InKnowVision Blog

Giving Up

June 24th, 2008

No, No I don’t mean cashing it in and calling it quits, though at times we all feel like it. I mean giving is up. At least according to Giving USA. 2007 was a record year for kindhearted Americans to support their favorite causes. We crossed over the $300 billion mark for the first time ever and, even after inflation adjustment, this represents about a 1% increase over last year. Of course, that’s somewhat because last year’s number has been readjusted downward.

Most giving (75%) still comes from individuals. Religious organizations (about 33%) get the most. Foreign and disaster relief organizations are among the fastest growing since we Americans seem to respond to tragedy rapidly and with open hearts and wallets. It’s also where celebrities pull our attention most.

What’s not accounted for well is that there are more and more charities to give to. We’re up over 1 million with another 400 thousand churches. And there are billions of dollars being poured into donor advised funds at community foundations and places like Fidelity and Vanguard and very little of those funds being currently distributed to actual operating charities. That means (at least to me) that charities are pinched. Their budgets are tight, they’re in greater competition for dollars and there are not any more real dollars coming their way.

This is a tough problem now and will continue to get tougher. I expect 2008 to be a down year for contributions. The current stock market and economic downturn has everyone holding on a little tighter. Coupled with a drop in will bequests and uncertain estate taxation and I suspect we’ll see some real belt tightening and program cutting sooner rather than later.

We who advise the families of wealth, those who can really make a difference, may want to consider really delving more deeply with our clients and provoking to think about what their world will be like when many of the charitable organizations begin to disappear or cut programs because of lack of funding. Where, you may ask, does their passion for society and its future lie? Where is their heart for “philia”? It could be an interesting discussion. Certainly it’s not one anyone else is having with them.

Entry Filed under: Philanthropy