Posted on 10th February 2010
New data and new opinions on the recessionary impact on philanthropy have recently emerged in the UK and the USA, and on both sides of the Atlantic the blame for drops in giving was not attributed solely to the weak economy. The latest Recession Watch Panel, organized by Third Sector magazine, warned that fundraisers’ ongoing low confidence and tendency towards a pessimistic outlook was part of the problem.
Tim Waldron, chair of YMCA England, warned against paying too much attention to surveys that measure donor attitudes rather than actual giving behaviour, “We need to be wary about using these sorts of polls and avoid talking ourselves into a giving recession”. Paul Amadi, chair of the Institute of Fundraising agreed that negativity was rampant, whilst highlighting the successful efforts of fundraisers during the recession, “There was a lot of doom-mongering eighteen months ago about what this was going to do to giving, but giving has broadly held up. One reason for this is that we, as fundraisers, kept asking and kept highlighting the need”.
Despite these appeals to look on the bright side, at the same event where these remarks were made, not one UK fundraiser raised a hand in response to a question from Nick Hurd, shadow minister for the Third Sector, when he asked if anyone in attendance believed their task would get easier in the next year.
Gloomy thinking may impede successful fundraising, but the Wall Street Journal’s Financial Adviser blog also lays the blame at the door of the rich. According to the blog, the wealthy deserve “a slap on the wrist for not being generous enough through the recession”. In support of this criticism, the blogger notes that only 17 of those listed as Forbes Magazine’s wealthiest 400 Americans made the newly published Philanthropy 50, The Chronicle of Philanthropy’s list of the biggest donations made in 2009. The Chronicle found that the top 50 US donors gave a total of $4.1bn (£2.6bn) to charity in 2009, down from $15.5bn (£9.9bn) in 2008 and the lowest total since the publication began compiling the list in 2000. The median gift was down to $41.4m (£26.4m), compared with $69.3m (£44.3m) in 2008 and $74.7m (£47.6m)in 2007. Furthermore, the amount a donor needed to give to make it on to the list and be counted as one of America’s most generous people in 2009 was only $16.2m (£10.3m), compared with $30.5 m (19.5m) in 2008 and $39m (£24.9m) in 2007.
However, the Chronicle claims that the recession has prompted smarter and more creative giving, citing Bruce Boyd, managing director of Arabella Philanthropic Investment Advisors, “There’s no question that the downturn has been a catalyst for encouraging people to think differently… This is driving a period of experimentation by nonprofits and by donors that will serve us well over the next number of years.”
Further positive consequences of the economic turmoil were said to include the fact that some donors now have more spare time to devote to philanthropy, appreciate the urgency of realising pledges and see the recession as the ideal time to step up their giving.
According to the Chronicle of Philanthropy, former Citigroup chairman Sandy Weill and his wife Joan, had pledged to give $300m (£191.9m) to Cornell University upon their deaths. But university officials, faced with a greatly reduced endowment, got a positive response when they asked the Weills to pay up sooner rather than later. The couple agreed to make good on over half that pledge immediately, saying, “We’d lost a lot of money in the catastrophe we went through in the markets, but like a lot of people, we had money left. We wanted to concentrate on what we had left and hopefully set an example.”
The view that the recession is the right time to increase giving, rather than pull back, was also endorsed by Louise Nippert who pledged $85m (£54.3m) to save three arts organizations suffering from the recessionary impact on ticket sales and corporate support. According to Carter Randolph, executive vice president of Mrs. Nippert’s Greenacres Foundation, “She saw it as a unique time to make an impact.”
Finally, and back in Europe, another millionaire has also decided that this is the right time to make a significant philanthropic statement. According to the Daily Telegraph, Austrian businessman Karl Rabeder is selling his entire $4.5m (£2.8m) worth of assets, including his properties, planes, cars and antiques to raise money for his microfinance charities in Latin America. Rabeder reportedly plans to live in a small wooden hut in the mountains and is cited as saying, “My idea is to have nothing left. Absolutely nothing. Money is counterproductive – it prevents happiness”.
The suggestion that philanthropic spending brings greater happiness than buying consumer goods or stashing it in the bank, is surely music to the ears of fundraisers and charities, whether they are pessimistic, optimistic or simply waiting to see what happens to giving as we emerge slowly and cautiously out of the recession.
