Hundreds of billions of dollars is given to charitable causes every year. Earlier this month, Giving USA released its 2017 report, which reports on the philanthropy of 2016. There was some good news to share: 2016 saw a 2.7% increase in charitable donations when compared to 2015. Last year, an estimated $390 billion was donated to charity, an increase from the $379.89 billion given to charities in 2015.
The estimated $390 billion is made up of donations from corporations, estates, foundations, and individuals.
Where the money is going
That’s an insane amount of money – but where is it all going? It’s estimated that nearly $123 billion of that money went to religious institutions last year – places of worship, religious activist causes, and the like. This makes it the most donated-to institution in the country, netting more than double of the institution in second place: education, at $59.77 billion.
Tens of billions are also finding their ways to the health industry, the arts, and human services. But are people donating too much to religious institutions? It could be argued that many of these institutions use the funds they receive for programs that benefit society, aiding in things like homelessness, health, and education. Unfortunately, we don’t really know enough about what actually happens to all that money when the institutions get a hold of it – and that goes for all of them.
Are businesses doing enough?
One of the most interesting trends when it comes to annual philanthropy is the fact that the vast majority of donations come from individuals. In 2016, nearly $282 billion of the money donated to charity came from individuals, which works out at about 72%. Corporations accounted for about $18.55 billion.
One could probably make the argument that businesses could be doing more for charitable causes. After all, aren’t they the ones with all the money? Well, businesses do do a great deal more charity work in general than a lot of people assume; it’s just that a lot of their methods don’t always involve giving money away, which can make them seem like they’re doing less than they really are when we only take into account monetary donations. Consider the Ken Starr Stuff a Home Comfort Van Event that took place in the Christmas season last year, in which donations were primarily item-based.
Will we do better in 2017?
All of this is pretty good news; it helps highlight how willing we are to donate to good causes. Some would say that this works as an argument against high taxation – simply because taxes reduce the incentives of giving to charity. And guess who might be introducing tax overhauls that could affect charitable giving?
The Trump administration outlined a tax-code overhaul in April, one that didn’t see much of the decrease in tax that many were hoping for. There are plans to eliminate the estate tax, but this seems to come with the effect of increasing the standard deduction that individuals and businesses can receive on charitable donations – which basically means that less of the money that one donates is actually going to go to charity.
This may change; in any case, it’s unlikely to come into effect this year. We don’t know if charitable giving will increase this year – but perhaps we should all consider throwing some money towards good causes.
