Economic Indicators Showing Positive or Negative Predictions of Future Philanthropy?
Sometimes economic indicators can help forecast, with hopefully better results than your local weatherman, the short-term future of philanthropy. A few recent numbers released by governmental agencies and industry associations struck me.
Consumer confidence: Many economists try to gauge the way in which consumers feel about larger purchases, as an indicator of their willingness to spend money, particularly on disposable income. In the last couple of months, consumer confidence has dropped. There are also corresponding numbers that indicate that people's savings rates have increased. This might be an indicator of people’s diminishing interest in making philanthropic gifts in order to hold on to resources for an unknown future.
Stocks: Over the last year, stock prices have risen dramatically across the board. While many have suffered economically during the pandemic, those with investment opportunities have seen a dramatic increase in their net wealth. The question is, does this increased series of assets that people have realized lead to greater philanthropic opportunity? This is where there’s a change in the way in which we look at the entire philanthropy landscape. In today’s world, the top five percent of the people (socio-economically) give 95 percent of the dollars. If you can get to the right people, this actually is a positive in terms of opportunity for nonprofits.
Unemployment: While most people look at the unemployment number as a percentage, which has stood stubbornly consistent at around six percent for a number of months, the more staggering figure is the number of individuals who have stopped looking for a job altogether. While the percentage of unemployment gives us an indication of those not having a job, when you add in those that have stopped looking, this leads to a much larger segment of our population who are not currently employed. This also supports the idea of the changing nature of five percent of our donors giving 95 percent of the dollars. There are fewer people making more and more of the difference in total philanthropic dollars.
These are just three statistics to look at. In the end, the heightened need for nonprofits and gift officers to build very strong relationships with those that can make the biggest difference is at a high point.