We’re living in a Chicken Little society. Headlines and broadcasts draw us in with the woes of recession. Clearly, the world has some big financial problems, but how big are they really and how will these troubles affect philanthropy? Within the past month Philanthropy UK has published two articles evaluating the status of giving during the economic downturn (See Reading Tea Leaves, Reading Tea Leaves #2). Philanthropy UK reports that while there is a “growing indication of a decline in certain areas of giving there is also a strong thread of consistency in trends for giving.” Evaluating a number of surveys (mostly focused on the UK), they discovered that the situation was not often as dire as it sounded.
For example, surveying 30,000 UK consumers G2 Data Dynamics found that 59% said their giving had not changed. (A headline, however, reported that 20% of people had “axed” their charitable giving.) Another example from The 2009 Skoll World Forum Quick Survey on Delegate Economic Outlook found that only 5.3% of the organizations and private corporations they surveyed felt that the economic downturn had made them “vulnerable” while 63.2% said they were “able to adapt to the downturn.”
The status of giving is an important question, but it is not the only source of income for foundations and organizations. 11% of charities with overseas projects reported that the changing value of currencies had affected their income. Some organizations reported a strain resulting from “increased demand for services.” Investment income, another significant source of funding has also been a source of loss for many organizations.
As Philanthropy UK says, “the data is concerning, but not necessarily devastating, as the headlines imply.” The challenge now, as always, is to evaluate what you read and react to the facts. While there is no doubt that the recession will affect giving, the actual reports are sunnier than many headlines would suggest. As Philanthropy UK assures, “cautious optimism is still a healthy place to occupy.”