The economy hasn’t been good for awhile, but philanthropy in the United States increased in 2010 for the first time since 2007, according to a report by Giving USA, which monitors charitable giving.

Overall giving in the U.S. rose 3.8 percent in 2010.

Robert Evans, a national consultant to nonprofits, said the “hot category is donor-advised funds,” which allow people to create accounts with money, securities and/or works of art.

Two of the three biggest national funds reported double-digit growth. Fidelity Charitable was up 31 percent. Vanguard Charitable was up 19 percent.

Locally, The Dayton Foundation, which manages charitable donations for families and individuals on a local and regional level, did even better with a 68 percent increase.

Last week the news was all about a tumbling stock market, which wiped out months of gains in a single day. Ironically, it was the stock market last year that fueled the increase in giving, said Evans, managing director of the EHL Consulting Group and a review board member of Giving USA.

“Moderately wealthy and wealthy individuals found themselves with appreciated securities, which is something that hadn’t happened for a while,” he said. “Clients who transfer shares and other assets to charitable gift funds avoid capital gains taxes and earn tax deductions for gifts to charities.”

Does that mean the two-week stock market slide will put a halt to charitable giving? Not necessarily, if Evans is proven right.

“It’s not all about investment growth and avoiding taxes,” he said. “People also want to be generous. Two-thirds of households in America give to charity. That figure holds steady.”

The experience of The Dayton Foundation may prove the point.

During the year ending June 30, 2010, it brought in more money — $64.2 million — than all but a dozen of the country’s 737 other grant-making community foundations. That was more than those based in Dallas, San Francisco, Houston, Nashville, San Diego, Denver, Cincinnati and Cleveland, which were also among the year’s top 25 in total giving.

In Ohio, only the Columbus Foundation took in more new money, although Dayton is just the fourth largest Ohio foundation.

The 90-year-old foundation’s exceptional growth has coincided with a tough local economy, increased rivalry for local charitable dollars among nonprofit organizations and the rise of national charitable gift funds, including Fidelity, Vanguard, Schwab and others, that were established in the mid-1980s.

The Dayton Foundation, with $371 million in total assets, can’t match the scale and returns of those industry leaders, but it can and does make a giant-sized imprint on the local community.

Earlier this year, The Dayton Foundation passed the $500 million mark for total grants issued in the Miami Valley — grants fueled with proceeds from its clients’ investments and holdings.

The foundation has more than doubled the number of funds it manages for clients since 2000 — from 1,451 to 3,039 at the end of 2010.

Nationally, community foundations reduced grants for the second year in a row in 2010, according to a report by the New York-based Foundation Center, which said they were more affected by the economic downturn than corporate foundations were.

Shrinking leadership

In the Dayton region, universities, hospitals and foundations have all had to take on a more significant role in the community as NCR and others have moved out of Dayton and shrunk the “traditional pool of leadership,” said Dayton Foundation President Michael M. Parks.

“It’s what the community needs now,” Parks said.

The foundation served as the incubator for the Dayton Job Center; the Minority Business Partnership, which attracted 15 funders; and the Neighborhood Schools project, which attracted 16 funders and is in year five.

The Schuster Center, which opened in 2003, might not have done so without The Dayton Foundation, advocates say. The foundation’s board guaranteed the bonds that allowed construction to proceed before all of the money had been raised. The center’s endowment fund also is held at the foundation.

Brother Raymond Fitz, former University of Dayton president and a co-chairman of the Commission on Minority Inclusion, said the foundation “has been the entity that can call together what’s left of the corporate community, the not-for-profits, higher education and others to initiate some really significant things.”

The vast majority of grants the foundation makes are donor focused — determined by the fund holders, not the foundation.

The historic $26 million bequest from Virginia Bernthal Toulmin in 2010 is a notable exception. She left it up to the foundation to decide how money from that fund will be used. The Dayton Food Bank and a host of arts organizations have since benefited from the late Dayton philanthropist’s generosity.

Only $1 million of the more than $36.6 million awarded by the foundation in 1,100 grants to area non-profit organizations in 2010 came from undesignated funds.

“But most people know us by that $1 million, which is where most of our charitable intent is carried out,” Parks said. “More undesignated funds would allow us to do more.”

Parks said requests for grants were up 30 percent this spring, compared to 2010. “Many nonprofits are in a much more difficult financial situation than previously, and this is a recent phenomenon,” he said.

John Moore Sr., who joined the board in 1972, said The Dayton Foundation has thrived by “providing new products and opportunities for donors, as well as cultivating investment managers, attorneys and estate planners. On the community leadership front, it has identified priorities, including downtown Dayton, education and diversity; provided seed money; and assigned community volunteers to explore solutions.”

Judy McCormick, a past governing board chair, said, “We’re the one place now that can make everyone look at the big picture, not just their own agendas. Philanthropy is not just wealthy people who put their names on buildings in big letters. It’s all of us.”