Bienvenida welcome. Patrick Rooney Executive Director Center on Philanthropy at Indiana University ...

bienvenida

welcome

Patrick RooneyExecutive Director Center on Philanthropy at Indiana University

Professor of Economics and Philanthropic Studies Indiana University Purdue University Indianapolis

[email protected]

mailto:[email protected]

About The Center on Philanthropy

Mission:

Increasing the understanding of philanthropy, improving its practice, and enhancing participation in philanthropy in the US and around the world.

Mantra:

Research informs practice & Practice informs research.

Largest, most comprehensive academic center on philanthropy

• Staff ~ 50

• Faculty ~ 60 professors at Indiana University

• Fundraising training faculty ~ 50

• Budget ~ $10 million/year

• Programs regularly offered in U.S. and

internationally



Five core program areas•Research•Academic Programs•Public Service and The Fund Raising School

(TFRS)•Public Affairs•Philanthropic Services

o Women’s Philanthropy Instituteo Lake Institute on Faith & Givingo Third Millennium Initiative

About The Center on Philanthropy: Going global in all that we do

The Fund Raising School (TFRS) taught courses or workshops recently in: • Beijing, China• Cairo, Egypt• Dublin, Ireland• Istanbul, Turkey• Madurai, India• Singapore• Vienna, AustriaAcademic exchange program: University of Bologna,

Italy.

About The Center on Philanthropy and Procura:The original agreement between the Center on

Philanthropy and Procura was signed on November 13, 1995.

• TFRS begun training trainers in Mexico.

• Procura translated the first version of 101 into Spanish.

• New translations as courses were added to curriculum.

Dr. Timothy Seiler, the Director of the Fund Raising School, spoke at Procura’s 10th anniversary celebration in 2005.

Development of a formal relationship between one of the universities in Mexico, Procura, and The Fund Raising School.

The Center on Philanthropy invited presenters from Mexico to The Fund Raising School faculty meetings.

Procura and the Center on Philanthropy had to revised some provisions of the agreement in the time of financial strain.

About The Center on Philanthropy and Procura:

Long-term trends in philanthropy:Session Outline

•Total giving in the U.S.

•Individual giving in the U.S. (biggest share of total giving)

•Giving in Mexico

•Questions and Answers

The role of philanthropy in financing the Nonprofit Sector O'Neill (2002) estimates that private gifts and

grants play an important role with 20% of the total revenue for the nonprofit sector.

Philanthropy is only the third most important funding source for US nonprofits on average. • "Payments for services" is the largest income

generator at 40%.

• Followed by the government at 35%.

• "Other" rounds out the funding picture with 5% of total revenues.

Total giving as a percentage of GDP, 1969–2009

Source: Giving USA Foundation TM/Giving USA 2010 *Data are rounded.

$ in billions

Total giving adjusted for inflation, 1969-2009

Source: Giving USA Foundation TM/Giving USA 2010 *Data are rounded.

Where did the money come from (in 2010)?

Source: Giving USA Foundation TM/Giving USA 2010* Druckenmiller, Bloomberg, Gates, Soros, and Nippert

Giving fell among three of the four sources: individuals, foundations, and bequests.

Surprisingly, giving by corporations is estimated to have increased. Up to one-third of corporate giving is in-kind. That is less subject to economic pressures than cash giving.

Corporate giving rose to an estimated $14.1 billion, up 5.5 percent (5.9 percent adjusted for inflation). This unexpected bounce takes corporate giving to within 1 percent of its pre-recession level.

Five individual donors* gave a total of $1.6 billion. Without that, giving would have fallen by more than 1 percent (current $). We can confirm these gifts were paid (Slate.com) and nearly all of that money went into foundations. So, charities don’t see that increase yet.

