General Ramblings: Willing But Unable

July 1, 2009       Paul Clolery      

Her smile was bright. As would any good member of a hotel restaurant wait staff, a pleasant young woman chatted up my cousin and me during a recent trip to Cleveland. We were from out of town, but then, so was she.

The 25-year-old lives in Toledo, an hour, 56 minutes and 116 miles away. She explained that work is scarce there and it’s not unusual for people to drive 100 miles to their jobs. She wasn’t complaining, she said.

It could have been worse. Another person we met drives 134 miles from Cleveland to Pittsburgh on weekends for an extra job there. That’s where the work happens to be for now. The Giving USA numbers that show a decline in giving are hard and cold statistics; but they don’t live and breathe. They represent people who do inhale and exhale and write checks or don’t write checks.

According to Giving USA, corporate donations, which is roughly 5 percent of all giving, dropped by 8 percent in inflation-adjusted dollars. Bequest giving also declined, at an inflation-adjusted rate of 6.4 percent. We won’t know for a while if a fewer number of people died during 2008 compared to those who became actuarily mature during 2007 and the impact of life on deaths. But you have to think that some who had made provisions for charity upon death changed that plan when family needed help because of the economy.

The $6.42 billion that evaporated from new philanthropy during 2008 – separate from the deflation in endowments and foundation funds – can be directly tied to businesses not being able to do business, thus not hiring people and keeping jobs in their communities.

Civilizations have always traveled to where the opportunities can be found. During the 1980s, the U.S. population migrated southward and now those jobs are drying up and new opportunities are being sought.

This economy is turning many Americans into nomads. It happens with every recession. But this one has forced such gut-wrenching changes that the U.S. economy is going to look very different when it recovers. And, recovery doesn’t mean when the Dow Jones climbs above 10,000. Recovery means when jobs are being created and people don’t have to spend half of a paycheck to get to a job.

This evolution means that donors, too, will look different and will operate in a more complex manner. They might not be as attached to community organizations, but probably will be connected on an even deeper grassroots level, helping to change the things they actually see and can touch.

Unless there is a huge, unprecedented economic rally, the giving numbers are going to show a decline for 2009, too. The first six months of 2009 have been an economic wasteland for most sectors of the economy. This means charities are going to have to retrench further. More mergers are going to be required for survival. And since it’s charities that are bailing out the federal government and not the other way around, federal money for established programs is going to recede.

Who’s going to bail out charities? Donors will do it, but to what level will be the question to which we will find the answer during 2011. NPT

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