Charitable Giving in Bay State Grew by 7.7% in 2014
January 30, 2015 Charitable giving in Massachusetts in 2014 rose 7.7% over 2013 levels, lagging national giving, which increased 9.3% last year, both down from the year before, a trend that is expected to continue through 2015, according to a newly released report.
The Atlas of Giving, a Dallas-based organization that tracks charitable giving, said growth last year was driven by favorable economic factors that drive giving, an increasing number of nonprofits, the impact of donor advised funds and new and more effective fundraising technologies and techniques.
Total charitable giving in the United States in 2014 reached a record hit of $456.73 billion, according to the Atlas.
Those results are consistent with recent reports of increased giving to donor-advised funds: Fidelity Charitable, the nations largest donor-advised fund, reportedly grew by 22% in 2014, while grants grew by 24%. Schwab Charitable reported is donor-advised funds by 10% last year, while grants increased by 25%.
While growth in charitable giving in Massachusetts 2014 is considered strong, it fell short of the 13.2% growth posted in 2013.
The second half of 2014 registered strong growth in charitable giving in Massachusetts, gaining 8% over the same period the year before, consistent with the national trend, which saw a gain of 9.5% for the last six months of 2014.
Other factors driving increased giving in 2014, according to the Atlas, included:
- Double digit growth in stock prices, boosting giving to organizations that rely on campaigns and major gifts.
- Low inflation, which gave individuals and corporations more discretionary income for making charitable contributions.
- Higher employment and higher consumer confidence.
- Historically low interest rates, which enabled individuals and businesses to pay less on borrowed money, freeing up more funds for giving.
- A significant reduction in energy prices, which also boosted discretionary income.
In 2014, the sectors experiencing the greatest gain in charitable gifts, nationally, compared to 2013, were human/disaster services, which grew by 12.7%, nature/environment (11.8%), education (11.5%), and arts (9.8%).
Individuals accounted for 74% of all charitable giving in the U.S. in 2014, consistent with 2013, and expected to maintain this level in 2015. Bequests accounted for 7% of all charitable gifts in 2014, and is projected to drop to 6% this year.
Charitable Giving Expected to Drop in 2015
Looking ahead, the Atlas forecasted that 2015 giving levels in Massachusetts will drop 0.2% from 2014 levels, while national giving will pull back by 3.2%, reflecting a stock market correction, expected higher interest rates, and a weaker Eurozone that will curtail U.S. exports and earnings.
The Atlas forecast that giving to charity from all sources will decline slightly in 2015, from 2014 levels, with corporate giving projected to drop the most, 4.1%.
In 2015, religion will remain the largest giving sector, accounting for 33% of all charitable giving nationally, the Atlas predicted, consistent with giving in 2014 and 2013. Education will be the next largest recipient of charitable gifts, at 17%, followed by human/disaster services (13%), health (8%), society benefit (8%), international (5%), arts (4%), and nature/environment (2%).
The Atlas of Giving develops its forecasts based on 65 economic algorithms for charitable giving that correlate to 42 years of published giving history with a coefficient of correlation of 91% to 99.8%.