Fiscal cliff, debt ceiling fight affect charitable giving
Donations to the 400 charities in the U.S. that raise the most money are slowing in 2013 after climbing 4% the year before, according to a newreleased this morning by the Chronicle of Philanthropy.
The slowdown in post-recession philanthropy gains comes in spite of a sharp rise in giving by wealthy Americans who have more than doubled the number of gifts of $1 million or more so far this year, the Chronicle said.
But middle-class Americans and those with fewer assets are holding back out of a collective unease that includes the chilling effect of the federal government shutdown and the debt ceiling fight in Washington.
The Chronicle said that 88 charitable groups say they think that donations will decrease by 1% this year.
[For the record, 11:00 a.m., Oct. 21: an earlier version of this post said a 1% increase was expected.]
“People are still very uncertain about the economy and worry that it might go back into recession,” said Stacy Palmer, editor of the Chronicle, in an interview.
The Chronicle’s report can be found here.
“Things like the federal shutdown and all of this wrangling in Washington over the debt ceiling aren’t helping,” Palmer said of the Chronicle’s research. “Those kinds of things don’t help people feel charitable or feel like giving as much as they gave in the past.”
Other findings included the growing significance of so-called “donor-advised-funds,” like Fidelity Charitable, which have allowed rich philanthropists to “park” money and receive an immediate tax benefit even though the funds may not actually be given to a particular charity until weeks or months later.
Donations to one such fund, Fidelity Charitable, soared by 89.1% in 2012 to nearly $3.3 billion, bringing it within range of the nation’s favorite charity, United Way Worldwide, which raised $3.9 billion last year.
But even those parked donations may have been influenced by the federal budget battle in Washington, Palmer said.
“One of the reasons groups that raised that kind of money did really well at the end of last year was because Congress was talking about taking away the charitable giving tax deduction,” Palmer said.
“All of that ‘fiscal cliff’ stuff was going on and people felt nervous,” Palmer said. “They probably thought, ‘I’ll put the money in, enough to tide me over for the next three years, but I’ll get my deduction now and just give it away over time.’”
But the biggist improvement in 2012 was enjoyed by the San Francisco Museum of Modern Art, Palmer said. Its capital campaign raised $181 million in 2012, a 410% increase over 2011.
“In these times, it’s very unusual to be able to do that well,” Palmer said.
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