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The Manifest Destiny of American Generosity?

I spent last week in a log cabin on a crystal green lake in the Gatineau hills of Quebec.  It was built over 160 years ago from two foot thick logs cut from virgin stands of white pines which were being cleared at that time to be used as masts in the Royal Navy.  The best part of it? The cell phone didn’t work, the laptop was useless, and I was forcibly disconnected from the unceasing stream of twitter/facebook/blog/BBC data.

Back in the office on Tuesday, the firehose was turned back on and I was drowning in emails and instant messages and skype calls before the scent of pine needles had even faded from my nose.  To be honest, I skipped most of the 698 emails waiting for me, and most of the other messages I missed.  But this twitter post from Stephanie Strom at the New York Times grabbed my eye as I scanned my timeline:

I’m the guy whose job it is to lay awake at night and worry that our 145 people get paid every two weeks.  And since we’re a NYC-based charity and we’re fund raising on Wall St, this does seem like bad news.  The link is to a Bloomberg story that explains the US financial industry is only now embarking on large scale layoffs in the wake of the global recession.  Even when cloaked in the sterile euphemism “structural changes” that is a lot of newly unemployed people being pushed onto the streets of New York, and it only makes sense that this will mean a serious downturn in charitable giving.

So, thanks to Ms. Strom, even after an idyllic week in the pines, my eye was already starting to twitch again.  Some people (like me for example) reach for the desk-whiskey when they are stressed.  Once that is sorted, I then reach for the data.  And this is what I found.

First, charitable giving in the US has been growing steadily and almost unceasingly over the last 40 years. Even during economic downturns, donations merely ceased growing or at worst they dipped slightly.  This seems counter-intuitive to me, as you would expect charitable giving to be the very last priority.  Therefore, if a families income when down 5%, that family may cut their donations by 50% or entirely. But according to numbers provided by CCS Fundraising in New York, this does not seem to be the case.  In fact, the steady growth almost appears relentless.

The Manifest Destiny of American Generosity?

Second, corporate giving adds up to only 4% of all charitable donations. This amazed me, but it’s true.  In 2009, according to the Giving USA Foundation, Americans gave 2.1% of GDP to charities for a total of $304b.  Of that, a mere $14.1b came from corporate America.  So even if Wall Street corporations are facing tight budgets and are laying off staff and presumably cutting back on donations, the total impact of this on the charitable sector will be muted.

Third, most donations come from the wealthiest 3% of the population. “Sixty percent of all US philanthropy comes from high net worth individuals (those with liquid assets of $1m or more).”  I’m guessing that those losing their jobs are more likely to be secretaries than hedge fund managers.

So, the eye isn’t twitching.  The bottle is back in the drawer.  I’m slightly less stressed than I was 20 minutes ago.  It’s unlikely that charitable giving overall is about to plummet into the abyss (although it has decreased by 5% since 2007).  Even if corporate giving dives, it’s merely a small part of the whole.  And rightly or wrongly, the most generous donors are the ones most insulated from the coming lay offs.

All of this is small comfort to the thousands about to lose their jobs in New York.  I’d encourage you, then, to think about those Wall Street secretaries who may be jobless on Thanksgiving.  Here are some good causes that may be able to help them.  But, we’ll be fine.

PS: If you are in the charitable industry, and enjoy good journalism, Stephanie Strom provides a great twitter feed (@ssstrom)

PPS: I’d also argue, on reflection, that a 5% reduction in overall giving may be a good thing in the big picture.  It forces charitable organizations to compete harder for the donor dollar, leading to more efficiency and innovation.  But I’ll save that argument for later in the week.

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  1. J. says:

    My eye hasn’t stopped twitching in almost eleven years…

    Stephanie Strom is one of four tweeps in a private twitter list I keep called “Journalists Who Don’t Piss Me Off.”

  2. Edward Rees says:

    When times are tough people behave very badly sometimes and very well sometimes. I think when people hurt they think of others perhaps. Sort of like the guy who sees someone get wounded on the battlefield. Many run, but many return to pick him/her up despite the risks to themselves. Not directly analagous, but serves to inform on what is essentially a greedy and generous human spirit all wrapped up in one.

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