According to a study by the Center on Philanthropy at Indiana University, the terrorist attacks that destroyed the twin towers of the World Trade Center and damaged the Pentagon are unlike anything that has ever happened in U.S. history and may have unpredictable effects on Americans' charitable giving.
The study, which was conducted by the Center at the request of the Indianapolis-based American Association of Fundraising Counsel, examined the effects of major events of terrorism (the bombing of the the Murrah Federal Building in Oklahoma City), war or war-like acts (Pearl Harbor, the Korean War, the Cuban Missile Crisis), and political and economic crises (the assassination of President Kennedy, the resignation of President Nixon, the Arab Oil Embargo) to determine their impact on the U.S. economy and philanthropic giving. The study found that the stock market dropped immediately following most of the major crises evaluated but recovered within a year in most cases, and that the total amount of charitable giving has increased every year for the past forty years, with the exception of 1987.
"We know that giving is closely correlated with the economy, and there do seem to be some fairly consistent trends in giving and the economy in the years surrounding these major national events," said Patrick M. Rooney, director of research and COO for the Center on Philanthropy.
He cautioned, however, that a number of factors unique to the September 11 attacks — including the fact that the economy was on the brink of recession prior to the attacks — may decrease the level of giving. At the same time, the outpouring of significant one-time gifts to disaster relief efforts may cancel out any recessionary effects on the overall level of giving.
"Our findings from this evaluation and other studies show that both the stock market and [charitable] giving are resilient," said Eugene R. Tempel, executive director of the Center on Philanthropy. "While this is a unique situation, in the past Americans have shown a remarkable capacity to recover from adversity, both economically and spiritually, as measured by the stock market and giving."