Sources 1968 2008 Percent Change

Household 91.27 229.28 151%

Bequests 9.90 22.66 129%

Corporations 5.57 14.50 160%

Foundations 9.90 41.21 316%

Total 116.64 307.65 164%

Where did the money come from?Change over time by source

Source: Giving USA 2009. (in billions of inflation adjusted dollars)

Uses 1968 2008 Percent Change

Religion 52.10 106.89 105%

Education 14.73 40.94 178%

Human Services 14.29 25.88 81%

Health 12.87 21.64 68%

Public society benefit 2.66 23.88 798%

Arts, culture, humanities

3.71 12.79 245%

International affairs n/a 13.30 n/a

Environment/animals n/a 6.58 n/a

Gifts to foundations n/a 32.65 n/a

Gifts to individuals n/a 3.71 n/a

Unallocated 16.27 19.39 19%

Total 116.65 307.65 164%

Where did the money go to?Change over time by recipient organization

Source: Giving USA.

(in billions of inflation adjusted dollars)

$0

$50

$100

$150

$200

$250

$300

$350

1967 1972 1977 1982 1987 1992 1997 2002 2007

Year with at least one month of recession

"Slowdown" year

Recession in year of 8 months or more

*Showing recession years and years with decreases

Giving during recession: Total giving, inflation-adjusted, in billions of dollars, 1967–2007

Source of Giving

% of Total Giving

% Drop during recess.

Individuals 80% -3.9%

Foundations

10% -0.1%

Corporations

5% -1.6%

Total 100% -1.0%

Average drop in giving during years of 8 months or more of recession

Source: 2009.

Short-term trends in total giving

Source: Giving USA Foundation TM/Giving USA 2010

Giving fell in 2009 - a drop of 3.6 present-dollar value decline in giving. But not as much as it could have, given the tough economy and job market.

Largest decline in Giving USA’s history in CURRENT DOLLARS but NOT the largest adjusted for inflation. The largest drop adjusted for inflation was in 1974 (-5.5 percent).

This was the third year that giving exceeded $300 billion.

Different organizations had different experiences.

Long-term (40-year) trends in total givingTotal giving increases, on average, 2.8% (adjusted

for inflation). Increases 4.3% per year in non-recession years!

On average, all subsectors see long-term growth in charitable gifts received.

Individuals account for three-quarters of total giving.

For secular-only results, individuals account for about 60% of total.

Giving averages about 2% of GDP, moving from a low of 1.7% in the 1980s to 2.4% in 2005.

In all years, in all economic times: some organizations see a drop in giving; some see an increase; others stay the same.

What to anticipate in future years

Giving will recover as the economy recovers, although with a lag.

We know from prior recessions that giving returns to pre-recession levels three to five years after the end of the recession.

It might take longer after this recession – most economists are predicting a slow recovery, with very gradual reductions in unemployment.

Source: Giving USA, 2010.

Trend in giving by individuals, 1967–2007

64.5347.63

29.5513.41

87.7124.20

19.37

172.40

229.03

96.0883.24

102.34117.78

101.09

129.60

160.44

199.25

1967 1972 1977 1982 1987 1992 1997 2002 2007

64.5347.63

29.5513.41

87.7124.20

19.37

172.40

229.03

96.0883.24

102.34117.78

101.09

129.60

160.44

199.25

1967 1972 1977 1982 1987 1992 1997 2002 2007

Current dollarsInflation-adjusted dollars

Real rate of growth

$ in billions$ in billions

Estimating individual charitable givingUsing historical data from IRS and other federal

sources and comparing estimating models for GUSA, we found the following:

• The strongest predictor of individual giving is the S&P 500.

• Suggests that a 100 point increase in the S&P 500 is associated with a $1.7 billion increase in charitable deductions, holding income, tax rates, etc constant.

Source: Deb, Wilhelm, Rooney, and M. Brown (2003)

Estimating individual charitable giving

• Personal Income is the second biggest predictor of household giving.

• A $200 billion increase in real (inflation-adjusted) personal income is associated with a $1 billion increase in charitable deductions, holding the S&P 500 and tax rates, etc., constant.

• Charitable giving persists from year to year: last year’s giving is a good predictor of this year’s giving.

