A Bigger Share of a Bigger Pie – Reactions to Giving USA Data

So, the 2009 Giving USA data has been released and some people aren’t happy.

What does Giving USA report? Adjusted for inflation, year-over-year giving in 2009 declined by 3.2%.  Not surprisingly,  there was a decline.  But, here is what has some people confused and even upset:

Giving from individuals – which make up 75% of all charitable gifts (closer to 85% when you factor in bequests and family foundations) – was flat in 2009.

Yes, you read that correctly.  Individuals gave $227.41 billion in 2009 and, when adjusted for inflation, that amount is equal to the amount given in 2008.

But some are a bit disgruntled by this result.  “How can this be?” some development professionals are asking.  “Our organization experienced a 5%, 10%, even 15% decline in giving – and everyone knows that the economy has suppressed giving.  These numbers must be bogus!”

A glaring problem with this reaction is that the Giving USA study has historically been exceedingly accurate.  In the 50+ years of the study, Giving USA is rarely off by more than 1% when reconciled with IRS tax return data.  The study methodology is sound.

But let’s put aside the tradition of accuracy for a moment.   A larger concern for me is how we view “the pie.”  Here’s what I mean.

As I’ve read the reactions to the study from people who claim that the data is inaccurate, I sense a fatalistic disposition that I find sad and unhelpful.  Yes, times are exceedingly difficult, but last year saw Americans give away over $300 billion!  Think about that number for a moment – it’s huge.

So, if we view the $300 billion as a big pie, the people who believe that the Giving USA study is inaccurate are really suggesting that the primary driver of their organization’s success is the size of the pie – and they don’t have much control over its size.  If the pie gets bigger, they will, by definition raise more money.  If the pie gets smaller, they will, by definition raise less money.  The size of the pie is really all that matters.  In the end, nothing they do with their major donors, or in their annual fund program, or in their communications program will matter much.

I agree that the size of the pie is important.  But I view it very differently.

First, I believe that what we actually do in our development programs is the biggest determinant of our success.  I believe we can  enlarge our share of the pie.  I think, “wow, $300 billion is a large amount of money – the pie is huge!”  And then, “How can my organization get more of that pie?  What programs, activities, opportunities are there for us to enlarge our share of the pie.”

Second, I believe we can work to enlarge the whole pie!  Instead of believing that the size of the pie is out of my control and waiting on the data, I believe that all development professionals have a role in increasing the pie each year.  What are we doing to enhance the understanding of the importance of philanthropy in the U.S.?  What are we doing at our organizations to diversify our donor bases and reach out to new charitable giving prospects and pools of donors?  How are we educating our prospects and encouraging their giving?

As I have written previously, the Fatalists among us focus on the $300 billion and say, “see, it’s less than last year by 3.2%, so our giving is going to be down, too.”  But I know a different reality – that our work matters and our strategic efforts with donors are the primary reasons why our organizations achieve charitable giving goals.  I can’t imagine thinking and acting any other way – I like pie too much.

1 Comment

One Comment

  1. Thanks, Jason, for your insightful and reflective comments about the pie and how we can all help it grow. Melissa

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