The Coming Charity Crisis: Part II
by William High

Turbulence—that’s what the captain has announced we are going to face on the airplane I’m currently riding.  Fortunately, our turbulence is short lived.

 

Unfortunately, I don’t think we are in for a short lived run in charitable circles. In the fundraising world, we are in for a bit of a ride.   As of the day of this writing, the stock market dropped 700+ points.  Another big financial giant, Wachovia, just got swallowed by another financial giant, Citibank, for a mere 2.2 billion.  But all signs point to the fact that the shakeout is not over.

 

As the financial world has struggled, it’s ripple effect is ongoing.  Some of those financial institutions were big givers.  Many did not have charitable foundations, and thus gave out of income.  They won’t have the kind of income they had in the past, and thus their giving will drop.  Or worse, they got acquired, and the new institution may not share the same charitable interests.  Of course, as these institutions have struggled, the stock market has struggled to put it lightly.

 

At the end of 2007, the stock market was up, and dramatically.  Because of the robust 2007 stock market, we saw lots of gifts of publicly traded stock.  Not so in 2008—the market has taken a huge hit and with it, we’ll see a relatively dramatic decrease in gifts of publicly traded stock.

 

All of these issues point to a very nervous consumer, and giving, public.  Banks are hoarding cash.  People are no different.  They are sitting on their cash, or making cutbacks in their budget given the declining market, the gas prices they’ve paid over the course of the year, and the rising grocery bills.

 

In short, giving is down.  We might well expect it to stay down in the coming months, and into next year.

 

For charities, the time to act is now.  Look at the budget.  Determine what expenses can be cut or held back.  By the way, one of those expenses is not your development budget; you need that more than ever.   For Christian ministries that have traditionally relied on monthly support, now is the time to make those calls to your regular donors and ask them to stick with you.  Write the letters.  Make the contacts.

 

A bit of advice as well:  seek diversification.  More and more charities are looking at creating enterprise to fund their activities.  Likewise, look at funding your non profit organization through non cash gifts.  Donations of vehicles, boats, RVs, timeshares, collectibles, business inventory still remains a largely untapped area.  It is also a multi billion dollar opportunity.  Look for organizations that can handle these gifts for you so you don’t have to add staff.  The name of the game here is volume.

 

Start now.  Remember the proverb:  the ant gathers its harvest for the coming winter.

 

--William High is the President of the Servant Christian Community Foundation (www.servantchristian.com).  He can be reached at whigh@servantchristian.com. 

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