Source: Deb, Wilhelm, Rooney, and M. Brown (2003)

Trends in individual giving and demographics:total population size

Source: U.S. Department of Commerce, Economics and Statistics Administration Bureau of the Census. Population Projections of the United States by Age, Sex, Race, and Hispanic Origin: 1995 to 2050. Current Population Reports. February 1996.

By 2050, the population may increase to 394 million—a 50 percent increase from the 1995 population.

Despite these large increases in the number of persons, the rate of population growth is projected to decrease during the next five decades by about one-third. After 2025, the United States would grow more slowly than ever before.

Trends in individual giving and demographics: gender

Women are 50% of workforce, and employed women are some of the most likely donors. Gender distribution is not even across industries and professions.

Single men and single women give about the same on average ($924 vs. $962).

After controlling for income, education, etc, single women are much more likely to give at all and to give more.

Similarly, even after controlling for income, etc., married couples are more likely to give and to give more than single men.Source: Giving USA, 2010; America Gives.

Trends in individual giving and demographics: race

Source: U.S. Department of Commerce, Economics and Statistics Administration Bureau of the Census. Population Projections of the United States by Age, Sex, Race, and Hispanic Origin: 1995 to 2050. Current Population Reports. February 1996.

Although nearly three-quarters of the population was non-Hispanic White in 1995, this group may be declining in size after 2030.

By the middle of the next century the Black population would nearly double its 1995 size to 61 million. After 2016, more Blacks than non-Hispanic Whites would be added to the population each year.

The race/ethnic groups with the highest rates of increase would be the Hispanic-origin and the Asian and Pacific Islander populations with annual growth rates that may exceed 2 percent until 2030. In comparison, even at the peak of the Baby Boom era, the total U.S. population never grew by 2 percent in a year.

Trends in individual giving and demographics: raceMean levels of giving by whites is 41% more than minorities ($1,572 vs. $1,114).

After controlling for income, education, etc., differences go away. Differences are income and education differences, not racial differences.

Found significant racial and gender differences in how respond to different survey methods.

Source: America Gives, Rooney, Mesch, Chin, and K. Steinberg (2005).

Trends in giving as a share of selected types of personal outlays and personal income ,1967–2007

2.3%2.2%2.2% 2.1%1.8%2.3% 2.1% 2.0% 1.9%

7.4%7.3%6.6%5.8%5.6% 5.5%5.4%6.0% 6.0%

19.6%18.2%

16.6% 16.5%15.2% 14.6%

16.3% 17.1% 17.5%

1967 1972 1977 1982 1987 1992 1997 2002 2007

2.3%2.2%2.2% 2.1%1.8%2.3% 2.1% 2.0% 1.9%

7.4%7.3%6.6%5.8%5.6% 5.5%5.4%6.0% 6.0%

19.6%18.2%

16.6% 16.5%15.2% 14.6%

16.3% 17.1% 17.5%

1967 1972 1977 1982 1987 1992 1997 2002 2007

Disposable personal income

“Essential” personal outlays: clothing, energy, food (excluding restaurants and alcohol), housing, and home operations, to 2006

“Luxury” personal outlays: alcohol, international travel, jewelry/watches, recreation, restaurants, tobacco, to 2006

Gifts captured on Million Dollar List made by individuals (number)

Source: Center on Philanthropy.

Total Charitable Giving by High Income HouseholdsEstimated Total = $126b (in billions)

Source: The Bank of America Study of High Net-Worth Philanthropy, 2006.

Motivators Ranked as Important by High Net-Worth Households


Percentage of High Net-Worth Households Reporting

They Would Give More to Charity if the Following Occurred


Average Giving: Total, Secular and Religious by Income

High Net-Worth Households, 2005 (donor households only)


Average Giving: Total, Secular and Religious by Wealth




Average Giving: Total, Secular and Religious by Source of Net-Worth


Trends in individual giving and innovation: Philanthropic Giving Index ReportPGI reports steady rise in success of Internet

fundraising.Below 10 percent in 2000. Rose to 22 percent in summer

2007.Growth in success can be explained in these ways:• More people are giving online.• Same people are giving online but making more gifts or

making larger gifts online.• More organizations are asking for donations online and

getting small contributions (so that success means going from zero to something) without any fundamental change in donor behaviors.

