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Charities Expect Tough Holiday Season

The fragile economy won't rebound quickly enough to rescue some of the nation's largest charities from a bleak holiday giving season.

The nation's 400 largest charities expect giving to decline by a median of 9% this year, according to a survey by The Chronicle of Philanthropy, a trade publication. That means half the nation's largest fundraisers expect donations to drop even more than 9%.

Last year, charitable giving fell 2% to $308 billion, the first decline since 1987, according to Giving USA, an annual report published by the Center on Philanthropy at Indiana University. The Center hasn't projected numbers for 2009, "but we do know that giving is affected by recessions and recovery from recessions," says Timothy Seiler, director at the Center's Public Service and Fundraising School. The slower the economic rebound, he adds, "the slower the rebound will be for charitable giving."

Corporate giving in 2009 is expected to drop 3% to 5%, according to a survey of 76 companies by LBG Research.

While people have continued to give to charity during the recession, they're giving smaller amounts. That's significant, because donations from individuals account for about 75% of all charitable giving.

Grants from the Schwab Charitable Fund, which allows participants to make recurring donations from an investment account, were up 20% in October, but the average grant size was down 25%, says Kim Wright-Violich, president of the fund. In June, the Fidelity Charitable Gift Fund permanently lowered the minimum size of grants from its fund to $50 from $100.

For the Salvation Army, Friday's news that consumer spending fell 0.5% in September was particularly worrisome, says spokesman Maj. George Hood, national community relations director. If consumers stay away from shopping centers during the holiday season, donations to the Salvation Army's red kettles will fall, he says.

"Our Christmas program is really driven by foot traffic during the Christmas season."

Charities are coping by increasing solicitations (especially to prior contributors), cutting costs and using social media and the Internet to raise funds.

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