Oil Spill Will Damage Fund-Raising Efforts, Forecasters Predict

The BP oil spill will depress charitable contributions by $200-million to $300-million this year, and by as much as $600-million in 2011, largely because of its devastating effects on the Gulf Coast economy, according to a new index.

The new index, which is called Philanthrodex, tracks and predicts charitable giving from all sources nationwide. It provides monthly, quarterly, and annual snapshots—and forecasts for the year ahead based on a statistical model.

The index has projected that giving increased by 9.2 percent from January to May before the spill, compared with the same months in 2009.

It’s difficult to gauge how accurate the new index is: It is a product offered by Philanthromax, a one-year-old fund-raising consulting company in Dallas. The company is charging a $195 annual fee, plus $44 per month, to the first 1,000 customers who sign up for access to the new index.

Hank Zachary, Philanthromax’s president, said that the index was created by a group of 25 mathematicians, analysts, and statisticians who evaluated more than 50 economic and other variables to come up with a way to measure—and predict—charitable givng.

He said that his company created the new index because Giving USA, the annual tally of philanthropic contributions comes out annually, six months after the year has ended, and fund raisers could benefit from more up to date information and forecasts.

Researchers at Boston College’s Center on Wealth and Philanthropy have also come up with a formula to provide more up-to-date estimates and projections on giving by individual donors. And The Chronicle of Philanthropy Index also offers a way for fund raisers to gauge the economic climate for gifts.