A REPORT BY THE BALTIMORE GIVING PROJECT:
The State of Giving in Maryland 2002
The top 25 Maryland foundations hold 75% of assets and make 67% of contributions.
Maryland is a state of great wealth and substantial need—of enormous assets and serious challenges. After several years of skyrocketing profits and increases in charitable giving, we are now in a time of economic downturn. During such a time, needs increase and giving typically decreases. Looking ahead, we foresee a time of more challenges rather than fewer: tighter purse strings and more difficult choices about giving.
We hope that this brief snapshot will serve as a catalyst to encourage new and increased giving for the good of the people, families, and communities throughout the state.
Despite declining assets, foundation giving increased in 2001.
In the Nation
- Foundation giving accounted for 12.2% of all giving in 2001.
- Foundations gave $29 billion in 2001, an increase of 5.1% (2.1% after inflation). Foundations continued to fulfill multi-year commitments made in the late 90’s. Also, startup giving and giving to disaster relief related to September 11 helped boost the figures; they accounted for close to half the growth.
- Donor-advised funds at community and public foundations, an increasingly popular choice for individuals and families, held assets of $12.3 billion in 2001, and made grants of $2 billion, according to the Chronicle of Philanthropy.
In Maryland, three large foundations accounted for the bulk of the increase in the state’s foundation giving. Maryland foundations gave a total of $564 million in 2001.
Maryland’s wealthiest residents (those earning $200,000 and above) still appear to be less generous than their counterparts in other states. Why is this?
- In Maryland in 2001, there were 1256 foundations, an increase from 1165 in 1999. The total assets of these foundations were $9.1 billion, and their total giving was $564 million. Despite a 9% decrease in assets between 2000 and 2001, foundations made a 20% increase in giving between 2000 and 2001. Because their annual giving comes from endowment assets, foundation giving can increase and decrease as their investments do. However, many foundations continue to fulfill multiple-year commitments made in 1999 and 2000, keeping giving levels high.
- Three foundations make up the largest part of the increase in giving in the state. The Annie E. Casey Foundation increased giving by $52 million; The Henry and Jeanette Weinberg Foundation by $25 million; and The Eugene B. Casey Foundation by about $10 million. Without considering these three foundations, total giving among other Maryland foundations increased by 4% between 2000 and 2001. The top 25 Maryland foundations hold 75% of assets and make 67% of contributions.
- Of the 941 foundations reporting 2001 figures, 437 foundations increased giving, 59 foundations did not change, and 445 decreased giving.
- 86 new foundations were created in 2001. This is 35 fewer than were created in 2000 and the smallest number of newly formed foundations in the state in the last five years.
In Central Maryland:
Of the 1256 foundations, 52% are located in Central Maryland, with assets of $6.8 billion, or 75%. Central Maryland foundations gave $295 million in 2001, 70% of total giving.
- Donor-advised funds at community and public foundations continue to be a popular option, with these organizations showing growth in assets over the past year. In addition, Allfirst, T.Rowe Price, and Legg Mason have all instituted charitable gift funds, through which investors donate money to charitable organizations.
- Based on a survey of members of the Association of Baltimore Grantmakers (ABAG), foundation giving is expected to experience flat growth or decline in 2003. 75% of those who participated in the survey reported a decline in assets from which they are able to make grants between 2001 and 2002, with 24% reporting a decline in assets of 21% or greater. 63% reported that their 2003 grants budget will be smaller; 38% said it will remain about the same. Of those reporting that their budget will be smaller, 44% said that it will be slightly smaller (5–15% reduction from prior year) and 19% said that it will be considerably smaller (16–45% reduction).
How much was given to charitable causes and organizations in 2001 in the United States? Giving USA estimates that a total of approximately $212 billion was given to charitable causes in 2001. Individuals gave $161 billion, foundations gave $25.9 billion, bequests contributed $16.3 billion, and corporations made $9.1 billion in donations to charitable causes and organizations. Giving by individuals accounts for the vast majority of charitable donations in the US.
Nationally, individual giving accounted for 75.8% of all charitable giving in 2001, and bequest giving accounted for 7.7% of total giving.
- According to Giving USA, Americans gave $212 billion to charity in 2001, up .5% from 2000 before inflation is figured in. Adjusted for inflation, the number represents a 2.3% drop in charitable giving, which falls within the expected 1–5% range of decline during a recession year.
- A survey conducted by Independent Sector found that in 2000 nearly 90% of households made gifts and 44% volunteered. For all households contributing, the average contribution was $1620, or 3.2% of household income; the average contribution among households where residents volunteered was $2295. 56% of households were asked to give; 95% of households gave when asked. This survey captures donors who do not itemize charitable deductions, as well as those who do.
- Charitable deductions grew 11.1% to $133.6 billion in tax year 2000, outpacing an 8.2% increase in adjusted gross income.
