The Concentration of Philanthropy: Overall Giving Increases Despite Significant Fall from the Bottom 92% of Donors

Earlier this year, Giving USA released its annual report on the state of philanthropy in America. The organization found that overall giving from individuals increased by 3.8% in 2015 with an average household giving of $2,124, which many considered to be a hopeful indicator of the sector's continued strength. However, this week the Institute for Policy Studies published a concerning finding that had been largely obscured by aggregate metrics: Giving from individuals earning less than $100,000 fell 34% between 2003 and 2013.

Although these Americans comprise 92% of the general population, overall individual giving managed to rise during this period due to substantial increases in donations from the top 8% of earners. Giving from donors making at least $200,000 rose by 52%; giving from donors making at least $500,000 grew by 57%; and giving from donors making $10 million increased by 104%. Similarly, the average size of million-dollar-plus gifts rose by 20% between 2009 and 2014, from $8.13 million to $14.06 million. These findings correspond with another recent report from the National Philanthropic Trust showing that the growth in contributions to donor-advised funds nearly tripled the pace of overall giving in 2015. Contributions to DAFs reached a record $22 billion, an 11.4% increase from 2014.

While many are glad to see that overall giving has continued to grow since the recession, the trends observed by the Institute for Policy Studies highlight some growing concerns within philanthropy. As the practice of philanthropy becomes increasingly concentrated, researchers have already observed that the donations too are disproportionately going to higher education, arts, and the humanities, sectors typically preferred by the wealthy. Further, donations are increasingly parked in foundations and donor-advised funds, rather than going directly to charities. As co-author of the report Chuck Collins explains: "As wealth concentrates in fewer hands, so does philanthropic giving and power. We believe this poses considerable risks to both our independent sector and democracy."

Read more at Philanthropy News Digest and the Chronicle of Philanthropy. The full report from the Institute for Policy Studies can be found here.