THE BLOG
11/17/2008 05:12 am ET Updated Nov 17, 2011

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