• Perhaps other causes as wellSource: American Express Charitable Gift Survey, 2008.

Trends in individual giving and innovation: American Express Charitable Gift Study5.9 percent of adults in the United States gave

online in 2008. One in ten donors gives online currently. 64 percent of online donors cited convenience as

a reason for online giving.

• True for all ages of online donors and for all income levels of online donors.

Charities themselves have an important role to play. 20 percent said that they gave online in response to something the charity initiated.

Source: American Express Charitable Gift Survey, 2008.

Trends in individual giving and innovation: American Express Charitable Gift Study

All Religion Secular

Mean Median Mean Median Mean Median

Both $172 $50 $284 $75 $138 $50

Online $165 $50 $334 $50 $144 $50

Offline $174 $50 $280 $75 $137 $50

Online religion donations are shown, but the number of donations is fewer than 30. No firm conclusions can be drawn comparing online religion giving to any other type of donation.


Trends in individual giving and innovation: American Express Charitable Gift Study


Comparative data on sector size and sources of funding (mid 1990’s)

Source: Salamon, M.L., W. Sokolowski and R. List. Global Civil Society: An Overview. Eds. M.L. Salamon et al. Global Civil Society. Dimensions of the Nonprofit Sector. New York: Kumarian Press, 2004.

Role of international remittances in Mexican philanthropy

Source: Dilip Ratha, “Migration and Remittances Trends 2009,” Migration and Development Brief 11, World Bank, Migration and Remittances Team, November 3, 2009. Index of Global Philanthropy and Remittances 2010.

In recent years, the largest receivers of remittances were India, China, and Mexico. While India and China witnessed huge remittance increases, flows to Mexico remained relatively stable.

• Remittances to India grew from $37 billion in 2007 to $52 billion in 2008. Remittances to China increased from $26 billion in 2007 to $49 billion in 2008.

• Remittances to Mexico remained basically stable, at $26 billion in 2008

The single largest country recipient of U.S. remittances was Mexico, which received an estimated $24.2 billion in remittances from the United States in 2008, down nearly $1 billion from the updated 2007 figure of $25.1 billion.

Role of US grantsin Mexican philanthropy

Source: Michael D. Layton. Philanthropy and the Third Sector in Mexico:The Enabling Environment and Its Limitations. NORTEAMÉRICA. Year 4, number 1, January-June 2009.

Role of individual giving in Mexican philanthropy

Source: The Merrill Lynch and Capgemini 2007 World Wealth Report. Michael D. Layton. Philanthropy and the Third Sector in Mexico:The Enabling Environment and Its Limitations. NORTEAMÉRICA. Year 4, number 1, January-June 2009.

In Latin America (including Mexico), high net worth individuals gave contributions were approximately 3% of their portfolios.

In 2006, North Americans gave 7.6% of their portfolios, more than a 20% increase from 2005 levels.

In Mexico there's no estate tax, so there's much less incentive to give than in the U.S.

Carlos Slim Helú, the richest individual in the world, is involved in philanthropy but is skeptical of it and has not agreed to the Buffett-Gates pledge.

• Some think his charitable efforts could inspire other wealthy families in Latin America, where large-scale philanthropy isn't common.

Role of corporate philanthropyin Mexico

Source: Michael D. Layton. Philanthropy and the Third Sector in Mexico:The Enabling Environment and Its Limitations. NORTEAMÉRICA. Year 4, number 1, January-June 2009. | P. Carrillo, M. Layton and M. Tapia. 2008. “Filantropía Corporativa ‘a la mexicana’,” Foreign Affairs en Español, 8(2).

Corporate philanthropy has emerged as the largest component of organized philanthropy.

It is still relatively informal

• Half of the companies are not required to file applicants to be authorized donees.

• There are relatively little requirements in terms of evaluation and follow-up.

preguntas y respuestas

questions and answers

gracias

thank you

Bienvenida welcome. Patrick Rooney Executive Director Center on Philanthropy at Indiana University ...

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