Charitable Donations by Americans Reach Record High

By Jeffrey Thomas
USINFO Staff Writer

Washington - Americans increased their charitable donations significantly in 2006 to more than $295 billion - a record, according to a study released June 25 by the Giving USA Foundation, which reports on charitable contributions.

The overwhelming majority of this money was donated by individuals, not corporations or foundations, according to the chairman of Giving USA, Richard Jolly. Donations from individuals, including bequests, accounted for 83.3 percent of total giving last year, or $245.8 billion, he told USINFO.

“The total amount of money that was given to nonprofit institutions is remarkable,” Jolly said. “What we see is when people feel engaged, when they feel a need is legitimate, when they are asked to support it, they do.”

Americans have a long tradition of charitable giving and volunteerism - the donation of time and labor on behalf of a cause. When disasters happen or a social need arises, government clearly has a responsibility, Jolly said. “But it’s also obvious Americans believe they, too, can make a difference, and they reflect that in terms of giving away a lot of money.”

The United States is “a land of charity,” says Arthur Brooks, an expert on philanthropy and a professor at Syracuse University’s Maxwell School, who sees charitable giving and volunteerism as the signal characteristic of Americans.

In 2006, Americans donated 2.2 percent of their average disposable, or after-tax, income, a figure above the 40-year average of 1.8 percent. Brooks told USINFO that he sees over the past 50 years “a trend toward greater charitable giving” in the United States.

Jolly noted that 2005 was an “atypical” year because of the unusual number of major disasters, including the tsunamis in Asia, the earthquake in Pakistan, and hurricanes Katrina and Rita in the United States. Comparing nondisaster giving in 2006 with nondisaster giving in 2005, “what we see is growth, after adjusting for inflation, of about 3.2 percent, and that’s a significant level of growth,” Jolly said.

Corporate contributions in 2006 declined 10.5 percent from the previous year, to an estimated $12.72 billion, a figure representing 4.3 percent of total donations. Part of the reason for the decline, according to Giving USA, was that corporations sharply increased their charitable contributions in 2005 because of the disasters that year, but then did not face the same level of calamity-driven need in 2006.

Other major categories of giving include foundation grants ($36.5 billion, 12.4 percent of the total) and charitable bequests ($22.91 billion, 7.8 percent).

The two largest categories of donations were to religious organizations, which received 32.8 percent of the total donations ($96.82 billion), and educational institutions, which received 13.9 percent ($40.98 billion). The fastest-growing field for donations was the arts, culture and humanities, which garnered 4.3 percent of the total ($12.51 billion), an increase of 6.5 percent over 2005.


A significant trend in charitable giving in 2006 was the giving of large sums, most famously investor Warren Buffet’s pledge to donate $30 billion over 20 years to the Bill and Melinda Gates Foundation. The Giving USA figures reflect the first installment of Buffet’s gift - $1.9 billion - as well as another $2 billion in megagifts by other wealthy individuals. These megagifts amount to a little more than 1 percent of total giving in 2006. Jolly sees the trend toward megagifts as positive “and something we want to watch going forward.”

At the same time, Jolly emphasized that 65 percent of U.S. households with incomes of $100,000 or less make charitable contributions. “Certainly, these very large megagifts are important, but so, too, are gifts from individuals who are not extraordinarily wealthy. We wouldn’t have the total we have were it not for gifts from across the spectrum of wealth.”

Americans long have preferred to donate their money through the private sector or to private charities. Of the $122.8 billion of foreign aid provided by Americans in 2005, the most current data available, $95.5 billion, or 79 percent, came from private foundations, corporations, voluntary organizations, universities, religious organizations and individuals, according to the latest annual Index of Global Philanthropy, which is published by a Washington research organization, the Center for Global Prosperity at the Hudson Institute. (See related article.)

The Giving USA report does not take into account the value of contributions Americans make in terms of time and labor. More than 61 million Americans volunteered for charitable and national service organizations in 2006, and about half of all Americans participate in volunteer activities each year, according to Brooks. Volunteerism is “a major cultural phenomenon in the U.S.,” Brooks says. (See related article.)

The Giving USA report was prepared by the Center on Philanthropy at Indiana University, which has studied philanthropic giving since 1965.

For additional information on philanthropy and charitable giving in America, see the electronic journal Giving: U.S. Philanthropy.

For more information about U.S. society and NGOs, see Volunteerism & Philanthropy.