Sparse Charitable Giving Expected this Year

Nearly seven in 10 Americans (68%) say they will give more sparingly to charity in the coming months, according to a study conducted by Campbell Rinker on behalf of Dunham+Company. 

Another one in 10 plans to stop giving altogether until the economy gets back on track.

Even though donors are likely to decrease the amount they give, charities can anticipate that individuals loyal to their cause will continue to give, as nearly 8 in 10 donors (78%) say they intend to keep financially supporting the charities they have in the past. This is especially true of donors ages 40 to 59, a key demographic for philanthropy, as well as those younger than 40.

“The findings of our study are not surprising, but they are a real concern because charities have just started recovering from the worst decline in giving in U.S. history,” said Rick Dunham, President and CEO of Dunham+Company.

“According to Giving USA 2011, U.S. charitable giving dropped $30 billion annually from 2007 to 2009. Giving recovered slightly in 2010 and has continued to make a comeback in 2011,” said Dunham. “But now it looks like charities are in for some more rough waters with the economy in such disarray.”

Charities will find gaining new donors to be especially challenging as only two in 10 respondents (22%) said they would consider providing gifts to organizations they have never before supported. The study shows that the more people feel as if the economy is in decline, the more they are unwilling to support another charity. Older donors are extremely skittish about the economy and less willing to take on a new cause. Nearly nine in 10 people older than 60 are less willing to support a new cause (86%) compared to just 64% of donors younger than 40.

The study also found that donors who give online are more likely to continue to do so than those who don't give online. Six percent say they will stop giving compared to 15% of those who don't give online. And they are more likely to cut other expenses before cutting charitable donations (14% versus 9%) and say that giving will be one of the last things to eliminate (12% versus 8%).

Nearly nine in 10 online donors (85%) say they will continue to assist the causes they have supported in the past, compared to only 71% of those who don't give online. And those who donate online are nearly twice as likely to begin supporting another charity, compared to donors who do not give online (28% versus 15%).

"Our research has shown that online donors are more highly educated and have higher household incomes than donors who do not give online," said Dunham. "Charities will do well to focus attention on these donors to maintain their support and to find ways to acquire other donors via the web."

The study shows that the top three factors impacting the donor's willingness to give are directly related to the economic climate across the U.S. They are, in order: (1) reduced income due to job loss; (2) the rising cost of personal or living expenses; and (3) uncertainty over the economy. This should be a concern for charities because nearly half (43%) of those surveyed believe the economy will continue to decline, with 31% saying they believe it will stay the same and only 17% feeling the economy will improve.

The study paints a brighter picture for houses of worship, as 95% of those who regularly attend religious services plan to continue giving, with one-third of that group indicating they are more willing to give in the coming months. In fact, those in this group are four times more likely to cut back on other expenses to continue donating compared to those who don't attend religious services, and twice as likely to say that giving will be among the last of their expenses to be cut.

The study was part of a Campbell Rinker Donor Confidence Survey of 497 adults nationwide who had donated at least $20 to charity in the previous 12 months. All responses were gathered online from August 12-15, 2011.