This article was recently published in the New York Times, and addresses the impact of the current financial down turn on nonprofit organizations. Be sure to visit the NY Times website to read the comments left about the article, it is all very interesting.
By STEPHANIE STROM
Published: November 10, 2008
SO what’s the fallout for philanthropy?
Given the financial tremors that have obliterated wealth and driven the economy deep into the doldrums, will charitable giving, which reached record levels in the United States over the past decade, show sharp declines? Will foundations, faced with shrunken endowments, scale back their grant-making? Will individual charities, squeezed by reductions in both private and public money, be forced to cut programs?
In short: was philanthropy, like the housing and financial markets, riding a bubble that has finally burst? So far, few fund-raising experts or nonprofit leaders are predicting an implosion in giving, a long fall from the more than $300 billion that was donated last year in the United States. But nonetheless they acknowledge that their world has changed and are preparing for leaner times. It’s more a matter of when, not if.
“I just don’t see how we can have these conversations out of one side of our mouths about people’s cratering 401(k) plans and sinking home values and then say there isn’t going to be some sort of big negative kick to the giving stream, as well,” said Lucy Bernholz, president of Blueprint Research and Design, a nonprofit consulting company in San Francisco.
Some experts, like Robert F. Sharpe Jr., president of the Sharpe Group, a fund-raising firm in Memphis, point to historical data showing that swings in giving are not nearly as severe as broader economic ups and downs, and that during some of the worst times philanthropy remained strong. “Just about any way you look at it, the Depression was one of the best periods for charitable fund-raising,” Mr. Sharpe said.
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