The End of Philanthropy as We Know It?

I'm going to start this post with two notes and build to a big finish....

• Smartlink has new giving guides for donors concerned about communities and the mortgage crisis.
• The John D. and Catherine T. MacArthur Foundation announced $68 million for mitigation and prevention of foreclosures in Chicago.

Those two notices made me think bigger. So I went looking for the trends. For data on foundation giving in economic downturns, I turn to the Foundation Center, which notes the following:

Since the Foundation Center began collecting data on all grantmaking private and community foundations in 1975, the country has weathered several recessions. During each of these recessionary periods -- 1980, 1981-82, 1990-91, and 2001 -- U.S. foundation giving in inflation-adjusted dollars did not decline and, in fact, increased slightly.

The Foundation Center continues:

Although the economic outlook has worsened over the course of 2008, these and other factors, along with a survey of the country's largest independent, corporate, and community foundations, led us to predict in Foundation Growth and Giving Estimates (released in May) that foundation giving will grow ahead of inflation this year."

Please note the Foundation Center is talking about foundation giving -- which is a small percentage of the $300 billion in U.S charitable giving -- and includes gifts to foundations themselves (charitable dollars put into foundation endowments).

So those new tools for giving, big new gifts, and trend predictions are all good. But I think the growth prediction for foundation giving is pointing in the opposite direction for charitable giving overall.

For reasons noted throughout this year on this blog, from recession trends to political giving to job losses to the my longstanding doubts about predictions for intergenerational wealth transfers to drops in retail spending to the end of entire industries (video) to decline in religious worship to generalized economic anxiety to big hits at hedge funds - I think we'll see a drop in charitable giving in 2008. I'm just wondering how far into 2009 or 2010 this will go...(see this prediction http://twitter.com/p2173/statuses/963153716)

I'm sorry to rain on anyone's parade and it is not that I'm a gloomy gus. I run a business (two of them, actually). I'm doing my 2009-2010 budgeting and forecasting just like Joe the Plumber and Sequoia Capital. I'm sticking my finger in the wind trying to guess where things are going just like the next person. I've managed and grown a company through a downturn and so I don't just think about this stuff so I can write snarky blog posts, I've got payroll to make.

I don't think a short-term drop in giving is all we're facing here. I think we're going to see new banking rules, new credit rules, new housing laws, new charitable giving laws, new philanthropic approaches, new tax structures, new public service demands and possibly programs, the heads and tails of important demographic and generational shifts, and lots of other things that will fundamentally restructure the business of giving as we've come to know it. And I think a drop in giving this year is just the beginning of it.

Come on -- jump in and disagree with me! First of all, I would love to be wrong about the above. Second of all, I'd learn from some real discussion about why charitable giving won't change or drop in the short term and how philanthropy might continue to grow in the longer term.....after all, pretty much anyone who reads this blog should care about whether we're in an evolving business or a mature one, whether giving is growing or declining, whether its philanthropy or online giving or peer-to-peer lending or microfinance or impact investing or social enterprise or social capital markets..share your thoughts...Don't just sit there and shake your head, tell me what you think..

Crossposted from philanthropy2173

Comments

[singermuse]

I'm sorry to say that you're probably right. Not only that, but it has been statistically shown overall, the "biggest givers" are usually the people who can afford it least. A certain Jewish Carpenter noticed this when he observed a widow putting in her two cents; all she had to live on, while the snarky (I like that word!) fundie leaders of that day only showed a pretense of giving from their vast wealth (I supposed they got tax credits then too) or just walked on by. This is so much why in spite of the fears of some people, we really need a profound re-distribution of wealth and resources from this truly still abundant planet so that everyone has enough to live a decent life. It's not that there's not enough to go around, it's that certain folks are greedy and selfish to the severe detriment of all.

[Linda Bergthold - Huffpost Blogger]

Lucy!! So glad to know where you're at and what you're doing.... I too post on Huffington and saw this article today. I have just received an email from the Community Foundation in my community and they are worried too. The wealthier, older families in our community will continue to be generous, but I do wonder about the younger ones. The tendency may be to take care of your "own", whether that be your own family or your own employees, before you reach out to others. Your article makes me realize that those of who can, should! I hope you're wrong about this.

[Lucy Bernholz - Huffpost Blogger]

Linda - great to see you again - will check out your posts. There is a lot of chat on my blog and at Chronicle of Philanthropy etc, about this post. I think the structural changes we're now going through are too diverse, too broad, too dynamic to mean we can have what we had. That doesn't have to mean less giving in the long term, but I think it will mean less in the short term and different in the long run. I hope your community foundation and others (and other nonprofits and foundations) are trying to peek around the corner a bit so they don't find themselves flat footed. Thanks for writing in!
Lucy

[TheStewardshipCoach]

Very interesting post. As I work with non profit religious organizations, mainly churches, I have had my eye on charitable giving. I do think the only way to predict our future is to look at our past. The points you quoted about giving during other recession times was good. I do think we will see giving decline in 2008. It had slowed down in 2007. On my part based on the research that I have done I feel that religious donations will be down around the 10% range. If you care to look at things I have posted about this they are on my blog.

[Lucy Bernholz - Huffpost Blogger]

Thanks for writing in - I will check out your blog. Religious giving is the biggest slice of individual giving so it would likely be a bellweather for the overall trend.