If frugality is the new normal, it also hits charitable giving.
A new Barna research study from earlier in the year shows that donations to charity are another victim of economic turmoil.
From the report:
|
While many church donors have been able to maintain their typical level of donations, those who have cut back have dropped their giving substantially. Nearly one-quarter of church donors had cut contributions by 20% or more. That compares with just one-tenth who had done so in the first few months of the crisis. In other words, the segment of donors who have dramatically decreased their contributions to churches has more than doubled in the last 14 months.
Further, these donors expect a slow economic recovery:
Perhaps most concerning for charitable organizations, Americans are settling in for what they perceive to be a long recovery. Three-quarters of adults (75%) believe the economy will take two or more years to recover, and nearly half (42%) contend the economy will take more than three years to come back.
David Kinnaman, president of the Barna Group, concludes:
“The implication is that church and non-profit leaders should prepare for another lean year. Response to this reality suggests avoiding high-risk and untested fundraising efforts and communicating effectively with constituents. In addition, consider proactive financial management, including adjusting income expectations. Avoid using traditional financial projections as reluctant donors are likely to cut back on the number of organizations and frequency of their support. One of the fundamentals is relentlessly addressing six donor motivations – as identified in previous work by the Barna team – including: operating efficiently, featuring the compelling cause at the core of your work, communicating the urgency of the need, nurturing personal relationships with donors, demonstrating transformational impact, and helping contributors feel a sense of personal benefit from giving. These appear to be as important as ever as donors scale back their giving.”
My personal view is that charitable giving will recover as people regain control of their home budgets and restore cash flow. If that control depends mostly on someone in the household finding a new job, then expect a slow recovery because the job market will likely be bad into 2011. If that control can be reached through cutting expenses and paying down high-cost debt, then a slightly faster recovery may be in the works.
Tags: Add new tag, barna group, charitable donation, charitable giving, Charitable organization, charity, economic crisis, financial crisis, fundraising, Non-profit organization, Philanthropy
