A recent opinion column in USA Today by Una Osili and Patrick M. Rooney expressed the hope that charitable giving will remain strong despite the current difficult times. Their opinions are based on more than just hope; their careers have focused on serious philanthropic research at Indiana University Lily Family School of Philanthropy at IUPUI and the Giving USA Annual Report on Philanthropy.
Through the years, Osili and Rooney have studied the impact of economic recessions and other crises like 9/11, Hurricane Katrina and other natural disasters and the 2008 financial crisis after the Great Recession.
While it is clear Americans are very generous, and collectively they continue to give to the extent possible even during very difficult times, how will philanthropy fair during today’s multifaceted health, economic and social MEGA CRISIS?
2020 has been a troubling year in many ways. As the global pandemic unfolded, the stock market crashed, billions of dollars of household wealth evaporated and nonessential businesses were shuttered by stay-at-home precautions. This led to a tsunami of unemployment and multiple social justice issues that finally reached a boiling point.
If you followed the recent Sharpe Group blog posts, you will recall many anecdotal stories and examples of hope with neighbors helping neighbors, people helping strangers, churches providing food distribution, wealthy people making very large contributions and people of all incomes raising money to support those in need—inspiring stories of ordinary people making extraordinary gifts of their time, talent or treasure regardless of their age, social standing or financial status.
The USA Today column identified two pivotal questions:
- Will the initial surge in generosity continue?
- Will the economic woes negatively impact giving overall?
I believe the answer is a resounding YES … to both questions.
While recent studies of giving during economic recessions and disasters provide good points of reference, we really need to look back about 100 years for a period of comparable health, economic and social disruption. The period between the end of WWI and the beginning of WWII saw the effects of the Spanish Flu, the stock market crash and the Great Depression and wealth inequality issues.
The loss of jobs and wealth did impact giving. IRS figures indicated a dip for several years in the early 1930s and a slow recovery to the giving levels of the Roaring Twenties. This was similar to what was seen after the Great Recession and the financial crisis of a decade ago, which saw a two-year drop and then a slow recovery which culminated in record levels of giving during the past three years.
So what does this mean for giving in 2020? It will certainly be a challenging year, but I am confident those who can give will and those who cannot make gifts wish they could. Depending on what happens, charitable giving is likely to dip this year and next, then recover and rebuild to record levels.
By Barlow Mann, General Counsel
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