Individual Giving During Recession Fell More Sharply Than Predicted

During the first two years of the recession, individual donors gave less to charity than experts had predicted, the Chronicle of Philanthropy reports.

According to newly released data from the Internal Revenue Service, Americans wrote off $172.9 billion in charitable contributions in 2008, a 10.6 percent drop from 2007, and gave an estimated $148.6 billion in 2009. While the final total for 2009 is still being calculated, preliminary estimates suggest a 14 percent year-over-year decrease in giving, which is considerably larger than number generated by Center on Philanthropy at Indiana University for the annual Giving USA report. According to the center, giving by individuals dropped by 2.4 percent in 2008 and was flat in 2009.

Leo Arnoult, a Memphis-based fundraising consultant and member of the committee that oversees Giving USA, told the Chronicle that it appears the methodology used to produce the study fell short because it did not reflect the true effects of the economic downturn. "Our model did not capture the depths of this recession," said Arnoult. "It was off by a substantially greater percentage than normal."

Although researchers at the center defended the accuracy of their estimates — which, because they diverged significantly from other studies released on giving during the downturn, have sparked a firestorm of criticism over the past year — the center has hired an economist to assess its econometric model and proposed a "relatively minor" change that will be reflected in the next edition of the report.

"Clearly this recession has reduced giving far more than earlier recessions," Paul G. Schervish, director of Boston College's Center on Wealth and Philanthropy, who also serves on the Giving USA committee, told the Chronicle. "We can no longer believe that individual giving is very resilient, decreasing only minimally, or holding steady in times of crisis as severe as this recession."

Holly Hall. "Americans Gave a Lot Less in the Recession Than Experts Predicted." Chronicle of Philanthropy 04/22/2011.