Charitable giving tops $400 billion in ’17
Charitable giving rose 5.2 percent to a record $410 billion last year, thanks to the booming economy, soaring stock market, giving to hurricane and wildfire relief, and several mega-gifts from tech billionaires, according to Giving USA, the largest and longestrunning annual report on U.S. philanthropy.
Last year’s increase surpassed a 3.6 percent increase in 2016. The report, published Tuesday, includes giving by individuals, corporations, bequests and foundations.
The largest gifts last year included $4.6 billion from Bill and Melinda Gates, $1.9 billion from Mark Zuckerberg and his wife, Priscilla Chan, and $1 billion from Michael and Susan Dell. All three gifts went to the donors’ respective foundations.
Tech donors are making waves not just for the size of their donations, but also for the ways they are said to be changing philanthropy.
“People love to say tech has a new approach. They are more data-driven, want to see results in their lifetimes,” said Daniel Lurie, founder of the Tipping Point Community, a San Francisco grant-making organization. But traditional donors want that too, he said, before participating in a panel discussion on Bay Area philanthropy at the Common-
wealth Club on Tuesday. The event was timed to coincide with the report.
At the event, several speakers said donors from the tech industry are motivated more by having an impact than on personal recognition. But Zuckerberg and Chan got their names on San Francisco General Hospital after a $75 million donation. And this week, City University of New York said it would rename its graduate school of journalism after Craigslist founder Craig Newmark, who bestowed a $20 million gift.
For fundraisers, recognition “can be a useful tool to help you frame your request,” said Rick Happy, a managing director at consulting firm CCS Fundraising. “It can be the tipping point for some donors to make a final decision.”
Lurie said that nonprofits seeking money from tech companies should “go grassroots” and “engage employees,” who can be a strong motivating force for change. He said Google’s decision to pull out of an artificial intelligence project for the Pentagon came at the urging of employees.
One of the biggest innovations coming from Silicon Valley: Laurene Powell Jobs and Zuckerberg and Chan have set up limited liability companies to carry out some of their charitable endeavors. These companies — the Emerson Collective and the Chan Zuckerberg Initiative — are not charitable organizations themselves, but they can make donations to nonprofits, fund political campaigns and invest in for-profit companies.
The Washington Post described the Emerson Collective as “equal parts think tank, foundation, venture capital fund, media baron, arts patron and activist hive. Certainly, it was an original creation — and potentially a powerful one.”
The “boundaries are blurring,” said Heather McLeod Grant, cofounder of Open Impact, which consults with large donors on giving strategies.
“The nonprofit sector should not be jealous of private capital that wants to fund a systemic problem,” said Charles Collins, chief executive of the YMCA of San Francisco.
Although the Bay Area economy is booming, the gap between rich and poor here is growing wider, Collins said in an interview. “The notion of trickle down doesn’t work,” he said.
McLeod Grant agreed. “Many of our nonprofits are really struggling,” she said. They are facing rising rents and other costs and increased demand as the people they serve face the same pressures. At the same time, they’re having to compete for employees with high-paying tech companies. This is less of a problem for large hospitals and private colleges than it is for smaller nonprofits that can’t afford marketing campaigns and fundraising professionals.
It’s unclear how the federal tax law signed Dec. 22 affected last year’s giving or will change it going forward. The tax law lowered corporate tax rates starting this year, which could have spurred a robust 8 percent increase in U.S. corporate giving in 2017, according to Giving USA. Corporate giving includes cash and in-kind contributions of products and services.
For individuals, the tax law retained the itemized deduction for charitable contributions, but nearly doubled the standard deduction starting this year. The percentage of tax returns taking itemized deductions — and therefore qualifying for the charitable deduction — is expected to drop to about 10 percent from about 30 percent. That change will mainly affect middle- and upper-middle-income households.
Giving USA is funded by a consortium of fundraising and other consulting firms and produced by the Indiana University Lilly Family School of Philanthropy.