Tuesday, November 25, 2008


This morning's Wall Street Journal page one story on the decline in charitable gifts caught everyone's attention and generally depressed the holiday mood. Charitable gifts - especially from sinking corporations - are way down. But this is not exactly news. Most charities in New York, where the stock market exerts an inordinate and irrational influence over behavior, have felt the pinch some more than others as is always the case. Human service organizations have suffered more than any other category. Most of us have been living this downturn-turned-recession-now-depression for a year or more. But seeing the cold type is jarring, no question.

By the way it is interesting to note that the New York Times has stopped reporting the dollars raised at the charity events ("gala" may not be the word these days) they cover in the one-page photo spread in each Sunday Styles section.

So let's review:

  • Bonuses are being paid on Wall Street this year. Yes. They may be less and they may not show at the very top. But there is a large pool of upper management people who will see year-end rewards. Are they your donors? Why not?
  • Those of us who have been through this before are well aware that gifts go down in hard times. But giving always bounces back and usually faster than the rest of the economy. This would not be the time to give up no matter how discouraged you may be feeling.
  • Money is being made. Those who are making it may not be your usual donors. The job is to find out who they are and then to ask them. Bankruptcy lawyers for example or the shakeout experts who are feeding on the corporate meltdowns.
  • As a whole charities are not very well managed. There is unnecessary duplication. Of course this doesn't apply to you but to the other guy. Nevertheless there will be a shakeout. But here again nonprofits tend to be a lot more resilient than other economic sectors. Many of them run lean because they must. Lack of resources - usually a bad thing - may not be so terrible in a situation like this.
  • If our government can come up with a trillion dollars of our (your) money in just six weeks we are obviously a very rich nation. Lots of people are hurting and they deserve our help through the organizations we serve. But far more of us are feeling it just around the edges; their losses are on paper and unrealized. I myself am down 30-40% for the year - on paper. Just as you are. But I have not stopped giving. Either have you. And either will your donors - if you ask them!
Happy Holidays.

Saturday, November 15, 2008

National Philanthropy Day

"Economists say the downturn may
develop into the worst recession since 1981-82.

-- New York Times November 13th,page one.

Today is National Philanthropy Day. A "celebration" marked the occasion here in New York which generates an estimated 25-30% of the country's annual giving "handle." How 2008 will turn out philanthropically won't be known for a few months. But many believe a sharp drop is possible if not likely.

We are hearing that the rich "feel" poor. The Sunday Times styles page that photographs the wealthy and the wannabes at charity events around town have for the most part stopped reporting the amounts of money raised at them.

Unlike many who work as consultants or development officers today I was around for that recession plus two or three before it, and of course for the bubble that burst in 1990. I have little recollection of the 1981-82 recession. So I went back and took a look. Adjusting for inflation in 1982 Giving USA reported about $127 billion contributed to US charities; there was good growth through 1987 ($150 billion). Then came the dot.com collapse and in 1992 - following two flat years at around $150 billion- there was a leap to $165 billion. And there has been strong growth since - up to $306 billion plus in 2007.

What I like about history is the arc of perspective it provides. Long term philanthropic trends - from 1967 forward have always been growth oriented with a few flat years now and then, and modest growth other years. But steady growth. It also seems to me that the swings are less for nonprofits than for the economy overall. That may be because charities over-all are more risk averse than the economy in general. Perhaps because of that and because they are mission and service driven most charities attract people who are less motivated by greed and self interest.

Whatever the environment and whatever 2008 brings by way of total giving in the US charities have no choice but to press on. Shoulder top the wheel, nose to the grindstone, the usual. The bad news is this is rough. The good news is that the story history tells is a hopeful one.

So happy philanthropy day! Hoist one for me.