Giving Trends in Connecticut: The Good News and the Bad News

new Haven, CT. photo: f11photo/shutterstock

When covering local philanthropy trends, it’s easy to get caught up in a drumbeat of news about major gifts and emerging funders and conclude that giving is on an upswing. And that's certainly the case in many places, amid an exciting rise in regional philanthropy. 

But it's not the case in all places. In recent years, we've reported on discouraging, long-term funding declines in certain cities, such as  Philadelphia, where giving dropped by 10.3 percent between 2006 and 2012, and Los Angeles, where a study found a major drop-off in giving after the 2008 financial crisis. 

But the news is mainly promising when it comes to local giving, and it often includes interesting wrinkles about changing donor demographics that embrace new giving styles or shifts in how institutional funders are operating. 

A new study of local giving comes from the Connecticut Council for Philanthropy (CCP), which recently announced that giving in that state has reached a $5 billion high point. The most recent comparable data is from 2015, and by studying this data, CCP noted an 11 percent increase in giving between 2014 and 2015. Let's take a closer look.

What’s Causing the Growth in Giving?

With these kinds of reports, this is an important question. In the case of Connecticut, one answer is a rise in bequests. An increasing number of people in Connecticut are giving through their wills after death, and bequests grew from $240 million to $330 million in 2015. Unfortunately, future bequest gifts are often difficult to predict, which could drive Connecticut’s promising numbers up or down in future years without warning.

Connecticut Foundation Giving is Growing a Lot

Locally focused foundations are a much more predictable source of giving, and Connecticut-based foundations gave $1.2 billion to programs and organizations in 2015. This is a 17 percent increase, which is substantial, considering that the national average growth is just 4 percent. What’s even more impressive is that Connecticut foundations have been giving more despite dips in their assets. Foundation giving in the state has held steady despite economic shifts, and about 90 percent of all giving that originated from the state has been coming from a group of about 200 foundations. Connecticut has approximately 1,497 private foundations, 86 operating foundations, 66 corporate foundations, and 20 community foundations.

Individual Giving Growth Is Much More Modest

When you take bequests out of the equation, individual donors are falling short in Connecticut. While the national growth rate for individual giving is 5.7 percent, Connecticut donors came in at just a 2.3 percent increase. This has been largely attributed to residents’ response to the recession. While the very wealthy continue to give in Connecticut, fewer low- and middle-income residents are claiming charitable tax deductions. The percentage of Connecticut residents supporting charitable groups has declined by 10 percent by since 2005. Throughout New England, individual giving has been consistently low when compared to other parts of the U.S., which most likely reflects the fact that this is also the least religious region of the country. 

The Role of Community Foundations

With 20 community foundations in the state, more people have been giving money to these funding entities in recent years. This explains why community foundations have been able to give more money despite seeing dips in their total assets. We’re definitely paying attention to community foundations in Connecticut because these groups have substantially increased their giving over the past five years and are becoming more powerful players on the tri-state giving scene.

Other Connecticut Giving Trends

Corporate funding in Connecticut has remained pretty flat in recent years, with only modest growth despite increases in company assets. However, operating foundations that run their own charity programs have been ramping up giving, and cross-sector collaborations are becoming slightly more popular here. In 2015, out-of-state foundations contributed $419 million in grants to Connecticut nonprofits. It’s a good thing that Connecticut nonprofits have this out-of-state support, because a majority of Connecticut-based foundations have actually been giving to U.S. groups outside of Connecticut.

Individual donor giving in Connecticut is largely centered on basic needs, much more than in other states. Meanwhile, health continues to be the top giving category for Connecticut’s foundations.

The Future of Giving in Connecticut

Despite the good news about growth in 2015, there are some dark clouds on the horizon. Not only has there been a long-term decline in the number of charitable givers in Connecticut, but CCP predicts that even fewer people will give as a result of the new tax law.

On the other hand, as we often report, Connecticut is home to a number of extremely wealthy families who've been ramping up their giving in recent years, like the Dalios and Steve and Alex Cohen, and the state remains one of the wealthiest in the nation. Here, as elsewhere, nonprofits are likely to rely more on smaller numbers of affluent donors as opposed to larger pools of modest donors. 

Members of CCP grant more than $1.01 billion from more than $8.4 billion of combined assets each year. You can read the statewide giving report here.