A recent BusinessWeek article tells the tale of nonprofits in distress – charitable contributions shrinking, food bank inventories dwindling, and a nation of donors whose own economic prospects are looking too grim to allow them to support social service organizations. The idea for this article was suggested by ASI’s Sarah Hoddinott, and it speaks to what seems to be a growing concern in the nonprofit sector: What does the recession mean for us?
But did BusinessWeek get their story straight? I recall a conversation with Philip King on this topic that raises some doubts. Philip suggests that while the fear of a recession-spurred nonprofit crisis is a reasonable one, history doesn’t bear it out in reality. During the leanest economic times, the recorded rates of charitable giving have not suffered in the way one might expect. Philip says that there are two possible reasons for this:
- Charitable giving is essentially different than consumer spending. Donors are not as motivated to give due to their own prosperity as they are due to empathy, agency, and a sense of community. Along with a harsh economic climate often comes an acute community awareness of local and distant suffering, and with that, an increased motivation to give.
- At this moment, online and social philanthropy is still growing at a rate fast enough to outpace any slow-down in traditional giving… and this may well continue to be the case throughout the current recession.
Did BusinessWeek get it wrong? Is Philip out of his mind? Do you think the recession will hurt certain parts of the nonprofit arena more than others? And is charitable giving really another animal altogether, or just “one more type of spending”?
