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New Donor Generation Stimulates U.S. Giving

When the Facebook founder Mark Zuckerberg gave the federal Centers for Disease Control foundation $25 million to help combat the Ebola crisis last month, it served as a public service announcement of sorts.

Five years after the recession reshaped the global economy, charitable giving is back in a big way in the United States. What is more, a new generation of donors is meeting significant challenges with transformative gifts.

Mr. Zuckerberg has emerged as one of the most generous entrepreneurs of his generation, doling out eight- and nine-figure gifts to education, health and community development causes. And to a surprising degree, much of the country has followed in Mr. Zuckerberg’s footsteps, even after the financial crisis.

Overall charitable giving in 2013 was up 3 percent from the previous year, the largest year-over-year increase since the recession, according to Giving USA and the Indiana University Lilly Family School of Philanthropy, which track contributions. Donations from individuals, companies, foundations and bequests topped $335 billion in 2013, approaching the peak from before the financial crisis. It was the fourth consecutive year of gains.

And while few are as wealthy as Facebook or its founder, the American people and the business community have largely shrugged off the financial crisis and resumed their charitable ways.

“It’s really recovered,” said Melissa Berman, chief executive of Rockefeller Philanthropy Advisors. “America has a long, long tradition of generosity.”

It wasn’t always clear this would be the case. In the throes of the recession, giving plunged 15 percent, to $298 billion in 2009 from $350 billion in 2007, according to the Giving USA data, which is figured in constant, inflation-adjusted dollars.

Even then there was a silver lining. The country was poorer, meaning there was less to give, yet as a proportion of wealth generated, Americans appeared to maintain their generosity.

“Although total giving has predictably declined, we are still giving at high levels and at nearly the same proportion of total dollars as before,” wrote Rob Reich and Christopher Wimer of Stanford University, in a 2012 paper examining the recession’s impact on philanthropy.

But where those dollars were going “changed pretty significantly,” said Eileen R. Heisman, chief executive of the National Philanthropic Trust. Donations to organizations that fight homelessness and food banks spiked in 2008 and 2009, while giving to arts and education causes slumped.

“When there’s a recession and high unemployment, people respond to those immediate needs,” said Ms. Berman.

But as the direst days of the recession have passed, giving to different causes has returned to precrisis levels. “As the recovery has persisted, people are moving back to the areas where they have traditionally given,” said Dr. Patrick M. Rooney, associate dean of Indiana University Lilly Family School of Philanthropy.

Giving to the arts and education has outpaced charity to hunger and homelessness causes in recent years. And when disasters strike, be it an earthquake in Haiti or a tsunami in Japan, Americans can generally be relied on to open their wallets.

Perhaps most surprising about giving since the recession is who has proved most generous. It turns out that poorer individuals give a greater percentage of their income, even during tough times. Though low-income Americans cut back on charitable giving the most during the recession, they tend to give a higher proportion of their wealth away than those in the middle and upper classes.

“It’s remarkable how generous low-income Americans are,” said Ms. Berman. “Their giving dropped the most in the recession because they don’t have as much expendable income, but they tend to give a higher proportion of their money away to charity.

“Folks that see so clearly how their lives can be upended by one thing — a child that gets sick or a family member having a hard time — have a sense of, ‘There but for the grace of God go I.' ”

The richest individuals have also resumed their charitable ways. “More high-net-worth households are giving, and they’re giving more,” said Mr. Rooney.

In recent months, a number of large gifts from billionaires have made headlines. In addition to Mr. Zuckerberg’s donation to fight Ebola, last month Charles T. Munger, the vice chairman of Berkshire Hathaway, gave $65 million to the Kavli Institute for Theoretical Physics at the University of California, Santa Barbara. And last year, the billionaire real estate developer Stephen Ross gave $200 million to the University of Michigan.

Today’s youth, enabled by online giving and best exemplified by Mr. Zuckerberg, are also participating. “The millennials are really committed to giving,” said Ms. Heisman. “This isn’t just a baby boomer phenomenon.”

And companies, too, are gradually resuming their philanthropic initiatives, though progress is slow. Just 64 percent of companies increased total contributions from 2010 to 2013, according to a report by the CECP, in association with the Conference Board. And corporate giving, while up 10.8 percent since 2011, dropped 3.2 percent from 2012 to 2013, Giving USA says.

Yet despite this broad-based recovery in giving, the recession did set back philanthropy in America. The $335 billion in gifts last year remains below the precrisis high of $350 billion. “It’s been a pretty slow build-back,” said Ms. Heisman.

The biggest drag is individual giving, which is down $21 billion from before the recession began, according to Mr. Rooney. Efforts like Giving Tuesday, a charitable take on the likes of Black Friday and Cyber Monday, and new online sites like Donors Choose and Kickstarter, have failed to meaningfully bolster giving levels.

As a result, Americans still give away roughly 2 percent of the country’s gross domestic product per year. That is higher than other countries and has largely recovered since the recession. But the proportion is not growing substantially.

“The ‘glass half empty’ view is that we’re back to where we were about a decade ago,” said Mr. Rooney. “The ‘glass half full’ is that giving dropped during the Great Recession, but it didn’t fall off the charts. There’s a reason they call it the Great Recession.”

A correction was made on 
Nov. 12, 2014

An article on Friday about an increase in charitable giving omitted a source for a report that found that just 64 percent of companies had increased their total philanthropic contributions from 2010 to 2013. The report was done by CECP, in association with the Conference Board — not by the Conference Board alone.

How we handle corrections

A version of this article appears in print on  , Section F, Page 11 of the New York edition with the headline: New Donor Generation Stimulates U.S. Giving. Order Reprints | Today’s Paper | Subscribe

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