With nonprofits planning for lean financial times, development directors might do well to look to historical trends for some comforting news. But rather than focus on the cyclical nature of the economy and a hoped-for uptick in the stock markets, they might find more comfort in a surprising period: the Great Depression.
A recently updated 1992 study by The Sharpe Group, a Memphis, Tenn.-based organization that offers philanthropic planning support to the nation’s nonprofit community, found that during periods of severe economic decline, nonprofits “can expect relatively little impact on philanthropy for the first few years and may even see a slight increase at the beginning of a downturn.”
Researchers found that – while declines in asset-based giving by the wealthiest Americans may eventually match the percentage losses of investment markets – regular gifts by individual donors through annual appeals are likely to remain relatively stable, as they are tied more closely to income than to asset values. In addition, bequests to nonprofits – as a percentage of all giving – may actually rise during recessionary times.
The findings are based on analyses of data included in the Yearbooks of Philanthropy published by John Price Jones beginning in 1940, and the report Philanthropic Giving published by The Russell Sage Foundation in 1950.
The December 2008 update of Philanthropy in Uncertain Times: A Retrospective, 1931-1949, is available online at http://www.sharpenet.com/uncertaintimes.
Contact: The Sharpe Group, (901) 680-5300.l