On Average, You Donate 15x More Money to Non-Profits Than Your Favorite Brand
According to Giving USA’s Annual Report on Philanthropy 2017, American individuals donated $281.86 billion in 2016, while corporations contributed only $18.55 billion. Similarly, we donors gave 3.9% more than we did in 2015, while US companies showed a smaller overall increase (3.5%).
Are you surprised?
Well, I kinda was, yes.
Sure, the current economic climate in the United States can sometimes make it hard to be surprised by anything corporate-related these days, but still, a $263.31 billion difference? Sheesh.
Our position is not to point fingers, place blame, or even make a single definitive conclusion here as to how or why the current environment was created and/or how or what we should begin doing to fix it. Nope. We simply exist to help people and in order to improve how we’re currently doing that, we’re simply analyzing the current available data in order to establish a measurable place from which to move forward. If you don’t like what you read, then join the club. Don’t get on Facebook and call us dumb — it’s just not nice.
Here are the numbers
American corporations currently represent the single largest national economy in the history of the world, amounting to an estimated Gross Domestic Product (GDP) of $18.46 trillion in 2016 ($18,4600,000,000,000).
The Fortune 500, the largest 500 companies in the US, currently represent two-thirds of this US GDP, amounting to $12 trillion in revenues, $890 billion in profits, and $19 trillion in market value alone, while employing 28.2 million people worldwide. According to Trading Economics, corporate profits for all American businesses currently total $1.567 trillion ($1,567,000,000,000), as of January 2017.
These figures indicate that, of the millions of US businesses registered with the IRS, the top 500 are responsible for nearly 60% of total profits. This is specifically relevant because (a) it shows us where the majority of corporate profits are made and (b) how much of these profits are not being used to support great non-profits.
So the data is quite telling, right?
Effectively, of the $1.56 trillion in US corporate profits, only 1.9% is donated to US non-profits (math: $18.56B donated/$1.56T profits). This measurement is commonly referred to as a Giving Ratio.
Comparatively, according to Philanthropy.com, the giving ratio for the State of Texas for individuals with an income between $50,000 — $75,000 (the US median income level) is 4.21% or more than twice that of US corporations.
According to the IRS, the average giving ratio for Americans ranges from about 2.6% at the very lowest to 12.3% on the high end. This indicates that even the stingiest of American donors give roughly 40% more of their salaries than the richest companies in the the world give of their profits.
Why is this important?
Because while you’ve been reading this (i.e. 5 minutes), more than 100 children have died from preventable causes and UNICEF estimates that another 29,000 children will die today because of conditions that we know we can treat, but simply do not because of a lack of funding.
And this lack of funding isn’t coming from you and me, remember? US donors gave $390,050,000,000 last year. That’s more than the total GDP of every country in the entire world, minus the top 30. Sure, individual donors can and will continue to improve, but generally, American donors are doing their part. Unfortunately, American businesses are not and people are suffering because of it.
Certainly, some businesses (many from Austin, in fact) are doing more than their fair share, but clearly, corporations as a whole are giving $263,310,000,000 less than the very people they employ.
Fortunately for all of though, the path to significant progress is right at our finger tips. For example, if US businesses increased their giving ratio just 3%, they would generate nearly $60 billion more annually for non-profits compared to their current levels.
Just a 3% increase = $60 billion more annually
That means less people suffering from preventable causes. How do we do that? We don’t know exactly just yet, but we’re quickly learning and we’re simply never going to stop until things get better.