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October 23, 2009

When Will Giving Recover?

If the past is any judge, Americans will not give as much as they did in 2007 until three years after the recession ends, according to a report released by the Giving USA Foundation.

Foundation grant making could take longer to rebound than giving by individuals, researchers at the Center on Philanthropy at Indiana University write in the latest issue of Giving USA Spotlight.

For clues, they examined the effects on giving of the Great Depression and of recessions in the 1970s and 1980s.

Itemized charitable deductions, when adjusted for inflation, did not recover to pre-1929 levels until 1937, then fell again in 1938 but rebounded the next year. Giving took three or four years to recover after the recession in the 1970s.

But the researchers say there are some signs that giving may rebound more quickly after this recession.

For example, there are more foundations today and very wealthy people tend to endow foundations when they die. Income is higher than it was during the previous downturns, more people have completed college, and there is a better understanding today of how tax policy can influence giving.

Copies of the report can be purchased for $45 by calling 1-847-375-4709.

— Caroline Preston

Friday October 23, 2009 | Permalink

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