'Tis the season ... for giving
Charities are bracing for lean times. Generous Americans can prove their fears groundless.
Americans are cheerful givers. They donate more money per person than anywhere else in the world. Most households keep on giving even during rough stretches – though some give less and some stop altogether. In these tough times, charities are counting on that giving spirit.
Many of them won't know exactly how they fared in this recession year until they tally up receipts in January, including the generosity inspired by the holidays. Typically, total charitable giving – from foundations, corporations, and households – declines by an annual average of only 1 percent in recession years, according to the Giving USA Foundation.
But charities are bracing for the atypical.
More people are in need just when state and local governments are cutting budgets. Assets of foundations are down by about a third, forcing the Bill and Melinda Gates Foundation (the wealthiest philanthropy in the US) to announce it will cut grantmaking next year, and the William and Flora Hewlett Foundation to put a figure on its reduction – as much as 7 percent for 2009.
Foundations and corporations, however hefty their names and checks, account for a relatively small piece of the charity pie. Three-quarters of charitable giving comes from individuals.
Yet assets of better-off individuals have also shrunk dramatically. Many major donors link their giving to their portfolio performance, and charities are seeing a slowdown. As Gordon Campbell, president of United Way of New York, recently put it: "It's a whole new day." He says wealthy donors are asking themselves, should they give $250,000 instead of $500,000?