IU Lilly Family School of Philanthropy
by Rafia Khader, Program Manager

Giving to religion declined in 2018 by 1.5% (a decrease of 3.9% adjusted for inflation) with a total of $124.52 billion in contributions. While by far still the largest sector, religion dipped to 29 percent of total charitable giving in the United States (a two percentage point drop in the overall share of giving over the past year). Yet, even as giving to religion declined in total dollars this year for the first time since the great recession, giving to religion as a share of total giving has been experiencing a downward trend for several decades. (It should be noted that Giving USA relies on a narrow definition of religious giving: including only congregations, denominations, missionary societies, and religious media).

The most positive change we have seen in 2018 is that the increase in online giving to religion has more than doubled compared to the increase in the rest of the charitable sector overall. Moreover, online donations to religion were larger than online donations across the other sectors. While we know from anecdotal experience, many houses of worship have lagged behind in facilitating online giving, it is heartening to know that they have made significant efforts in 2018 to make online giving easier. And congregants have certainly responded to this change!

While the total amount of giving to religion went down, the decrease is not uniformly distributed. While many denominations are just releasing their 2018 data, a variety of Protestant denominational bodies are reporting modest increases in overall contributions (e.g. The Presbyterian Church in America (PCA), The Presbyterian Church USA (PCUSA), The Southern Baptist Convention (SBC), the United Methodist Church, the Evangelical Lutheran Church of America, and the Episcopal Church USA). Of the largest denominations reporting, only the American Baptist Convention saw a decline in giving. Yet while reporting increases in overall giving, many are also reporting decreases in baptisms or worship attendance, making the case that while numbers of participants and total amount received often are connected, they do not always go hand in hand.¹

When looking at the overall picture of American religion and charitable giving, one significant theme is a major decline in giving to Roman Catholic parishes. Roman Catholics, who make up the largest denomination in the U.S., have decreased their giving to the church in light of the clergy sexual abuse crisis in Pennsylvania that became public in 2018. In an online poll conducted by America Magazine, a leading Catholic publication, close to half of the respondents said they had lowered their giving to their parishes in direct response to the sexual abuse crisis.

Crisis, though of a different and external nature, has also been a theme for Jewish and Muslim houses of worship in 2018. The response, in terms of giving, however has been different. A week after 11 people were murdered in October 2018 at the Tree of Life Synagogue in Pittsburgh, PA, donations to 30 or so Jewish faith-related organizations went up by over 1,000 percent. As was reported in last year’s report, several U.S. mosques have been the target of arson. In response, The Victoria Islamic Center in Texas, as one example, received over $1.1 million dollars in donations from over 20,000 individuals globally in efforts to rebuild the mosque in 2018.²

So far, the overall picture remains mixed. While it remains too early to tell the exact impact of tax reform (the U.S. Tax Cut and Jobs Act (TCJA) on giving to religion, it does appear that it is having a negative effect on giving across sectors. In brief, the TCJA doubled the standard deduction thus reducing the number of individuals and households that are eligible to itemize their charitable gifts. According to a survey conducted by the Cornerstone Fund, 17 percent of individuals no longer able to itemize their giving reported that their giving would decline as a result of the Tax Cut and Jobs Act.³ The full effect of the TCJA won’t be seen until we are able to analyze this year’s itemizers over this next year, but it appears that fewer itemizers disproportionally affects middle-class over more wealthy givers. Traditionally, giving to religion (particularly congregations) has relied on a large base of givers over fewer major gifts. Therefore, giving to religion may experience the effect of the tax reform bill more than some other sectors.

Overall, though total giving to religion went down, as the full Giving USA report indicates, many subsectors within the charitable sector also saw a decrease in giving. While much focus has been on the number of Americans indicating they are unaffiliated with a religious institution, as the 2018 Giving to Religion report indicates, this does not capture the full picture of giving to religion. Follow this link to view the free executive report.

Stay tuned for much deeper analysis of congregations’ economic practices of receiving, managing, and spending resources when Lake Institute releases the NSCEP report in September.

¹Reporting data includes the latest available. Some denominations from 2018 and others from 2017. See https://www.christianitytoday.com/news/2019/may/southern-baptists-acp-membership-baptism-decline-2018.html

²Rafia Khader and Andy Williams. 2019. “Giving to Religion.” Giving USA 2019: The Annual Report on Philanthropy for the Year 2018. Chicago, IL: Giving USA Foundation.

³Rafia Khader and Andy Williams. 2019. “Giving to Religion.” Giving USA 2019: The Annual Report on Philanthropy for the Year 2018. Chicago, IL: Giving USA Foundation.