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Research Friday: So ... What About These Numbers?
Friday, September 14, 2012
Welcome to Research Friday! As part of a continuing series, we invite a nonprofit scholar, student, or professional to highlight current research reports or studies and discuss how they can inform and improve day-to-day nonprofit practice.
While driving to work recently I heard an NPR report about philanthropic giving in the US; but it was not the numbers I had just read in Giving USA 2012 published by the Giving USA Foundation and compiled by the Center on Philanthropy at Indiana University. Listening further, I learned this was a report of a study just recently published by The Chronicle of Philanthropy, using data on giving from 2008.
Both Giving USA and The Chronicle of Philanthropy are reputable sources of information, but the way each measures philanthropic giving for their reports differs – significantly. Both provide valid information, although in this instance it was for two different years, thus it is important that we know these differences, understand them, and appreciate what learnings we can glean from them.
The Chronicle of Philanthropy’s report follows on the heels of Giving USA’s 2012 report for 2011 giving, where the total current individual giving was reported to be $217.79 billion.1 But let’s compare their numbers for 2008, the year for which the Chronicle recently reported.
Giving USA’s number for individual giving in 2008 is $214 billion. The Chronicle of Philanthropy’s report estimates that individuals gave $135 billion in 2008. This equates to 63% of what Giving USA estimates individuals contributed in 2008.2
Why the difference?
The Chronicle of Philanthropy studied the exact dollars contributed by taxpayers as reported to the IRS for 2008. These were contributions deducted from income by the taxpayers on Form 1040, Schedule A. A note of interest is that income tax itemizers represent about 30% of taxpaying units.3 This study likely represents fewer taxpaying units, because it includes only itemized taxpayers who reported incomes of $50,000 or more.
Giving USA uses a complicated matrix of economic indicators that have developed over time – actually starting some 50 years ago when it began tracking philanthropic giving. These data sources include (but are not limited to) the IRS, the Bureau of Economic Analysis, the Foundation Center, the S&P 500 Index, historical trends in itemized giving, and personal income tax rates. For a full explanation of the methodology used, reference any Giving USA report.4
There is a considerable amount of additional information available from the Chronicle of Philanthropy’s report that is not included in Giving USA. For example, one can access statistics on giving by metropolitan area, by the political persuasion of various geographic areas, by faith, by wealth indicators, etc. It is interactive and contains a great amount of data to mine.5
When speaking of data by state, the ASU Lodestar Center researches giving in Arizona, and we use an entirely different methodology. Our report on Giving and Volunteering for 2008, published in 2010, reports on household giving as determined through a web-based representative panel survey. It was organized by our Center in collaboration with the ASU Morrison Institute and Knowledge Networks, a firm that specializes in web-based surveys.6
Our research on household giving in Arizona in 2008 reports a total of $3.05 billion, with an average household contribution of $1,609.
The Chronicle of Philanthropy’s report lists Arizona as the 18th most generous State, giving $2.5 billion in 2008 with the average individual giving $2,436. Remember, the Chronicle’s number reflects only those individuals who deducted charitable contributions on their 1040 Tax Form and who had incomes of $50,000 or more.7
So … what is the bottom line?
Each report includes valuable information that may appeal to each user differently. We will use only numbers for 2008 in the table below in order to maximize comparability, but it is helpful to remember that 2008 was the first year individual giving had significantly decreased since 1970, the earliest year reported by Giving USA.
| Identification of donor population | Source of Data | Total Given |
|---|---|---|
| All philanthropic giving , including individuals, foundations, corporations (nationwide) | Giving USA 2011, revisions, pg. 73 | $299.81 billion (adj.) |
| All individuals only , current giving (nationwide) | Giving USA 2011, revision, pg. 73 | $213.96 billion (adj.) |
| Individuals who deducted charitable giving on their 2008 IRS 1040 forms AND who had incomes of $50,000 or more (nationwide) | Chronicle of Philanthropy Aug. 19, 2012 | $135.8 billion |
| Individuals who deducted charitable giving on their 2008 IRS 1040 forms AND who had incomes of $50,000 or more (Arizona) | Chronicle of Philanthropy Aug. 19, 2012 | $2.5 billion |
| Household charitable giving in 2008, (Arizona) | ASU Lodestar Center's Arizona Giving and Volunteering 2010 report, pg. 8 | $3.05 billion |
As the old saying goes, “the devil is in the details.” Thus, while this data are important and helpful to organizational and fundraising planning and strategy, we do need to be careful that we know what the data actually say. These numbers aren’t interchangeable - they represent different ways of determining the sources of individual philanthropy.
Philanthropic data continues to provide uplifting information: we are a generous society. Even in the very difficult 2008 year, our citizens were giving – generously – and they continued to give generously through the last findings from Giving USA, for 2011:
- Current giving by individuals was $217.79 billion, an increase of 3.9% over 2010, which increased by 2.7% over 2009.
- The total given by all sources (individuals, current and through bequests), foundations, and corporations was $298.42 billion, an increase of 4% over 2010, which increased by 3.8% over 2009.8
But, do remember there are several ways to develop giving information and there probably will be other reports from various sources. We just need to know what is being reported and the various methodologies for arriving at these very important numbers.
Patricia Lewis' role as Sr. Professional-in-Residence at the Lodestar Center is to help bridge academia and practice. She has a long career as a nonprofit executive and as a "pracademic," having previously served as President and CEO of the Association of Fundraising Professionals, Executive Director of Camp Fire Boys and Girls in Seattle-King County, Development Director of the Childrens' Home Society of Washington State, and as the Nonprofit Professional-in-Residence at George Mason University. She has written and lectured throughout the world about various leadership and management topics for the nonprofit sector.
Sources:
[1] Giving USA Foundation, Giving USA 2012, pg. 22
[2] Giving USA Foundation, Giving USA 2011, Vol. I. Pg. 73. See 2008 figures revised.
[3] Tax Policy Center, Urban Institute and Brookings Institute, Tax Notes, Microsimulation Model (Version 0509-1), Jan 17, 2011
[4] Giving USA Foundation, Giving USA 2011 Full Report, pg. 300
[5] http://philanthropy.com/americagives
[6] http://www.asu.edu/copp/nonprofit/flip_mags/GandV2010/index.html, pg 9
[7] http://philanthropy.com/article/Generosity-in-the-States/133707/
[8] Giving USA Foundation, Giving USA 2012