Rick Cohen: Huge rise in 'mega-gifts' is a sign of an uneven recovery

Rick Cohen
Rick Cohen

Charitable and philanthropic giving from all sources reached $358.38bn in 2014, according to Giving USA 2015, published by the Indiana University Lilly Family School of Philanthropy in June. This is the highest total in the 60 years of Giving USA studies – higher than the previous best of $355.17bn in 2007.

Charitable giving is up 7.1 per cent on 2013 in current dollars and 5.4 per cent in inflation-adjusted dollars. Nearly three-quarters of the giving came from individuals. The numbers camouflage details that are important to non-profits. One is the massive increase in "mega-gifts." Last year they were defined as starting at $80m. But the huge gifts by a few individuals, such as Napster's Sean Parker ($550m), Google's Sergey Brin ($383m) and Bill and Melinda Gates ($1.5bn), meant this was changed to a minimum of $200m, yielding a mega-gift total of $6.2bn in 2014 (this was $4.63bn in above-$80m mega-gifts in 2013).

Every category of charitable giving increased, except one: despite the overall increase in charitable flow, giving for "international affairs" fell by 3.6 per cent in inflation-adjusted dollars. The absence of a big natural disaster in 2014 might have dampened giving, but an increasingly xenophobic American attitude toward man-made disasters such as Syria might also be at work.

The big winner was the arts, culture and humanities sector, which jumped by 9.2 per cent in current dollars or 7.4 per cent in inflation-adjusted dollars. Charitable giving for health also did well because some of the large gifts from the mega-donors went to medical research. Also scoring well in the post-recession increase was giving for "public-society benefit", an odd category that in Giving USA includes giving to the community-focused non-profit United Way and to donor-advised funds, the latter doing well from high-tech billionaires.

For some observers, the growth in mega-gifts is indicative of the uneven recovery of the US economy, in which the recovery of high-net-worth Americans has barrelled along while the wages of most households have been stagnant. Income disparities are as severe now as they were during the Depression of the 1930s. Mega-donors, hospitals, universities, donor-advised funds and museums might be basking in record charitable giving, but there is much to do to create a more inclusive economy, and it isn't happening despite skyrocketing charitable giving.

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