Effect of Economic Slowdowns on Giving Less Than Expected, Report Finds

While recessions and economic slowdowns have affected charitable giving in the past, their impact has not been as deeply felt as conventional wisdom might suggest, a new report from the Giving USA Foundation finds.

Part of Giving USA's Spotlight series, the report, Giving During Recessions and Economic Slowdowns, examined times of economic distress in the nation's economy going back to 1969 and found that, in current dollar terms, total giving in the United States has risen every year but one. The exception was 1987, when a tax law change the previous year prompted some people to "give early" in order to maximize the value of the tax deduction they could claim.

According to the report, which was written by the Center on Philanthropy at Indiana University, economic changes such as slowing growth or a decline in gross domestic product can occur even in non-recessionary times. During such periods, however, giving typically continues to grow, albeit more slowly than usual.

"When the economy is uncertain, as it is in 2008, nonprofits and others naturally assume the one sector that will be heavily impacted is philanthropy," said George C. Ruotolo, Jr., chair of the Giving Institute and past chair of the Giving USA Foundation. "With history as our guide, we know that's not true. In fact, while charitable giving is impacted by recessions and/or economic slowdowns, it's not by nearly as much as one might expect."

"What Happens to Giving During Recessions and Economic Slowdowns?" Giving USA Foundation Press Release 09/19/2008.