Two-Thirds Plan to Slash Charitable Giving: Study

Tough economic conditions and thinner wallets affect philanthropic impulse

U.S. charities can look forward to a cold winter as nearly 68% of Americans say they will cut back on their giving in coming months, according to a study conducted in mid-August by Campbell Rinker on behalf of Dunham+Company.

The study pointed to three factors directly related to the economic climate across the U.S. that are influencing donors’ willingness to give:

  1. Reduced income due to job loss;
  2. The rising cost of personal or living expenses;
  3. Uncertainty over the economy.

This is a bad omen for charities because 43% of those surveyed said the economy would continue to decline, 31% said it would stay the same and only 17% expected it to improve.

One in 10 respondents plans to suspend philanthropic activity until the economy improves, the study, released Wednesday, found.

However, charities will still be able to rely on donors loyal to their causes. Seventy-eight percent of respondents said they intended to continue supporting those charities they have contributed to in the past.

“The findings of our study are not surprising, but they are a real concern because charities have just started recovering from the worst decline in giving in U.S. history,” Rick Dunham, president and chief executive of Dunham+Company, said in a statement.

 “According to Giving USA 2011, U.S. charitable giving dropped $30 billion annually from 2007 to 2009,” he said. “Giving recovered slightly in 2010 and has continued to make a comeback in 2011. But now it looks like charities are in for some more rough waters with the economy in such disarray.”

The difficulties charities face are not confined to reduced giving levels. Finding new donors will be especially challenging as only 22% of respondents said they would consider donating to organizations they had not previously supported. Older donors in particular are less willing to favor a new charity. Eighty-six percent of people older than 60—a key demographic—are disinclined to do so, compared with 64% of donors younger than 40.

The study found that donors who give online are more likely to continue to do so than those who do not. Only 6% said they would stop giving, compared with 15% of those who do not give online. Eighty-five percent of online givers will continue to support causes they have previously assisted, compared with 71% of those who do not give online.

 “Our research has shown that online donors are more highly educated and have higher household incomes than donors who do not give online,” Dunham said in the statement. “Charities will do well to focus attention on these donors to maintain their support and to find ways to acquire other donors via the web.”

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