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December 2010: Are We Giving In A Charitable Giving Crisis?

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8/7/2019 December 2010: Are We Giving In A Charitable Giving Crisis?

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8/7/2019 December 2010: Are We Giving In A Charitable Giving Crisis?

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When presenng the audit results to various nonprot clients, I usually get asked what the trends are in

the nonprot world for the next year or so, and invariably the topic of conversaon turns to the ebb and

ows of charitable giving and how the economic recession has aected this giving. The next queson on

nonprot board’s minds is – Are we in a charitable giving crisis?

My response generally is no – we aren’t in a crisis, although businesses and individuals hit hardest by

the economy’s slide have shied charitable giving paerns to long-term pledges and gi commitments,

rather than ceasing to give altogether.

Benchmarking studies performed by numerous philanthropic associaons reveal that the most eecve

fundraisers use a variety of well-rounded programs and acvies to raise money, shaering the myth that

big cket galas, golf tournaments, and telethons are the only way to aract donors. The most successful

philanthropic programs have a sustained emphasis on building relaonships and culvang major gi do-nors. Long term planned giving, such as charitable remainder trusts and bequests giving become more

popular as opposed to one me cash gis.

An interesng but not well known fact is that charitable giving actually increased during the Great De-

pression in the United States. The data indicates that from 1931-1933 there was a signicant drop in

giving, followed by a slow but steady increase from 1934-1941 (thereaer followed by a sharp increase

from 1941-1948). Overall, giving trended erracally upward during the Depression due to in large part to

planned giving as individual’s deferred income rose at a faster rate than current giving declined. Be-

ARE WE IN A CHARITABLE GIVING CRISIS ? 

Jeff Holt, CPA - Partner, Assurance & Advisory Practice

DECEMBER 2010 

8/7/2019 December 2010: Are We Giving In A Charitable Giving Crisis?

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quests became a much larger percentage of giving during the Depression and accounted for much of the

growth. According to IRS and other gures, the percentage of giving from estates was much higher than

before or aer the Depression.

Observers at the me concluded that charitable giving and the demand for it were, in the vocabulary of 

economists, relavely inelasc. People consider their core giving to religion and other deeply held inter-

ests to be more like their ulies than a movie cket and will cut other things before they reduce their

giving. People do, however, tend to focus their giving in areas where the hearts and minds most tend todwell and are less responsive to gimmicks, arm-twisng and other more aggressive types of fundraising

that do not speak to their core beliefs and values.

So while charitable giving may be down in terms of outright cash gis, the successful nonprots have

had to shi their focus to tailor their markeng/fundraising eorts to tap into ways people want to

give in periods of economic decline. I recently heard of a nonprot homeless shelter who successfully

decided to charge its volunteers a nominal fee for the privilege of being able to serve food to the home-

less on Thanksgiving and Christmas Day. While this may to some be extreme, it goes to show that if 

people’s hearts and minds are “into” the cause that they will sacrice their disposable income, even in

harder mes, for such organizaons.

So are we in a crisis? The answer again is no – not if the nonprot recognizes and adjusts its fundraising

eorts to the shi in giving methods while sll recognizing that there is sll a depth of relaonship and

commitment to these organizaons among their donors.

Stephen P. Carter - Silicon Valley

[email protected]

Lewis Sharpstone - Los Angeles

[email protected]

Je Holt - Los Angeles

[email protected]

Rob Schlener - Orange County

[email protected]