Philanthropy in the U.S. inches up - with exceptions

Charitable giving in America has recovered from the damage done by the Great Recession, with donations to schools, hospitals, social service agencies, cultural groups, and other nonprofits in 2014 reaching $358.38 billion, surpassing its pre-recession record.

But by one measure, giving from corporations to charity has dropped to its lowest level since the 1970s. U.S. corporate philanthropy, which includes grants from corporate foundations as well as in-kind gifts, was estimated to be 0.7 percent of corporate pretax profits in 2014, according to Giving USA's 60th annual report, researched by Indiana University's Lilly Family School of Philanthropy and released Tuesday.

The recovery in philanthropy has been proceeding slowly for five years, "but the increase last year, in 2014, blew me away," said Robert Evans, a fund-raising consultant on the editorial review board of Giving USA and president of the Evans Consulting Group in Willow Grove.

In inflation-adjusted dollars, 2007's total was $355.17 billion, which means giving in 2014, at $358.38 billion, was just a hair higher. Still, Evans said, "We had originally predicted that it would take 10 years to recover from the Great Recession, to be at levels equal to what you saw in 2007, the best year ever for giving, so we're ahead of schedule."

Though 2014 brought reassurance that philanthropy is a core mind-set for Americans - "it's in our DNA," Evans said - as a percentage of the gross domestic product (GDP), giving in 2014 remained within the traditional range, at 2.1 percent.

"We are happy that giving is at 2.1 percent. That being said, it's a little frustrating that we're stuck as a percentage of the GDP between 1.9 and 2.1 percent and we can't really dial the needle higher as a society," said Patrick Rooney, the Lilly school's associate dean of academic affairs and research.

Corporate giving was up nearly 14 percent over 2013 in actual dollars, but the dip relative to pretax profits comes as corporate riches have been reaching record levels for several years. If charitable giving in 2014 had ticked up along with profits, it could have been a banner year for corporate generosity. After-tax profits in the U.S. corporate sector in 2013 reached $1.7 trillion, or 10 percent of GDP - the highest level in at least 85 years.

Those dollars are not being proportionately passed on to charity for several reasons, Evans said. "For publicly traded companies, I think there is shareholder pressure to the bottom line, and management has been forced to respond and are cutting back in terms of charitable-giving activity," he said. "Number two is that America's corporations from the biggest down are reallocating funds, and some of the support that corporate entities are giving is being reflected in marketing and PR, where they sponsor events or do some other things that don't come out of the charitable pie."

Many corporations now lay claim to philanthropy that, strictly speaking, comes from others.

In Comcast's annual Corporate Social Responsibility Report, for instance, the company includes items like the cash value of toys collected through its Today show toy drive ($44.6 million in 2012), as well as actual gifts of cash from the company's foundations.

"Comcast has the unique ability to contribute cash, advertising, and many other resources, such as technology and training, to nonprofits," said a Comcast spokeswoman. "Our giving approach provides not only important cash funding, which has increased by 40 percent over the past three years, but also television advertising, which enables nonprofits to generate awareness about their cause, which can further drive contributions, membership recruitment, and other benefits. We strongly believe that our community investment philosophy - which intentionally extends beyond checkbook philanthropy - is significantly more powerful and impactful than just giving money."

Another example Evans cites of working "outside the charitable pie" is Delta Air Lines' breast cancer awareness campaign, in which Delta has sold pink lemonade and pink headsets on board planes, and solicited donations from passengers. The company said in a news release that last year, Delta's "support" raised $1.25 million for research, and that "since 2005, Delta's support has contributed more than $7.9 million to the Breast Cancer Research Foundation."

But the announcement did not say specifically whether Delta gave any cash itself, and, if so, how much. "Too many corporations are getting credit for being charitable while they clearly could be giving more," Evans wrote in a blog, pointing out that Delta netted $2.7 billion in profits in 2013.

Asked about support, a Delta spokeswoman said none of the money donated to the Breast Cancer Research Foundation actually comes from the corporation. Rather, it comes from employees and customers, she said.

Many companies are in fact becoming more innovative in how they achieve social good - corporations that fold social benefit into their mission, achieving some of the same goals as philanthropy, but under a different structure, such as B corporations.

"There is an overall trend in blurring the line between corporations focused solely on bottom-line profits and organizations with a dual purpose," said Katherina Rosqueta, founding executive director of the University of Pennsylvania's Center for High Impact Philanthropy. One firm building social mission into its identity from the start, she said, is eyeglass company Warby Parker, which devotes some of its profits to training workers in developing countries to give eye exams and provide eyeglasses at affordable prices.

Giving from corporations accounted for 5 percent of all charitable giving in 2014, according to the report, with 72 percent coming from individuals, 15 percent from foundations, and 8 percent through bequests.

Among recipients, religious groups received the largest percentage of charitable support, at 32 percent, or $114.9 billion. Education came in second at 15 percent, or $54.62 billion. The rest are human services (12 percent); gifts to foundations (12 percent); health (8 percent); public-society benefit (7 percent); arts, culture, and humanities (5 percent); international affairs (4 percent); and environment and animals (3 percent).

Among sources of charity, individuals continued their long run as the biggest category. It's a natural place to look for potential growth. Said Rooney: "I did a back-of-envelope calculation, and, basically, if every household allocated five dollars a day of frivolous consumption - say, Starbucks - we would double philanthropy overnight."

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