November 11, 2008 | Read Time: 1 minute
Fund raisers should keep a close eye on joblessness statistics. Those numbers will determine just how challenging fund raising in the bad economy will be, according to a new report.
After publishing a white paper on how charitable giving fared in the Great Depression, Robert F. Sharpe, a Memphis fund-raising consultant, and his colleagues have analyzed additional historical data from that era in recent weeks.
From 1929 to 1933, charitable giving declined by 22 percent, after adjusting for both inflation and deflation, Mr. Sharpe writes. And from 1931 to 1933, as the Depression deepened, that percentage was 28 percent.
But based on IRS tax-return statistics, Mr. Sharpe notes, giving as a percentage of income by most Americans held steady at 1.8 percent throughout the Depression and in some cases even went up slightly.
“On the whole, Americans during the Depression apparently gave as much or more of what they had,” Mr. Sharpe writes. But “as unemployment rose and income levels dropped, Americans simply had less to give. It may be that during today’s period of economic crisis, unemployment in general — and white collar unemployment in particular — are the most important factors to watch.”
In an interview, Mr. Sharpe added: “If unemployment reaches 10 percent and Americans’ income falls by 5 to 10 percent, charitable giving will drop just as surely as night follows day.”
