Tuesday, December 7, 2010

Let's be Charitable

Chariable GivingHistorically, charitable giving in the US was largely recession-resistant.  Always generous, Americans gave to the less well-off during thick and thin. Even during world wars and the Great Depression charities were often the only safety net that caught and cradled the vulnerable among us.  But the Great Recession seems to have altered that pattern a bit.  Perhaps the American people—or the American psyche—is changing.

While the reduction in funding between 2009 and 2008 was only a meager 3%, this 3% was still a hardship for many not-for-profits who have seen demand for services escalate beyond their ability to service that demand.

For instance, shelters for abused women and children are operating at 100% capacity, and still they turn away one person for each person they can help.  Previously, maybe these women and children sought shelter from family and friends.

Animal ShelterSimilarly, many animal shelters are euthanizing puppies immediately upon admission.  Dogs—mutts and pedigreed dogs alike—are  showing up at shelters looking like refugees from an Auschwitz animal farm, because their previous pet parents could not afford to feed them.  Perhaps the astronomical increase in puppy mills in recent years has contributed to this life-and-death disaster.  Perhaps the economy has meant that people could not spay and neuter, thus ensuring more generations of unwanted pets. 

Maryland recently made the news because it was raising tuition at state-run but publicly-funded universities and colleges.  Other schools are de-funding entire academic departments or closing whole campuses.  Despite the resulting angry protests, the schools simply could not continue to operate at the level they have been.  

Arts organizations…medical organizations…human rights and welfare organizations.  The story is the same everywhere.   There is just not enough money available to perform the valuable services needed.

Charitable Giving in the United StatesCharitable Giving

As has been true for years, 75% of all charitable giving comes from individuals.  The largest declines were in individual bequests (lower stock values?) now representing 8% of charitable gifts and foundations (reduced endowment asset values?) now at 13% of giving. 

Corporations lag dismally at 4%.  Business owners—still reeling from 2 years of economic upheaval—may be responding only very cautiously to appeals. Perhaps as the economy reheats and more discretionary funds are available, this trend will reverse.

Giving to religious causes accounts for 33% of giving.  Education comes in at number two at 13%, with international organizations gathering 6.2% of the donated dollars, health organizations getting 3.8% and human services 2.3%.

501(c)3 Organizations

Click on the picture to enlarge the data.

At the same time that donations were stagnating or falling, the number of 501(c)3 organizations in the US grew by more than 50% in the last 9 years, from 819,008 in 2000 to 1,238,201 in 2009.

So the squeeze is on.  More organizations; more need; fewer funds. 

It’s a recipe for pain, but it is not time to muffle the drums and start the keening.

Experts predict that organization relying on smaller, individually-given direct-response donations via direct mail, e-mail, cell phone texting, social media, DRTV and the like, will probably see improved results in the next several years.  These same experts predict that major donors, corporate gifts and bequests will increase as the economy improves as well.

Now if we can only hang on long enough…

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