For over 60 years, Giving USA Foundation has tracked and published data and trends about charitable giving through its publication Giving USA: The Annual Report on Philanthropy, which is researched and written by the IU Lilly Family School of Philanthropy.
This year, the foundation, the school, and Lake Institute on Faith & Giving took a deeper dive into the study of charitable giving to religious organizations in the Giving USA Special Report on Giving to Religion.
Ph.D. candidate and United Methodist minister Thad Austin spoke about the importance of analyzing and the methodological approach to studying charitable giving to religious organizations, the key findings of the report, and the impact of the findings for religious organizations.
In order to understand religious giving in the U.S., Rev. Austin first explained the importance of analyzing the methodological approach used to estimate the amount given to religion.
“It’s the hardest nonprofit subsector to measure. Most religious institutions are not required to file Form 990 with the IRS, which makes it difficult to measure religious giving,” he said. “In addition, the way that Giving USA defines giving to religion is very narrow. It primarily only includes congregations, denominations, missionary societies, and TV and radio ministries. There are many nonprofit organizations that are explicitly faith-based, such as World Vision and The Salvation Army, whose giving numbers are included in the human services subsector.
“Even though giving to religion represents the single largest subsector of all the nonprofit subsectors at 32 percent of total annual charitable giving, there is a lot of giving to faith-affiliated organizations that is happening in other subsectors.”
Both of these issues are included in the first part of the report.
“That part of the report is a call to say there’s a better way to measure giving to religion,” Rev. Austin said.
In order to address those methodological issues, Lilly Endowment gave a $1.67 million grant to Lake Institute on Faith & Giving to fund an in-depth national study.
“Regardless of religious affiliation, where do charitable donations to religion go? We’ll establish that baseline first,” Rev. Austin explained. “Then, we’ll proceed to the next step. We want a more nuanced understanding of the economic practices of faith communities. How do these congregations talk about money, what words do they use, how do they receive money?”
To establish this baseline and how congregations talk about money and giving, Lake Institute on Faith & Giving will study, survey, and speak to around 5,000 religious congregations in the upcoming years.
“The main question is, ‘does faith affiliation matter for philanthropy and charitable giving,’ ” Rev. Austin said of the findings published in Giving to Religion. “The resounding answer is ‘yes, it does.’ People of faith are more generous and they’re more likely to be generous. They not only give more than unaffiliated people to religious causes but also to non-religious organizations. ”
On a popular topic today—millennials and giving—Rev. Austin indicated that a recent report by Patrick Rooney, Mark Ottoni-Wilhelm, and X. Wang found that people who are religious among the younger generations are giving at a similar rate as earlier generations did at the same point in their lives.
“The problem is that drastically fewer people within this generational cohort are making donations,” Rev. Austin said. “From the giving to religion standpoint, it’s not the millennial part that’s an issue, it’s the faith affiliation of those millennials. If you’re able to capture a younger person’s imagination, spirit, and faith, they may give on par with other generations at that same stage in life.”
Rev. Austin hopes the takeaway that people of faith are significantly more charitable and generous with their financial donations than the general population will provide some ease for religious practitioners to be able to initiate conversations with their congregations around the topic of money.
“I hope they feel the freedom and confidence to enter into a conversation that’s already taking place within and among their members,” he said. “Then, I hope people of faith will find ways to better engage with unaffiliated millennials and other unaffiliated generations. It gets back to the question of ‘does faith affiliation matter for philanthropy?’ The answer is yes, and philanthropy and faith-based organizations need to find ways to better engage with people.”