Americans contributed over $260 billion to charities in 2005, estimates Giving USA, marking a 6.1 percent increase in donations (2.7 percent adjusted for inflation). The study attributes almost half of the $15 billion growth in philanthropy to disaster relief. After witnessing the devastation wrought by three major natural disasters, Americans answered by giving at least $7.37 billion to relief efforts. Independent individuals contributed upwards of $5.8 billion, comprising 79 percent of gifts toward disaster recovery. Corporations also responded with over $1.3 billion in donations, accounting for 19 percent of the total sum.
Disaster relief aside, Americans’ charitable contributions grew significantly over the past year. Dispelling myths of donor fatigue or national stinginess, the study reports that individual giving rose by 6.4 percent (2.9 percent adjusted for inflation). In total, individuals gave almost $200 billion to charities in 2005. The American citizen himself remains the primary source for philanthropy, accounting for 76.5 percent of all estimated giving. The average household donates 2.2 percent of its disposable (after-tax) income, a figure identical with the national average over the past 40 years.
The philanthropic world also witnessed an extraordinary surge in corporate giving, which grew by an unparalleled 22.5 percent in 2005 (18.5 percent adjusted for inflation.) Corporations now account for 5.3 percent of total charitable contributions, giving an estimated $13.77 billion over the past year. Such a dramatic expansion in philanthropy elicited a wide range of explanations. “The high level of corporate giving,” observes George C. Ruotolo, Jr., chair of the Giving Institute, “is explained in part by two years of very strong growth in gross domestic product and by growth in corporate profits before taxes. It also shows companies’ exceptional response to disasters worldwide in 2005.”
To complement the study, an additional survey appraised charitable organizations themselves. As expected, even before accounting for disaster relief, 59 percent of charities reported a rise in charitable receipts. “The year 2005 saw the highest percentage of charitable organizations reporting growth since 2000 and the lowest percentage of charities reporting a drop in giving,” says Eugene R. Tempel, executive director of the Center on Philanthropy at Indiana University.
Certain sectors, however, such as the arts and health care, experienced inflation-adjusted decline, whereas environmental and international affairs sectors grew in comparison. As in past decades, Americans continue to give most to religious organizations, which received 35.8 percent of all contributions in 2005, totaling over $93 billion.
Oracle Corporation chief executive Larry Ellison has publicly withdrawn plans to donate over $100 million to Harvard University. His gift would have been the single largest donation that Harvard had ever received. Ellison told reporters he decided to abandon the donation due to the resignation of former Harvard president Lawrence Summers last June.
Ellison had announced last spring his intention to create the Ellison Institute for World Health, which would have researched and rated the quality of government healthcare programs across the world. While a formal agreement was never made, informal discussions between Summers and Ellison had left Harvard confident enough to hire the Institute’s initial staff. After the controversial departure of Summers, Ellison evidently lost his faith in Harvard’s ability to administer the funds properly and carry out his intent. Oracle spokesman Bob Wynne told reporters that “It was really Larry Summers’ brainchild, and once it looked like Larry Summers was leaving, Larry Ellison reconsidered.”
This past June, after 30 years of giving, the Whitaker Foundation spent down the remainder of its endowment and closed its doors. It leaves behind an extraordinary legacy in science and medicine, having transformed the field of biomedical engineering. The foundation funded the creation of at least 30 academic departments and launched the careers of 1,500 biomedical engineers. These investments yielded more than 200 new products for medical science and clinical care. Whitaker researchers have started more than 100 health technology companies and own 278 patents. More than 10,000 students have been mentored.
Fifteen years ago, the governing committee of the foundation considered three issues: U.A. Whitaker’s desire to facilitate the growth of biomedical engineering, biotechnology’s immediate need for additional support, and the fact that the foundation had the assets to fulfill this need. They seized on the opportunity and decided they would spend down, contributing the remainder of their assets to support biomedical engineering. In total, the foundation would give more than $800 million in grants and awards during its lifetime.
As a result of the generosity and foresight of U.A. Whitaker, crucial advances in medicine were made sooner rather than later, and his foundation became a powerful catalyst for change. Shu Chien, M.D., University Professor of Bioengineering and Medicine at the University of California, observed that biomedical engineering has been transformed “from a fledging field to a mature discipline that has gained respect of all fields in medicine, the sciences, and engineering. The extent and rapidity of the development of a field by the effort of a single foundation is unprecedented.”
