Summary
Read the entire briefing.
Changes in giving are linked to changes in the overall economy. During good economic times, giving
tends to grow robustly. However, when the economy grows at a moderate or slow rate, philanthropy
continues, although at a slower rate of growth. In general, during economic downturns, giving tends to
decline, after adjusting for inflation.
Based on several indicators, the National Bureau of Economic Research announced on November 28,
2008 that the U.S. economy has been in recession since December 2007. During the third quarter of
2008, economic output contracted at an annual rate of 0.3 percent (Bureau of Economic Analysis,
2008). Certain segments of the economy, particularly those associated with giving such as stock market
values and corporate profits, have declined to levels last seen in 2002 (Standard & Poor’s 500 Index) or
2005 (corporate profits).
Giving USA Foundation’s Spotlight newsletter for Fall 2008, written and researched by the Center on
Philanthropy at Indiana University, analyzed trends over the last 40 years. It shows that giving fell,
adjusted for inflation, an average of 1 percent in recession years. In years with 8 months or more of
recession, giving declined at an average rate of 2.7 percent per year (adjusted for inflation). In the
longest recession in the last half of the 20th century (1973‐1975), giving fell 9.2 percent (adjusted for
inflation) and by 5.4 percent in 1974 alone.
Most households continue to give during times of financial insecurity, although some give less compared
to periods of economic prosperity and some donors become non‐donors, especially those earning less
than $50,000 per year. The Center on Philanthropy Panel Study, for example, found that the average
amount contributed by donor households in 2002 (a time of slow economic recovery after the recession
of 2001) declined by 6.3 percent, after adjusting for inflation, compared with the average gift amount in
2000. Total giving from all households does not drop as fast as average giving per donor household,
because there are more households, and a higher percentage of households gave in 2002 than did in
2000. Overall, Giving USA estimates that total household giving in 2001 (a recession year) fell by 1.3
percent adjusted for inflation. In 2002, the year that economic recovery began very slowly, household
giving rose 0.3 percent adjusted for inflation.
By asking charitable organizations about their experiences, the Center on Philanthropy’s Philanthropic
Giving Index (PGI) gauges nonprofit fundraisers’ confidence in the current climate for fundraising.
Between June and December 2008, the PGI fell from 88.8 to 64.8 points. This is a decline of 27 percent
and is the largest single drop since the PGI began in 1998. The prior worst‐ever drop was in 2001, when
the PGI fell by 9 percent. In that year, total giving dropped 2 percent (adjusted for inflation).
Nearly 94 percent of nonprofit fundraisers surveyed said the economy is currently having a negative
(65.3 percent) or very negative (28.5 percent) effect on fundraising.
Some foundations have reported that they intend to maintain their giving in 2008. The Foundation
Center and the Council on Foundations are both offering information resources for and about
grantmakers responding to the economic crisis.
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