The Center on Philanthropy at Indiana University and Google partnered in early 2007 to estimate how much of the charitable giving by households in the U.S. focuses on the needs of the poor. This analysis finds that less than one-third of the money individuals gave to nonprofits in 2005 was focused on the needs of the economically disadvantaged. Of the $250 billion in donations, less than $78 billion explicitly targeted those in need.
Only 8 percent of households’ donated dollars were reported as contributions to help meet basic needs--providing food, shelter, or other necessities. An estimated additional 23 percent of total private philanthropy (including donations from foundations, corporations, and estates) went to programs specifically intended to help people of low income--either providing other direct benefits (such as medical treatment and scholarships) or through initiatives creating opportunity and empowerment (such as literacy and job training programs).
The Center used data from two household studies, the Center on Philanthropy Panel Study and the Bank of America Study of High Net Worth Philanthropy, to estimate dollars given to “help meet
basic needs.” In addition, estimates were created about expenditures by other types of charitable organizations (education, religion, health, combined funds, international development, and “other charities”), where at least some expenditures are reported by other researchers to be focused on the needs of people with low income. Those expenditures are funded in part by charitable donations, including household contributions.
The portion of expenditures that is likely to be focused on the needs of people of low income for some types of charities was estimated based on reported values from other researchers’ work: Higher Education -- Council for Aid to Education (for scholarships) and the National Association of Independent Schools (also for scholarships). Religion: National Council of Churches of Christ (expenditures called benevolences).
To estimate support for programs primarily serving people in low income groups by combined funds and in health care, the Center used samples of organizations in these two types of recipients. Data from IRS Forms 990 were used to study the sampled groups. For combined funds, the IRS Forms 990 were used to identify and code the allocations made. In health care, the 990s were used to track the charitable contributions received and organizations receiving those funds were grouped based on their purpose (health care clinic, hospital, etc.)