- Official IRS figures are not yet available for 2001. In 2000, according to the IRS, 29% of households itemized returns; the average contribution was $3627, which was 2.17% of income; for those earning $100,000 to $200,000, the average contribution was $3733; for those earning $200,000 or more, the average contribution was $21,301. This data only describes the charitable donations of those who itemize their income taxes— approximately 32% of American taxpayers. It is estimated that itemizers account for approximately 80% of charitable giving.
Maryland has typically been seen as a less generous state than most; this year’s data allows the interpretation that Marylanders earning less than $200,000 may actually be more generous than their counterparts in other states. Some of our wealthiest residents (those earning $200,000 and above) still appear to be less generous than their counterparts in other states. Why is this? Are they less inclined to give than wealthy residents of other states? Do a number of these individuals give more generously through businesses they may own or through family foundations or funds at community/public foundations? It is not known whether wealthy Marylanders are more likely to use these alternative vehicles for giving than their counterparts in other states. What we do know is that the wealthiest among us have the largest capacity to give. In 2000, the 215,698 Marylanders earning between $100,000 and $200,000 made an average contribution slightly above the national average; their generosity yielded $8 million more for worthy causes than if each had made just the national average contribution. The 60,416 Marylanders earning more than $200,000 made an average contribution of $17,833; this is $3468 less than the national average for that income group. If those with the greatest capacity to give would do so at the level of the national average, there would be more than $209 million in additional charitable dollars available to improve the quality of life in our communities. It is often difficult to compare individual giving data by state, since different percentages of taxpayers itemize returns in each state, and since states vary widely in average income per resident.
- According to the IRS, in 2000, Maryland ranked 8th in household income; the average charitable contribution for Marylanders who itemize their deductions was $3501 (for a ranking of 18th in the country.) For those earning $100,000 to $200,000, the average contribution was $3769 (for a ranking of 29th); for those earning $200,000 or more, the average contribution was $17,833 (for a ranking of 38th.)
- Maryland ranks 6th for dollars contributed to charity as a percentage of adjusted gross income—those who itemize charitable deductions contributed an average of 2.7% of income. Maryland ranks 24th overall for average amount contributed to charity. Maryland has the highest percentage of tax returns filed with charitable deductions—42.1%.
- The Chronicle of Philanthropy conducted a study examining giving state-by-state based on percentage of disposable adjusted gross income. For this calculation, they took adjusted gross income and factored in estimated cost of living, reasoning that in states with high costs, residents may not have as much income available for giving. In 2000, with cost of living factored in, Marylanders earning $75,000 to $100,000 were the third most generous in the nation (they ranked 18th without cost of living factored in.) Those earning $100,000 to $200,000 ranked 7th with cost of living factored in (as opposed to 29th); those earning $200,000 to $500,000 ranked 35th (compared with 38th); those earning more than $1 million ranked 38th. Cost of living affects those at lower income levels more than the wealthy.
Corporate philanthropy takes many forms, including direct grants, employee release time for volunteering, matching employees’ donations to charitable organizations, and donating valuable goods and services. Corporate giving tends to decline more quickly than other forms of giving in times of economic downturn.
- Corporate giving accounted for 4.3% of all giving in 2001.
- In 2000, corporate giving amounted to $10.86 billion (5.3% of charitable giving for that year.)
- In 2001, total corporate giving fell approximately 12.1% (a decrease of 14.5% adjusted for inflation), significantly larger than the average recession-year dip of less than 1% for businesses. However, corporate giving as a percentage of profits rose slightly. Corporate contributions are estimated to be $9.05 billion in 2001, or 1.3% of corporate pretax profits. Corporate giving generally shows the effects of weaker corporate profits and a volatile stock market before foundation and independent giving.
- It appears that many companies gave the amounts they budgeted for FY2001, despite the events of September 11; their disaster relief giving appears to have been additional donations.
In Maryland, corporate giving, after a large increase in 2000, declined in 2001.
- According to the Baltimore Business Journal’s annual survey, corporate giving among the top 25 corporate donors in central Maryland to local causes and organizations dropped from $38 million in 2000 to approximately $33 million in 2001.
- Efforts are underway to encourage small and large businesses to develop and expand charitable giving programs.
A recent Association of Baltimore Area Grantmakers/Baltimore Giving Project publication, The Maryland Business Giving Workbook, is being distributed across the state. This update to the 2001 report “The State of Giving in Maryland” was produced by the Association of Baltimore Area Grantmakers and the Baltimore Giving Project. The Association of Baltimore Area Grantmakers (ABAG) is a membership organization of foundations and corporate giving programs dedicated to strengthening and promoting organized philanthropy in Central Maryland. Call 410-727-1205 or email email@example.com. The website is at abagmd.org.
The Baltimore Giving Project is an initiative housed at ABAG with the mission to promote, encourage and expand organized philanthropic giving in the greater Baltimore area by fostering the creation and expansion of new foundations, charitable funds, and corporate giving programs. Call 410-727-0719, email firstname.lastname@example.org or visit baltimoregivingproject.org
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This story was published on April 5, 2003.