U.S. Charitable Giving Becoming Top-Heavy, Study Finds

Recent growth in philanthropic giving is concentrated among a handful of wealthy mega-donors, while giving by lower- and middle-income donors is falling steadily, a report from the Institute for Policy Studies finds.

The report, Gilded Giving: Top-Heavy Philanthropy in an Age of Extreme Inequality (42 pages, PDF), found that between 2003 and 2013, itemized charitable contributions from donors making at least $200,000, or roughly the top 10 percent of income-earners, those making at least $500,000 (top 1 percent), and those making at least $10 million (top .1 percent) increased 52 percent, 57 percent, and 104 percent, respectively. During the same period, itemized charitable deductions from donors making less than $100,000 fell 34 percent.

According to one estimate, between one-half and two-thirds of all charitable contributions from individuals come from households in the top 10 percent of income-earners. And while the number of million-dollar-plus gifts fell 31 percent between 2009 and 2014, the total value of those gifts rose 20 percent, with the average gift amount increasing from $8.13 million to $14.06 million. What's more, a disproportionate share of the growth in individual giving has gone to sectors favored by the wealthy, including education, higher education, arts and culture, and the humanities, while the number of small and midrange donors to public charities has fallen 25.1 percent, with donations from that group falling 7.1 percent between 2005 and 2015.

Such patterns of top-heavy giving, the report warns, pose a number of risks to charities, including increased volatility and unpredictability in their fundraising efforts; a growing bias toward larger or heavily donor-directed organizations and projects; and the potential for mission creep or distortion driven by the growing power of a relatively small number of increasingly wealthy donors.

"Since the last recession, the charitable sector has seen tremendous growth in giving," said report co-author Helen Flannery. "That's a good thing, in theory. But the growth is from donors at the top of the giving ladder, while giving from small and mid-level donors is steadily falling. And more and more giving is going into warehousing vehicles like foundations and donor-advised funds, instead of to charities on the ground."

"The growth of inequality is mirrored in philanthropy," said report co-author Chuck Collins. "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."

"New IPS Report Warns of Increasingly Top-Heavy Philanthropy." Institute for Policy Studies Press Release 11/16/2016. "Gilded Giving: Top-Heavy Philanthropy in an Age of Extreme Inequality." Institute for Policy Studies Report 11/16/2016.