The End Of Generosity: Large Charities Suffer Severe Damage As Donations Fall

Total gifts to major charities fell sharply last year, which should not come as a major surprise. The Chronicle of Philanthropy details the trend in its annual Philanthropy 400 survey released today.

“Donations to the nation’s biggest charities dropped 11 percent last year, a decline that was the worst in the two decades,” the Chronicle of Philanthropy reported.  The 400 institutions in the survey raised $68.6-billion in 2009. The drop they suffered in contributions was nearly four times as great as the next biggest annual decrease of 2.8% in 2001.

Giving to United Way Worldwide (No. 1) decreased by 4.5% and to the Salvation Army (No. 2) by 8.4%. Food for the Poor (No. 6) had contributions fall by more than 27%. Donations to the Fidelity Charitable Gift Fund (No. 7) declined by 40.3%. Also reporting declines were the American Cancer Society (No. 8), where giving fell by 11%, and the Y (No. 10), which reported a 17.2% drop in donations. Only four charities in the top 10 reported increased contributions last year. They were Catholic Charities USA (No. 3) with a 66% jump in donations; the AmeriCares Foundation (No. 4), which had an 18.1% rise in giving; Feed the Children (No. 5) where contributions rose by 1.2%; and World Vision (No. 9), which reported a 4.5% increase in giving mostly by donors who make monthly gifts to “sponsor” needy children overseas.

The data is already nearly a year old, so it does not have much utility except for voyeurs who want to know how individual charities fared. It is hardly a surprised that a deep recession would curtail giving. But, will the trend continue, and if it does, what becomes of America’s largest charitable organizations and the millions like them which provide service across the country? The answer is probably “yes.”  Giving probably did not improve much this year, the publication says.

The economy picked up this year, but perhaps not enough for many Americans, including the rich, to risk using their money for more than providing for their own needs . Those trends have not only hurt consumer spending–they have hurt any part of the economy that requires Americans to spend beyond what they cautiously view as their means.

The same parsimony has affected many companies which have no interest in increasing expenditures in a harsh economy. Many of these firms, in fact, are still cutting costs. A great deal of the money that goes to charities comes from companies.

US charities may have to adjust their plans even as the American social safety net has begun to fray. Services in many cities and towns have been hurt by drops in property taxes. Unemployment insurance benefits, which end at 99 weeks in most case, are not enough to cover over 2 million people who are among the long-term unemployed. Social Security payments were frozen this year, the second in a row. There are serious conversations among serious people that Social Security, Medicare, and Medicaid payments will need to be cut toward the end of the decade.

The recession has killed many things and some of them may take years to return. Charity may be among those things, and charitable organizations are often most needed when an economy falls apart.

Douglas A. McIntyre