Today, June 10, the Giving USA Foundation released Giving USA 2009, its annual yearbook on giving for the year 2008. Although the book will not be released until August, Alexander Haas has advance access to this information. As an annual tradition our Firm shared these findings and our analysis of them on the day the data is released by the Foundation.
All last year, our Firm reported that things in the world of philanthropy were not a bleak as the media would have you believe. Certainly there are organizations that raised less money in 2008 and have been financially challenged. But, there are also organizations that surpassed their expectations in 2008. Research indicates that is the case every year – recession or not – that some organizations will raise more money than the previous year and some organizations will raise less money than the previous year.
Now, the data is in and we know the facts. Giving USA 2009 measures U.S. philanthropic activity for 2008. First, the good news: total giving in the U.S. in 2008 was down only 2% from 2007, showing that just over $307 billion dollars was given to charities in 2008. Now, a 2% decline is a lot of money – over $7 billion in fact – but compare that 2% decline to the 37% drop in the Standard & Poor’s 500 Index and it hardly registers. Just ask your local car dealer or banker how they would feel if their industry measured just a 2% decline in 2008. We would imagine that they would feel relieved and almost revived, given the most recent economic climate.
The bad news is that this is only the second time that giving has gone down in more than 40 years. However, giving has never gone down two years in a row, and we are hopeful that history will hold true and that 2009 will show a return to growth. Already the stock market is returning some wealth to our accounts and leading economic indicators are improving. And, history tells us that donations recover faster from a recession that the stock market does. Because philanthropy is a very emotional process, all of these factors that make us “feel” better about the economy also make us feel better about making donations.
Bottom line: Americans did not abandon the nonprofit sector in these hard times. Even as other industries were being hit hard, people continued to support the organizations that help the needy, preserve our history, educate and inform us, cure our illnesses, add cultural richness to our lives and look out for the less fortunate. That is a little silver lining to the grey cloud of this recession.