Charitable giving hit a record high for the third straight year in 2016, reaching $390.1 billion, according to “Giving USA,” an annual study that estimates American philanthropy. However, donations rose at a slower rate than in recent years — 1.4 percent — as key economic indicators grew modestly and a divisive election season sowed uncertainty.
Giving from living individuals, which for years has made up more than 70 percent of donations, rose to $281.9 billion, a 2.6 increase from 2015. That growth rate, though modest compared to recent years, helped offset a 10 percent loss in giving from bequests, which totaled $30.4 billion last year.
Foundation and corporate giving saw modest gains, with each increasing by a little more than 2 percent, to $59.3 billion and $18.6 billion, respectively.
Giving by foundations is the highest it’s been, according to the report, even after adjusting for inflation, but companies have yet to reach a prerecession high of $18.7 billion in donations, set in 2005. That might be explained by a shift in thinking about corporate philanthropy, said Una Osili, director of research at Indiana University’s Lilly Family School of Philanthropy, which conducted the study for the Giving Institute.
In their philanthropy plans, some companies have focused more heavily on sponsorships, cause marketing, and volunteering opportunities for employees, which aren’t captured in “Giving USA” data, Ms. Osili said.
Giving appears to have been affected by slower growth in key metrics like disposable income and personal consumption that are closely linked to philanthropy. Stock-market performance was strong in the final weeks of 2016, but market results were more mixed the rest of the year, which may have also reined in donors.
Last year “didn’t look like such a robust year” for economic measures tied to giving, Ms. Osili said.
Political and economic uncertainly may have also influenced giving in a year marked by a raucous U.S. election campaign and disruptive world events like Britain’s vote to leave the European Union. Still, Ms. Osili said it’s hard to know exactly what impact the elections or any one event had on giving.
Total giving represented 2.1 percent of gross domestic product last year, the same proportion as the previous two years but slightly above the 1.9 percent average for the past 40 years.
The overall growth rate in “Giving USA” is close to a February 2017 estimate by fundraising-software company Blackbaud, which reported that giving grew 1 percent last year.
The numbers are “Giving USA” researchers’ first estimates for 2016 giving; the figures will be amended over the next two years as researchers receive updated data.
It’s unclear how giving will fare in 2017. Gross domestic product grew at its slowest pace in three years in the first quarter of 2017, and as of mid-May the S&P 500 had seen returns of 6.5 percent, down from a 9.5 percent increase for all of 2016 (but well above 2015’s sub-1 percent gain). “The big message is that it’s a mixed picture” so far, Ms. Osili said.