Will this holiday season be a cheerful one for charities?
The last two months of the year rate as prime time for giving, but in 2008 Americans are reeling from a perfect storm of economic news. Even so, there are signs that many will stay with their generous ways.
A first-time national survey of online consumers released Monday finds that 51 percent (89 million people) plan to donate to nonprofit groups via the Internet during November or December. Sixty-seven percent of those will donate the same amount or more than last year. Thirty-three percent say they'll be giving less.
That will add about $3 billion to the coffers of charities at a time of rising need, according to Convio, the Austin-based Web-services firm that commissioned the survey. Online giving is a small but mushrooming portion of total charitable giving.
At the same time, some major charities are buoyed by support from loyal donors. The American Red Cross (ARC), for example, is five weeks into a national campaign seeking $100 million for its disaster relief fund and has already raised $50 million.
"This is encouraging, considering the state of things," says ARC spokesman Jonathan Aiken, and it raises hopes for the holidays. ARC chapters rely on year-end giving as the "bread-and-butter season."
Americans give, even in recessions
The good news is that, historically, charitable giving overall has not declined much during hard economic times. That's the finding from Giving USA Foundation, which in September released a report that looks at the trends over the past 40 years, including several periods of recession.
"While charitable giving is impacted by recessions and/or economic slowdowns, it's not by ... as much as one might expect," said George Ruotolo Jr., chair of the Giving Institute, on releasing the study.
During recessions since 1967, total giving has dropped by an average rate of 1 percent, and individual giving declined by 1.5 percent, adjusted for inflation. (Giving by individuals accounts for about 80 percent of total giving.) In current dollars, giving actually increased by an average of 6.2 percent during recessions.
In years with eight months or more of recession, the average decline in individual giving was 2.4 percent.
The online survey found that 46 percent of people whose own situation had deteriorated over the past year still planned to donate this season.
Organizations that serve the needy tend to see contributions jump during the most difficult times, research shows. The online consumers said they plan to donate most during the holidays to human service groups like food banks and homeless shelters, faith-based organizations, and health-related services.
Last year, as the economy deteriorated, The Salvation Army's income from its holiday kettles (a small portion of overall donations) was a record $118 million. When it polled local Salvation Army groups last summer on overall donations, giving was mostly "on par," neither up nor down, says Melissa Temme, national communications director. With the economic volatility this fall, "we don't really know what to expect in the holiday season."
Gloom on the corporate front
This is a situation that just hasn't been seen before, several fundraisers say. Moreover, the prospect for corporate giving is gloomy on several fronts.
Though the sky may not be falling in the charitable world, some nonprofits may not survive or may have to merge with others. The number of charitable groups has exploded in recent years, reaching 1.8 million (apart from religious organizations).
The big charities, however, are counting on loyal donors to stick with them.
"We've been here 125 years, serving through the Great Depression, two world wars, and many recessions," says Ms. Temme. "This is an unusual time, but we're a faith-based organization and feel called by God to carry out our mission, so there's an element of faith there."