Comments on: Good News or Bad News to Follow?

By: Arthur Bushkin

Arthur Bushkin — Fri, 26 Jun 2009 17:32:49 +0000

There is a simple way to produce billions of dollars of long-term funding for social causes. There is a way to harness the power of Capitalism for the Common Good that avoids government spending, taxes, stimuli, or bailouts. Companies can grant Social Bonuses by donating warrants to charity – something that doesn’t cost them anything to give – and get a deferred tax deduction for the value of the gift. To learn more go to: http://www.Stargazer.org/causes.

By: Bob Ottenhoff

Bob Ottenhoff — Wed, 17 Jun 2009 20:17:17 +0000

I think charitable giving from individuals is what would be called a “lagging indicator.” By that I mean several things need to occur in the economy before individuals will start giving again at pre-recession levels: stock market goes up, unemployment goes down, media reports are upbeat, quarterly earnings are positive, etc. It is part of the “confidence” issue you mentioned. Only after these activities take place will individual giving increase – and probably not right away.

By: Sean Stannard-Stockton

Sean Stannard-Stockton — Tue, 16 Jun 2009 13:56:04 +0000

Nice post Bob. What’s interesting is that 80% of individual giving is down between Thanksgiving and New Years. This means that it isn’t terribly relevant that the financial crisis didn’t really hit until the end of the year. However, I think you are right that GDP (one of the biggest determinate of individual giving) is likely to be much weaker in 2009 than 2008. The other variable is confidence. During the 4th quarter of 2008, many people were scared we were going into a depression. Not a recession, but a full blown depression. *If* the economy improves over 2009 and we exit the year with positive GDP and a positive stock market, than giving may hold up OK this year. But it seems to me that if we end the year still worried about when (if?) the recession will end, 2009 might be even worse than 2008.

One more note, the headline Giving USA numbers are inflation adjusted numbers. It could be that 2009 we post negative CPI (inflation) numbers and that (for instance) giving is down 6%, but inflation is -2% so “inflation adjusted giving” is only down 4%. What if inflation is -2%, giving is -1%, so the “inflation adjusted” amount is positive! That’s going to be a hard one to explain to people.

(note: none of my discussion should be viewed as a prediction of future economic performance. I’m thinking about the path of charitable giving in 2009.)