What is the difference between Giving USA, the Blackbaud Index, and the Atlas of Giving?
Posted on December 29, 2012
A question often asked by those who are new to the Atlas of Giving is, “How is Atlas different from Giving USA or the Blackbaud Index?” First, the short answer:
While all three products use their own respective methodologies to measure and report past giving, the Atlas of Giving is primarily focused on quantifying what will happen in the future – how much will be given, to what causes, and by whom. Neither Giving USA nor the Blackbaud Index produces a forecast of future giving.
In order to explain the differences in greater detail, it is necessary to provide some context regarding the measurement of charitable giving.
There will never be a current, centralized database that reflects all charitable contributions made to the 1,199,607 publicly supported nonprofits and churches in the United States. As a result, measuring giving during any defined period will never be a matter of simply “adding up all the gifts.”
The same is true of retail sales, manufacturing inventories, unemployment figures, and countless other financial and economic measurements. As with charitable giving, any attempt at measuring or quantifying these activities actually involves producing a “best estimate.”
The accuracy of such an estimate is a function of the methodology used to produce it. The Atlas of Giving, Giving USA, and the Blackbaud Index each use their own distinct methodologies to estimate giving activity.
Giving USA is the venerable grande dame of estimating U.S. giving using econometric modeling. It relies heavily on IRS data on individuals who claimed a charitable deduction two years prior to the one being measured along with preliminary IRS estimates for one year ago. It ignores the fact that a very small (and decreasing) percentage of individual donors itemize and claim a charitable deduction every year.
Giving USA has recently made modifications to its methodology as a result of political pressure. In 2011, it announced that it had changed its methodology and revised its estimates for 2008 and 2009. This change was driven by a small but vocal group of charities and nonprofit associations who asserted that, based on their own anecdotal analyses, the original Giving USA estimates were too high and couldn’t possibly be correct. The Chronicle of Philanthropy joined these shrill organizations in questioning Giving USA’s reports and put significant pressure on Giving USA leadership. Bowing to the pressure, Giving USA changed its decades old methodology and revised its estimates.
The Blackbaud Index is based upon a limited sampling of approximately 1,275 organizations (almost all of whom are Blackbaud clients) whose contributions total less than 1% of a total charitable giving economy of more than $346 billion. Colleges & universities, churches, very large nationwide charities, donor advised funds and small nonprofits are significantly under-represented in the Blackbaud index. This is especially important since the church sector and the education sectors are the two largest sectors of the US charitable giving economy.
The Atlas of Giving utilizes the approach used by the best known and most relied upon macroeconomic measurements by developing formulas (algorithms) to establish benchmarks which are then used to measure changes, identify trends, and create highly reliable forecasts. The Atlas of Giving is the first and only application of this widely proven methodology to the measurement and forecasting of charitable giving by sector, source and state.
The algorithms employed by the Atlas of Giving were built upon the fact that charitable giving is directly tied to specific individual economic and demographic factors. A team of 25 PhD level mathematicians, analysts and statisticians evaluated more than 70 possible variables and their interactions with charitable giving outcomes over four decades. Their work proved a direct and highly reliable relationship between charitable giving and a select group of economic and demographic factors. The research team used the identified factors to create an algorithm which, when compared with published annual giving data dating back to 1968, correlates at 99.5% accuracy.
The input variables used in the Atlas of Giving algorithms are publicly reported economic and demographic measurements that are updated, reported and forecasted each month. So the Atlas is able to use its advanced formulas to measure total US giving as it occurs each month and provide an updated monthly, quarterly and yearly forecast.
Unlike either Giving USA or the Blackbaud Index, the Atlas also monitors current events (political changes, disasters, tax policy changes, important economic factors like unemployment, the stock market, consumer confidence, etc.) as they unfold and provides analysis of their impact on current and future giving. Hence, the Atlas of Giving provides real nonprofit management utility – including fundraising and budgeting suggestions for practitioners and boards based on the current velocity and trajectory of charitable giving.
The Atlas has built the capability to measure, analyze and forecast total US charitable giving economy by every sector (religion, health, arts, etc.), by every source (individual, foundation, corporation, and bequest), and by every state each month.
The Atlas of Giving is the only resource that provides an ongoing forecast of giving. The forecast is reliable. For 12 months, the Atlas forecast is 90-91% accurate; for 6 months 94-95%; for 3 months 98-99% and for 1 month 99-100%. The forecast is updated monthly to account for changing events, economic conditions and policy changes.
In summary, the Atlas of Giving stands alone as the ultimate economic intelligence tool for charitable giving in the US. It is the only resource for comprehensive, contemporary measurement of charitable giving by every sector, every source, and every state. It is the only reliable forecast available for charitable giving. The Atlas is also the sole source of analysis of how current events, economic factors, and demographic factors are affecting and will affect US philanthropy.