Perfect Storm for Charitable Organizations?

Lucy Bernholz is a blogger who writes a lot about "new philanthropy," more entrepreneurial, transparent and accessible. A lot of us in my profession are trying to forecast how both foundations and the non-profits we fund are going to be affected by the economic downturn (or crisis if you prefer). After the initial panic, many mainstream writers have been publishing data that shows that if you look at past economic downturns, there ended up being very few problems and little to be concerned about. Bernholz by contrast is forecasting difficult times ahead.

In this column, she talks about the economic situation coupled with the outpouring of political giving that has occurred during this election year. Given this possible "perfect storm" how much will non-profits be able to raise during their annual end-of-year fundraising drives? And how much are many service providing non-profits going to be affected by governmental cut-backs? Here's Bernholz:

Charitable and political giving

via PHILANTHROPY 2173 by Lucy Bernholz on 10/17/08

I published this paragraph as a bit of an afterthought on Thursday's post. Thought I'd pull it out and let it stand on its own -

Here's another thought I've been noodling on for a while. I've given more money to political campaigns this year than I ever have before. Judging by the size of the funds raised through primaries and general elections, I'm not alone. Lots more people have been giving money to candidates (and propositions, initiatives, etc) than ever before. What will be the impact of all this political giving on people's budgets for year-end giving? I don't know the answer to this question and we may not know until well after the election and after Giving Season? My hunch is that, as our wallets have grown thinner in recent months and our anxiety has increased, the "average" person's budget for year-end giving is going to move in the same direction as their budget for holiday shopping - down. Consumer companies and investors are planning on lower spending. Nonprofits are girding for it. Some research says this isn't the case. But that research was done in July 2008, back when folks had jobs, some had 401K plans, investment banks still existed, and banks themselves were independent. Now more than ever we will be making decisions about where and how to allocate our dollars and what lever - charitable, political, investment - will make the change we seek.

Tags: philanthropy, politics