Public Policy Forum Blog

You are Big Philanthropy

As we begin 2014, now is the time that we often take a moment to reflect on the past year and think of ways that we can improve upon it. As a result of this process, many people resolve to share a greater part of what they’ve earned with the causes that matter most to them. My current project as the Norman N. Gill fellow examines this very phenomenon. Given the close alignment of goals between governments and nonprofit organizations, it’s valuable from a policy perspective to understand charitable giving behaviors.

Donating to nonprofit organizations is one of the ways that we give thanks for what we have and make the world a better place. And yet, it’s easy, and indeed common, to think that your donation of $10, $20, or even $100 wouldn’t be missed. In the wake of the $4.4 billion given by the Bill & Melinda Gates Foundation or the $350 million given by the Susan Thompson Buffett Foundation, what does an extra $20 matter? As it turns out, it matters a lot. You may not realize it, but you are “big philanthropy.”

We say this because it is individuals and families, not large foundations or corporations, who are responsible for 72% of the total amount contributed to nonprofits. In fact, private households gave about $228 billion to nonprofit organizations in 2012. (The figures for 2013 are still being tallied). That’s an enormous amount, and it is made up of the donations you gave out of your pocket. We should be exceedingly proud of that figure.

Our nonprofit organizations are able to do outstanding work because of your support. It’s not heavily endowed foundations or governments that have a monopoly on funding these organizations. It’s us - you, me, your Aunt Sally, and your neighbor down the block.

We’re not trying to reduce the importance of foundations or corporate giving. Certainly, their contributions are fundamentally necessary to the health of the nonprofit sector, and it is important to recognize that each nonprofit organization has different sources of revenue. We mean only to say that what families give personally is not at all overshadowed by the exceptional gifts from other sources. In fact, in Pulling Back the Curtain, our recent report on the region’s arts and cultural institutions, we find that there is a need for both individual giving and institutional philanthropy, along with public sector support, in retaining the area’s diverse array of arts, culture, and entertainment assets.

So, remember this year that your giving makes a difference. To nonprofit organizations, you are not just another faceless donation, you are a philanthropist.

Phillip Laper