Giving in 2013 is expected to rise only 1.6 percent from last year, according to a new report, making it one of the worst fundraising years in five decades, projects the Atlas for Giving, an independent forecasting service.
Among the reasons for the gloom: The stock market is likely to tumble, the unemployment rate will remain stubbornly high, health-insurance costs will surge, and the 2-percent payroll-tax increase that took effect in 2013 will make people stingier, the Atlas’s analysis believe.
“The less people take home, the less they have to give,” says Rob Mitchell, chief executive of Atlas of Giving.
The forecast doesn’t take into account the still-looming threat that Congress could limit or abolish breaks donors get for charity gifts, which would have a “devastating impact” on charities, he adds. “That could make 2013 worse.”
This is in stark contrast to 2012, when the Atlas says giving rose 6.7 percent.
Atlas of Giving is one of the newest players in producing philanthropy research. It seeks to provide faster forecasts than “Giving USA,” which produces one of the most widely used measures of how much is donated annually.
Atlas’s projections are not based on surveys of nonprofits but on an algorithm that involves 70 measures, such as the state of the economy, demographic data, joblessness rates, political election results, and the state of consumer confidence. It says that when it tested its algorithm to estimate giving each year going back to 1968, it was 99.5 percent accurate compared with what happened in each of those years.
Much of last year’s rosy picture resulted from strong stock-market performance, an improved economy, and large contributions from Warren Buffett, Mark Zuckerberg, and other rich people, the Atlas report says.
Environmental charities fared the best last year, increasing donations by 10.9 percent. Other groups with the strongest growth were those focused on education and human services, which rose 8.8 percent. Superstorm Sandy was a key reason that giving to social services rose so fast, says the report.
Also strong was a category that includes donor-advised funds and a range of other charitable causes, where saw giving grow 9 percent.
Mr. Mitchell says he believes that environmental charities benefited from sophisticated fundraising appeals focused on college-educated donors and all the attention climate change got in the news media. Meanwhile, colleges and other education groups did well because they court many donors who probably fared well in the buoyant stock market.
Giving to religious causes in 2012 didn’t grow as much as other segments of the nonprofit world, with only a 4.2 percent bump, according to the study.
In 2013, Atlas expects giving to rise by 5.9 percent for environmental groups, 4.9 percent for human services, and 2.6 percent for education.
The complete report is free but requires registration.
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