.3 billion, a decline of $11.2 billion or 4.9 percent in current dollars from the estimated $228.5 billion total in 2008, according to the latest report by researchers at the Center on Wealth and Philanthropy at Boston College and published by the Association of Fundraising Professionals. In inflation adjusted dollars, the decline between 208 and 2009 is 4.6%; and this is in addition to the Center's calculation of an inflation adjusted decline from 2007 to 2008 of 6.1%. This makes a total decline in inflation adjusted dollars of 25.3 billion between 2007 and 2009.
For 2010, the researchers project annualized individual giving totals (also known as household giving) will range between approximately $222 billion and $227 billion, an increase between 3 and 4.5 percent over the estimated total for 2009. The projected growth is based on analysis of the first two quarters according to scenarios that assume relatively low and high economic growth.
The full report will be published in the July/August 2010 issue of Advancing Philanthropy, the magazine of the Association of Fundraising Professionals. The report's findings are based on estimates produced quarterly by the Individual Giving Model developed and housed at the Center on Wealth and Philanthropy. It is the nation's first model designed to estimate future and real-time charitable giving by households on a quarterly basis.
The Individual Giving Model estimates how the most recent changes in financial resources affect the aggregate level of household giving which excludes charitable giving from foundations, corporations, or bequests from estates. The IGM is designed to be calibrated annually and modified every three months, based on data that are released quarterly or more frequently, such as price and market indices, along with components of income and worth.
Launched last year, the IGM was constructed by CWP Senior Research Associate John J. Havens and Director Paul G. Schervish to provide more current and potentially more accurate indicators of how charitable giving is progressing on a national basis. This is especially useful for charities and other fundraisers, which previously had to rely on annual estimates. This is the second estimate report issued based on the IGM.
For the new report, Schervish and Havens expanded and recalibrated the IGM based on information available as of April 15, 2010. The findings are based on data from the Federal Reserve, the Bureau of Economic Analysis, the Bureau of Labor Statistics, the National Associations of Realtors, Standard and Poor's, Dow-Jones, and a variety of other sources of data in the public domain.
"The Individual Giving Model is still in the development and testing stage but we believe the model's estimates nevertheless provide near real-time guidance concerning the state of individual charitable giving," said Havens.
"We're very optimistic about the growth in charitable giving in 2010 predicted by the Individual Giving Model," said Paulette V. Maehara, CFRE, CAE, president and CEO of AFP. "The research developed by the Boston College Center on Wealth and Philanthropy certainly corresponds with what fundraisers experienced last year and what we're seeing so far in 2010. I believe the Giving Model will be an imporant tool for fundraisers, especially as it is refined even further in the future."
"I share Paulette Maehara's optimism," said Schervish. "2010 may just turn out to be the beginning of good news for fundraisers and charities. But it may not be until 2011 that we see the amount of individual giving returning to its pre-recession 2007 purchasing power.
As Havens explained, "Our IGM shows that individual giving declined in real purchasing power an additional 5 percent in 2009 over and above the 6 percent loss in 2008. So it will be some time before we can reverse these declines. Fortunately, charritable giving in the first two quarters of 2010 seems to be on an uptick. However, growth may not continue the rest of the year if the fiscal crisis in Europe brings a second recessionary dip to the United States."